Solana’s SOL token dominated cryptocurrency markets in August, nearly tripling in price as investors speculated on the rapid growth of “smart contract” blockchains that could one day rival Ethereum.
The price of the SOL token rose 195% to $ 108 in August and is now valued at $ 33.7 billion. This year alone, the asset has grown 62 times.
Terra’s LUNA token, another smart contract blockchain, also nearly tripled in August, increasing its market capitalization to around $ 13 billion.
Among CoinDesk 20, a curated list of digital assets, Cardano’s ADA token was the front runner, doubling over the month, followed by Polkadots DOT with a 75% return.
All of these top performers in August were members of a group known as “Ethereum killers” – layer 1 blockchains that offer low fees, improved scalability and fast transaction times, the applications such as decentralized finance (DeFi) as well as the Trades support non-fungible tokens (NFT).
The intense speculation comes from the fact that Ethereum, the second largest blockchain overall after Bitcoin, is preparing for a major upgrade called Ethereum 2.0 in the coming year.
“We have tremendous respect for the spirit of the Ethereum developer community,” Anatoly Yakovenko, CEO of Solana Labs, told CoinDesk. “It was an inspiration to watch and, in many ways, it laid the blueprint for disintermediation of all marketplaces in the world, starting with DeFi. We are in the same fight. “
Among the CoinDesk 20 digital assets, Cardano’s ADA tokens peaked in August, doubling the price. (CoinDesk)
On August 31st, Solana also launched its global five-week Ignition Hackathon, which will focus on developing Web 3.0, DeFi, gaming and NFTs. While some traders and commentators on Twitter had speculated that the Ignition event implied that a token burning announcement was imminent, a Solana spokesman said the rumor was false.
Solana, supported by investors like Andresseen Horowitz (a16z) and Polychain Capital, was founded by Yakovenko in 2017 and has attracted investor interest due to its perceived scalability, low transaction costs and fast processing speed.
Ethereum is home to the most active development community among smart contract blockchains and DeFi activities, as well as the fast growing OpenSea NFT marketplace. But the network is struggling with traffic jams and high fees.
“In the midst of the NFT madness, ETH has seen transaction fees rise, potentially attracting more users to other chains,” said a report by Arcane Research. “However, Ethereum remains the clear leader in the entire DeFi ecosystem, and it seems unlikely that any other protocol will dethrone Ethereum’s position in the near future.”