The Heat Rally of Solana

Solana (SOL) gained a lot of buzz in 2021, with supporters praising its capacity to tackle the basic problem of the Ethereum (ETH) blockchain. Solana, it was claimed, would be a cheaper and faster venue to process transactions, as well as a better launching pad for decentralized finance, or DeFi, and other smart contract-powered activities. Then came 2022, with all of its agony. Things were looking gloomy for Solana (and, to be honest, most of crypto). It didn't help that Sam Bankman-Fried was closely associated with Solana and its SOL token, which had fallen below $10.

As SBF went on trial in October, SOL returned to the $20s. Then, all of a sudden, Solana and SOL became two of the hottest things going. SOL is presently trading above $100 for the first time since early 2022, and with $47 billion, it is the fifth-largest cryptocurrency - and it was briefly the fourth-largest earlier this week.

Saturday's price movement ended weeks of frenetic trade that had, at least momentarily, catapulted the Solana blockchain to the top of the on-chain activity leaderboard. According to DefiLlama, Solana-based decentralized exchanges are approaching Uniswap's multibillion-dollar trading volumes for the first time. A large portion of that energy is being fueled by wild speculation. Dog-themed meme currencies are currently among the most popular crypto assets traded on Solana. However, airdrops are also causing a flood of merchants to try out Solana-based lenders, bridges, and other infrastructure.

Ethereum continues to be the frontrunner among layer-1 blockchains capable of running smart contracts, aka the foundation of DeFi. According to DefiLlama statistics, Ethereum has $29 billion in total value locked, a measure of money hidden in a certain blockchain's ecosystem, considerably above Solana's $1.5 billion. However, recent events indicate that Solana may suddenly be a genuine challenger.