SOL, one of the tokens most affected by the cryptocurrency crisis of 2022, entered 2023 on the right foot and should end the year on a positive note. Blockchain native token Solana is up 114% over the past 20 days, to $21.34 as of Friday morning, according to aggregator CoinMarketCap.
Earlier this week, the crypto asset touched $24, a price seen only before the crisis with cryptocurrency exchange FTX and its sister company, Alameda Research.
In the past week alone, SOL is up 22%.
The cryptocurrency’s rally started on the heels of public support from Ethereum (ETH) co-founder Vitalik Buterin. Via Twitter, he said he “hopes” the Solana community will get a “fair chance to thrive” after SOL fell to $8.19 late last year.
Buterin’s comment wiped out the damage after investors discovered the token was the second-largest holding in Alameda Research, the trading arm of FTX, whose “creative accounting” drove the exchange into bankruptcy.
However, it should be noted that the asset had already dropped significantly before the token’s proximity to the brokerage was revealed.
Continue after the announcement
According to data from the DefiLlama Analytics Tool, the total amount invested in Solana network projects decreased by 96% in 2022, from $6.68 billion in January to $206 million at the end of December.
The recovery of the SOL price has renewed hopes among crypto analysts, developers, and blockchain executives about the project’s long-term future.
Critics have pointed out that Solana is highly centralized and controlled by venture capital firms. But Riaz Kari, a research analyst at the research house Caico, said, “With the end of Alameda, the protocol is, to some extent, freed from that burden and can become more community-focused.”
Read more:
“I think Solana definitely has a lot of staying power,” Carey told CoinDesk. “Will it be one of the top three or top five networks by TVL (Total Value Banned) in a year? I’m not really sure, but it sure has potential.”
bigger size
Tom Dunleavy, senior research analyst at Messari, wrote in a recent note that Solana’s performance on the series () was strong.
Continue after the announcement
He said that daily active wallets are replicated on the main Solana protocols and remain stable after FTX. In addition, he said, transaction volumes and active accounts are returning to pre-FTX levels.
“It is certainly an open question how thick this new volume will be; however, at the very least, a steady level of volume as FTX exits the ecosystem is a positive sign,”
Michael Reptney, a major contributor to Marinade Finance, a staking protocol that runs Solana, noted that as the price of SOL fell after the FTX crisis, the number of validators also fell from 2,400 to 2,000.
Repetny attributed the recent increase in SOL trading volume to the growing interest in memecoin BONK, based on Solana.
“Bonk serves as an entry point into the Solana ecosystem, just like people come to non-fungible tokens (NFTs) to play games,” he told CoinDesk in an interview, adding that he “with confidence and faith in the Solana community,” will divest itself of Sam Bankman- Fried, former CEO of FTX, and ceases to consider it “Sam Coin”.
Flexibility
Solana has “maintained its place” by staying in the top 20 cryptocurrencies by market capitalization after FTX, while also reaching metrics that developers are looking for, such as “distribution,” said Stephan Rust, CEO of blockchain technology firm Laguna Labs. Marketing, appearance” and “money”.
He expects the price of SOL to rise to $30 and possibly even $50 by the end of the year – another rally, and therefore, could exceed 100%.
Brendon Sedo, a contributor to the Core DAO blockchain, compared Solana’s current scenario to the collapse of Ethereum in 2018. He believes that the project will bounce back in the same fashion despite the increased competition.
“I think this will likely be the result of Solana realizing what Ethereum has achieved after the dark days of the 2018 bear market,” he said.
said Akash Mahendra, portfolio manager of the Yield app platform company.