- Solana’s native token SOL reached $82 on December 20th, marking a 13.8% increase and surpassing this level for the first time since May 2022.
- Solana gained attention on December 7th when major centralized exchanges listed the newly launched SPL token Jito (JITO).
- A turning point for Solana, related to the Saga phone, occurred when Coinbase listed the meme coin BONK on December 14th.
Solana’s SOL token surpassed Ripple’s XRP: What factors contributed to Solana’s strength? SOL price gains momentum!
Solana Surpasses Ripple’s XRP
Solana’s native token SOL reached $82 on December 20th, marking a 13.8% increase and surpassing this level for the first time since May 2022. A 33.5% increase in the last two weeks led Solana to surpass Ripple in terms of market capitalization for the first time, becoming the fifth-largest cryptocurrency. Some analysts are questioning whether Solana can sustain its leadership over Ethereum due to the Solana Network offering cheaper and faster transactions.
A post by a trader on social media platform X explains that Solana’s focus on mobile access is what the crypto projects need to attract new users who don’t care whether the chain is decentralized enough or if the underlying asset is a non-sovereign competitor. Essentially, Solana’s user experience is much faster, especially for token and NFT launches that require high processing capacity, benefiting not only from low transaction costs but also from the project’s high transaction speed.
Various factors contribute to this price increase, from increased network activity to the instant success of Solana Network’s SPL token launches. However, a more comprehensive analysis is needed to determine whether the current valuation is justified and whether a rally above $100 is genuinely possible. The current rally in SOL price is partially supported by the craze around airdrops, leading to the successful sale of Solana’s Saga phone and its premium trading on secondary markets.
Solana gained the spotlight on December 7th when it listed the newly launched SPL token Jito (JITO) on major centralized exchanges. Inspired by Ethereum’s Lido, Jito is a liquidity-gaining protocol that, within the first few hours of trading, generated impressive profits with a market capitalization exceeding $300 million. The successful launch increased demand on Coinbase and Binance, leading to increased demand for other airdrops and token launches on the Solana Network.
Another turning point for Solana related to the Saga phone occurred when Coinbase listed the meme coin BONK on December 14th. Each phone received 30 million BONK tokens, surpassing the product’s $599 price tag. Interestingly, despite Solana’s founder mentioning the potential sunset of the phone project just a few weeks earlier, other projects rushed to join the party.
Solana’s rally is supported by increasing DApp activity
Solana’s rise is related to its growth in decentralized applications (DApps) beyond meme coins. Just three weeks ago, on November 29th, Solana’s total value locked (TVL) was modestly at $654 million, representing only a 1.4% market share. This data now indicates $1.28 billion, signaling a 96% increase, according to DefiLlama.
The increase in deposits on Solana’s network came with increased activity in decentralized applications. Solana’s network gains have surpassed those of its main competitors. Similarly, the number of unique active addresses interacting with Solana’s DApps reached an impressive 875,250, while most competitive blockchains experienced a decrease during the same 7-day period.
Solana’s recent activity boom could primarily be attributed to the expectation of upcoming airdrops and token launches, including projects such as bonkwifhat (BIF), Ribbit (RBT), Jupiter (JUP), Meow Coin (MEOW), Phantom, Kamino, Drift, and many others. However, to solidify its position and attract promising projects that can further establish its presence in the DApps industry, Solana is also gaining more users and increasing its TVL.
For example, leading hardware wallet provider Trezor announced on December 20th that it would support Solana and SPL tokens. Also, on the same day, Binance Research released a bullish report on parallel computing, citing Solana as an example of increasing blockchain throughput by “using computational resources more efficiently.”
Essentially, the potential rally of SOL towards $100 seems possible, relying on Solana’s sustainable network activity growth and not just a few airdrops and token launches. Additionally, as competitive chains experience disruptions due to increased activity, Solana has managed to handle demand without any interruptions throughout this process.
