During this new crypto spring, Solana has emerged as a standout performer, with its price surging by a remarkable 185% in just 27 days. This spike has stunned many and are now questioning the reasons. “Why did Solana’s price go up.” Let’s analyze Solana’s key strengths, weaknesses, and its outlook for the future.
SOL Scalability
Solana’s primary strength lies in its highly scalable layer-1 blockchain architecture, powered by a unique consensus mechanism called “Proof of History.” This approach enables Solana to process transactions at lightning speed, with some claims of scalability reaching up to 50,000 transactions per second (TPS), which is enormous. With nearly a million monthly active users and a huge network of validators, Solana has become the world’s most utilized blockchain, processing approximately 37 million daily transactions. It has taken over Ethereum.
SOL Outages
Despite its scalability achievements, Solana has faced challenges in maintaining network stability, experiencing several partial or full outages in 2022. However, efforts to address these issues, including internal bug fixes and the introduction of a new software client called Firedancer, have shown promising results. With only one major outage reported in 2023, Solana appears to be making progress in enhancing its network reliability.
SOL Tokenomics
While Solana’s low transaction fees make it attractive for users, its tokenomics present a significant challenge. With an average fee of $0.0002 and daily earnings far below Ethereum’s, skeptics question the economic viability of the Solana ecosystem. To break even on current inflation rates, Solana would require an astronomical number of daily transactions. Addressing this issue remains crucial for the long-term sustainability of the Solana network.
$SOL Price
Despite concerns about its tokenomics, Solana’s price continues to spike, driven by optimism surrounding its future. Positive developments such as commercial partnerships with VISA and the release of Saga, a smartphone with native crypto custody, have made investor lot more confident. However, the ultimate test for Solana lies in its ability to hyper-scale and fulfill its full potential as a leading blockchain platform.
