Inside the Solana hype and why prices of Bonfida, Serum, and Raydium are surging 🚨 This article is 4 years old...
Inside the Solana hype and why prices of Bonfida, Serum, and Raydium are surging
The Solana ecosystem is surging in both application launches and prices. But why?
3 min read
Updated: Apr. 28, 2021 at 3:46 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
While the crypto market plunged by several percent last week, a sliver of coins running on the Solana ecosystem remained in the green, data from several sources shows.
The moves could be attributed partly to the blockchain’s low-fee, high throughput capabilities, and partly to one of the biggest public backers of the Solana project—FTX founder Sam Bankman-Fried.
Solana charms
Founded in 2017, Solana was created by ex-Dropbox engineer Anatoly Yakovenko and co-founders Eric Williams and Greg Fitzgerald to address the issues plaguing the top two crypto networks, Bitcoin and Ethereum.
The team used a unique “Proof of History” consensus design—spread over 200 physically distinct nodes—that relied on historical records that proved that an event (i.e. transactions) occurred during a specific moment in time.
The Solana ecosystem feels like Ethereum back in 2018 – lots of potential and excitement with dozens of real applications
However, would love to see more applications that take advantage of the speed
Ex. On-chain telegram that streams tokens to a DAO every time you send a msg
— Brian Flynn ? ?️ (@Flynnjamm) April 26, 2021
All evaluated transactions are given a unique hash and count that can be publicly verified. The count allows network participants to verifiably determine each transaction has occurred, allowing the blockchain to function as intended.
Such fundamental metrics have played their role in the popularity of SOL, Solana’s native token. What attracts investors to the ecosystem are the low fees (a few cents) and speeds of over 65,000 transactions per second (tps), compared to Ethereum’s $50-$100 fees and 15 tps.
The Bankman-Fried effect
And there’s then Bankman-Fried. The young billionaire, known for his work with FTX and Alameda research, is heavily involved in supporting the Solana ecosystem by listing new projects on FTX and funding the development of applications building on Solana.
“The SOL rally is partially a delayed reaction to the work that’s been put into the ecosystem over the last year, and the need to find scalable solutions for DeFi as the ecosystem grows,” Bankman-Fried said in a recent statement to business outlet Bloomberg.
His association with and the performance of Solana, has, in recent times, led to Solana-based coins popping hundreds of percent in the past few weeks.
“Sam is an extremely talented entrepreneur and has had staggering success with FTX, so it doesn’t surprise me that people are indirectly backing him by betting on his associated tokens,” explained Nic Carter, co-founder of researcher Coin Metrics.
Even billionaire crypto investor Mike Novogratz , the founder of Galaxy Digital, is betting on the so-termed “Sam coins,” a recent tweet showed.
$LUNA snd $SOL trade like they want to go higher. Good horses to ride.
This year betting on the ecosystems of @SBF_Alameda and @d0h0k1 has been a great investing strategy. I guess they are heir apparent to @cz_finance who continues to crush it.— Mike Novogratz (@novogratz) April 24, 2021
Leading applications see token pumps
As per Solana COO Raj Gokal, over 150 different apps have been built for Solana already. And among the handful of Solana-based cryptocurrencies, some have stood out in the past few months.
Serum, a token used on the new decentralized derivatives exchange (DEX) created by FTX, has seen its market value jump to $494 million from $51 million this year. The DEX allows traders to punt on several cryptocurrency pairings with fees of a fraction of a cent within time periods comparable to centralized exchanges (CEXs) like FTX or Binance.
We're continuing to build out an incredible ecosystem on Serum and there's been many good questions about what we have in mind and how our recent decisions will lead us there.
Find answers in our new series!https://t.co/LpLntmp34z
— Serum (@ProjectSerum) April 27, 2021
The SRM token gives holders up to 60% off fees, with 80% of DEX fees going to SRM “buy & burn” program. This creates a theoretically decreasing supply for SRM—aiding an increase in value.
Another Solana star is Raydium, an automated market maker (AMM) and liquidity provider built on the Solana blockchain for Serum.
It enables faster transactions, significantly lower fees, and enhanced scalability for traders by Raydium provides on-chain liquidity to a central limit order book, meaning that Raydium traders and liquidity providers get access to the entire order flow and liquidity of Serum.
That was quick. ?
700m mile marker now in the rear view! pic.twitter.com/OTq1P41EyN
— Raydium (@RaydiumProtocol) April 27, 2021
RAY are awarded to traders who provide liquidity to the network. They are worth over $14.35 at press time with a market cap of over $525 million.
The last among the top three Solana projects is Bonfida, an AMM, trading program, and API tool helpful to beginners and experienced users that integrates various handy features, such as trading charts and TradingView data in its interface.
Following SRM strong momentum, SRM Super Trend Strategy has been up by 85.76% since inception?https://t.co/WBXeO3oBn8
Learn how it works ?https://t.co/I13mCVMCfI pic.twitter.com/ys4s8lQHMA
— Bonfida (@bonfida) April 26, 2021
As per its site, Bonfida’s daily volumes average around $65 million, with over $2.6 billion traded since inception. FIDA is the project’s native utility token, finding its use in paying for gas fees on the platform alongside features like VIP API access, bot payments, and “consulting” services.
Some caution
Apart from the above, there are upcoming projects like Step Finance and Mango Markets that are creating considerable hype among crypto circles with millions of dollars already vested or staked on the platform.
Added this week
side by side or stacked order-book
margin calls
10 TV timeframes and all chart tools
phantom/Sollet extension
light, dark, and mango themes
customizable UI panels
latency improvements
clean code base for future building
ability to withdraw borrowed funds— Mango Markets (@mangomarkets) April 27, 2021
Meanwhile, despite the enthusiasm, some investors continue to express caution. “It’s been going up because it’s a good blockchain that seems to be gaining ground recently,” noted crypto investor Bloomberg Opinion writer Aaron Brown.
He added, “But there are lots of good blockchains and (as everyone knows) the sector is volatile and prone to short-term enthusiasm.”
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In this article
Solana is a high-performance blockchain platform that utilizes a unique consensus algorithm called “Proof of History” to achieve fast transaction speeds and low fees.
Raydium
$4.39419
Raydium is an automated market maker (AMM) and liquidity provider built on the Solana blockchain for the Serum decentralized exchange (DEX).
Serum
$0.03413
Serum is a decentralized exchange (DEX) built on the Solana blockchain.