Solana’s Scorching Rally Shows Ethereum Has a Serious Competitor

Solana (SOL) generated tremendous hype in 2021, with fans touting its ability to solve the Ethereum (ETH) blockchain’s core problem. Solana, it was promised, would be a cheaper and faster place to handle transactions, a better springboard for decentralized finance, or DeFi, and other smart contract-powered activities.

Then came 2022 and all that pain. Things looked bleak for Solana (and, let’s be honest, most of crypto). It didn’t help that Sam Bankman-Fried was closely linked to Solana and its SOL token, which sank below $10.

SOL was back in the $20s in October as SBF was on trial. Then, all of a sudden, Solana and SOL turned into just about the hottest things going. SOL is above $100 now for the first time since early 2022 and, at $47 billion, it’s the fifth-biggest crypto – and it was briefly fourth-biggest earlier this week.

My colleague Danny Nelson cogently summed up recent events this weekend when SOL exceeded $100:

Ethereum remains the leader among layer-1 blockchains that can run smart contracts, aka the bedrock of DeFi. Ethereum has $29 billion of total value locked, a measure of money stashed in a particular blockchain’s ecosystem, far exceeding Solana’s $1.5 billion, according to DefiLlama data.

But recent events show Solana may be a serious competitor now.

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