Solana is mooning, and all coins within SOL ecosystem follow the leader


  • Solana leads altcoins in the SOL ecosystem toward a price rally.
  • Solana's latest spike in investor confidence comes from the network's fast transaction processing and scaling potential.
  • Heightened institutional interest builds up in Solana, contributing to the altcoin's gains.

Traders holding Solana and coins of the SOL ecosystem are rewarded for their patience as the high-speed blockchain network hits a new all-time high.

Bulls push Solana ecosystem coins higher

The Solana blockchain focuses on speed, efficiency and security. It offers faster transaction processing at a relatively lower cost when compared to the Ethereum blockchain. This has attracted users to decentralized applications like NFT marketplace Solanart, built on the SOL network. 

Solana has outperformed top cryptocurrencies Bitcoin and Ethereum several times in 2021; traders earned nearly 1,900% in profits by holding SOL for a year. Since SOL has a robust Layer 1, it eliminates the need for Layer 2 or scaling solutions (like MATIC that facilitates faster transactions for Ethereum).

On August 16, SOL noted the most significant social spike (social media mentions) in its 16-month history based on Santiment data. The euphoria pushed the altcoin to rank ninth among top cryptocurrencies by market capitalization.

Solana Social Dominance

Solana Social Dominance

At the time of writing, coins in the SOL ecosystem, like Chainlink (LINK), The Graph (GRT), Waves (WAVES) and Audius (AUDIO), are rallying. Most Solana-powered coins have noted double-digit gains close to 100% in the past seven days. 

Solana ecosystem coins

Solana ecosystem coins

One of the factors that triggered a rally in the SOL ecosystem is the launch of Solana's "Cross-chain" called Wormhole. 

Wormhole connects Solana and the decentralized finance (DeFi) network and supports inter-blockchain message transfers. Itwent live on August 9, ahead of the price rise. 

The interoperability protocol is facilitating communication between tokens and non-fungible tokens (NFTs), price data and blockchains that previously did not communicate with each other. Wormhole currently supports Terra, Ethereum and the Binance Smart Chain (BSC). 

Traders can move assets and pass on messages without a lag on Wormhole, and it has set the stage for projects that plan to add cross-chain liquidity. This would boost the utility of Solana and the coins of the dApps in the Solana ecosystem. 

Wormhole exposes crypto coins on the SOL blockchain to a liquidity boost and offers non-native assets an opportunity to enter SOL's DeFi ecosystem. 

Solana's current price rally likely marks the beginning of a prolonged one since its competitors like the Ethereum blockchain that support dApps are plagued by high gas fees and network congestion issues when transactions hit a peak on the network. 

Data from FalconX, a crypto focused brokerage and trading platform, shows that trading shops are piling in while hedge funds go short. Interest from crypto-focused institutions suggests a bullish outlook on SOL's price, and keeping in line with the narrative, Solana trading volumes have nearly doubled on FalconX. 

Solana's decentralized finance ecosystem has grown exponentially. The market capitalization of all tokens staked in Solana-based dApps is fast approaching $2 billion. 

The team behind SOL claims that its blockchain is capable of processing more than 50,000 transactions a second. This claim rivals Visa's 65,000 transaction messages a second. Through "Wormhole," the "Ethereum killer" plans to take on competitors like Cardano, Polkadot and traditional finance payment leaders like Visa. 

The cryptocurrency analyst behind the Twitter handle @Pentosh1 suggested that SOL is in price discovery mode, and a drop between $56 to $60 should be considered a buying opportunity or a "steal."

Overall, the price rally of SOL ecosystem coins is set to continue with a further liquidity boost from Wormhole and the increasing interest of retail traders. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

XRP constricts before breaking out to $1

XRP showed strong signs of recovery after the shock of this past Saturday’s flash crash wore off. The past three days of congestion after a strong rally from the lows may begin a new uptrend for XRP.

More Ripple News

Ethereum in a pennant, with bullish breakout as tailwinds reemerge

Ethereum (ETH) price has formed a pennant that quit rapidly after the big sell-off during the weekend. Between $4,646 and $4,060, the price ranges from lower highs and higher lows. 

More Ethereum News

Bitcoin needs support to hold, so that bulls can reclaim $50,000

BTC saw bulls attempting to pair back a significant piece of the occurred losses from last Saturday. But bulls have hit a curb after reclaiming $50,000, as price action fades below and tests the first real support for further downside. 

More Bitcoin News

Cardano price in phenomenal buying zone as ADA targets $3

A brief technical and on-chain analysis on Cardano price. Here, FXStreet's analysts evaluate different patterns and indicators that suggest ADA is primed to advance further.

More Cardano News

The bull and the bear case for BTC

Bitcoin price saw a recent bullish impulse that faced massive headwinds before it tagged a crucial psychological barrier. With directional bias and choppy price action, BTC is likely to experience massive volatility as the situation resolves over time. 

Read full analysis

BTC

ETH

XRP