Despite Solana’s recent Mainnet shutdown, the price of SOL is holding strong and is showing no signs of a bearish future, at least in the short term. The main reason for Solana to have such a bounce-back is its own ecosystem. We saw so many things change in the Solana ecosystem that fueled back the price growth. Out of all the recent announcements, the one that stands out is the launch of the Wormhole network.
A bi-directional bridge between Ethereum and Solana is now live, and users/developers can seamlessly move their assets and projects without worrying about network congestion and gas fees.
In addition, Solana’s cross-chain exchange, Saber, is also going to support the transfer of tokenized assets from Wormhole V1 to V2. The leading cross-chain platform reached $4 billion in TVL, while the market cap is still only $42 million. According to defillama, Saber is the 13th largest protocol in all of DeFi by locked value.
The Wormhole network is a big step towards achieving high-level interoperability. This year, we have seen astronomical growth in the DeFi industry, and it is now clear that one single chain cannot handle all user activity, at least without any trade-offs. As Solana is the most user-friendly blockchain, users are preferring experience over the level of decentralization. And now, with the Wormhole network, the overall load of multiple chains will reduce significantly, as it can leverage Solana’s speed and low gas fee.
The Wormhole network is already being used as a communication channel between Solana and other top DeFi applications such as Terra and Binance Smart Chain. With Ethereum now live, it will go mainstream and draw more attention. Many people believe in these cross-chain bridges because they not only increase speed and lower gas costs, but can also unlock more liquidity. For example, Serum, a non-custodial decentralized exchange backed by FTX, can use the Wormhole network to add more cross-chain liquidity.
Another reason why people are so high on the Wormhole network is that it is leaderless and follows a so-called Validator Action Approval. It doesn’t have to be a blockchain. It doesn’t need to have a staking token. It can simply rely on the network consensus of the chain it is trying to bridge. All of this combined will play a big role in building an inter-chain future. And Solana’s high throughput can be a difference-maker.
The price of SOL has risen 5,504% during the last year, and at the time of writing, it sits at $160. This parabolic run happened because the Solana ecosystem kept expanding its horizons. We see so many SOL-based projects that are offering different functionalities, and more importantly- creating significant demand in the market.
Projects like Matrixeft, Parrot Protocol, and Grape Protocol are few that caught the attention of SOL supporters. Not only that, but NFT interaction is also causing huge demand for Solana. In conclusion, the price of SOL looks undisturbed even after recent setbacks, which shows us how strong the community of Solana is and how many people are believing in the technology long-term.
Born and brought up in India, Karthikeya Gutta is a crypto journalist and freelance contributor for ItsBlockchain. He covers various aspects of the industry with in-depth analysis and research. His passion towards blockchain and crypto ecosystem is mainly because he believes it can really change the world and help millions of people.
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