Solana’s Trading Volume Surges As DeFi Looks For ETH Alternatives

Solana’s trading volume surges with the DeFi sector booming again with more needs for a faster and more scalable ETH alternative which is the reason behind the surge. In today’s cryptocurrency news, we take a closer look at the data.

2021 got off to a good start with the crypto bull market seeing assets like BTC and ETH hitting all-time highs on a daily basis. While these price highs are a good thing for investors, they present plenty of challenges regarding fees, centralization, transaction speed, and more to what is known to be a decentralized ecosystem. Since mid-2020, the institutional investors were flooding into the crypto sector which only outlined the question of scalability, high transaction costs, and long confirmation times on the Ethereum blockchain. ETH2 is now rolling out but it could take some time before the users start seeing the benefits of the new features. This leaves the door open for new candidates that can provide more features as the decentralized finance space is gaining traction.

One such project is Solana. Founded by Anatoly Yakovenko and a team of engineers that previously worked at Intel or Dropbox, Solana claims to be a censorship-resistant blockchain that provides the open infrastructure that is needed for global adoption. Some experts think that this project is a direct competitor to Ethereum especially now since FTX CEO Sam Bankman Fried supported it and chose it to host his project called Serum.

Solana’s trading volume surges because of this. According to Bankman-Fried, ETH is incapable of handling the huge growth seen in the decentralized finance sector. However, Solana could change this. Fried said he has tested more than 30 of the top blockchain projects like Ethereum before moving to Solana because of its ability to process 50,000 transactions per second.  When asked about scaling improvements, Fried suggested that it is still insufficient and that the crypto sector needs something that will be a million times faster than Ethereum, not 100. After listing at exchanges, the SOL token traded between $0.50 and $91 which was before any major project developments, as Bankman-Fried tweeted:

 “Serum is built on the @solana blockchain. Solana can process 10,000 times as much as Ethereum; and it’s 1,000,000 times cheaper. And unlike many side chains, Solana is a fully-fledged, decentralized blockchain with over 100 validators.”

After the announcement, SOL saw a huge increase in buying pressure and its trading volume as well as the price increased from $1 million to $41 million, and the price increased to $4.89.