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Solana (SOL), a fast emerging blockchain project, has caught the attention of investors in the crypto space in recent weeks. The platform's native token, SOL, rose to prominence in August when it jumped from a price of $31 to hit a new all-time high of $213 last week.
That parabolic growth has seen Solana take on the most prominent names such as BTC and ETH and enter the top ten list of the most valuable blockchain projects. The SOL token has tripled in value over the past few weeks amid anticipation that the project's ultra-fast speeds and low transaction fees could make it an Ethereum killer.
Solana has subsequently gained massive traction on the promise of delivering highly scalable, secure, and decentralized Dapps in decentralized finance (DeFi).
The blockchain has benefited massively from the recent NFT boom, which Ethereum currently dominates. The digital collectibles market has found a new home on Solana after the project unveiled new and exciting projects such as Aurory and Degenerate Ape Academy in August.
NFTs, which are currently one of the hottest sectors in the crypto space, have propelled Solana's market value to new heights. The market cap rose from approximately $1.2 billion early last month to a whopping $35 billion at the height of the SOL rally.
Interestingly, the SOL price even managed to withstand a massive selloff that recently hit the crypto market. That flash crash wiped out over $400 billion from the total market cap of digital assets on El Salvador's 'Bitcoin Day.'
The seventh most valuable token, according to coinmarketcap, gained 5% on the day as other industry heavyweights such as ETH and ADA logged double-digit losses.
However, unexpected events cut short Solana's uptrend this week, sparking a heavy SOL price downtrend that surprised market participants. Here is a look at what caused the project's unexpected descent after weeks of bullish momentum.
We shall also analyze how rival blockchains such as aelf (ELF), Polkadot (DOT), and Kasuma (KSM) have performed in recent weeks.
The Solana project has endured a couple of devastating days characterized by network outages. The network hit a pause on September 14 after suffering a Denial-of-Service (DoS) attack that made services inaccessible to users.
The blockchain platform confirmed on Twitter that its mainnet-beta was experiencing "intermittent instability" The devastating cyber-attack resulted in a prolonged network outage which rendered transaction validators unable to produce new blocks for hours on end.
The unexpected downtime resulted in a hit on the SOL price, which tanked over 26% on September 15. The high-flying token dropped as low as $145 on the day, its lowest price since September 6.
The Solana team attributed the DoS attack to resource exhaustion on the network after bots sent a flood of 400,000 transactions per second. The increased demand overwhelmed network nodes, causing them to shut down.
That influx of transactions came amid increased hype from the Grape IDO, which led to unprecedented demand. The new protocol introduces a toolset that benefits Solana-based DeFi and NFT projects.
The network outage prompted community members to criticize Solana's semi-centralized structure, which helps the blockchain achieve higher speeds.
One Twitter user called out Solana for being one of the most centralized projects in the blockchain industry. He claimed that financial cartels looking to control crypto own most tokens, making the project highly susceptible to manipulation.
Immediately after the DoS attack incident, the community of validators worked out a plan to fix the issue with a potential network restart.
A recent update shows that the node validators have successfully initiated a restart of Solana's mainnet Beta. The team expects block explorers, decentralized apps, and other supporting systems to recover soon and restore full functionality to the network.
In their latest post, the Solana team explained to the community that they had introduced safeguards to prevent a congestion attack in the future.
"Engineers across the ecosystem deployed several mitigations in 1.6.25 to increase network resiliency during periods of extreme transaction load," they wrote on Thursday.
The SOL price seems to have reacted positively to the news, as it has recovered slightly from the crucial support floor near $145. The SOL/USD pair is trading for $155 during press time. The project currently has a market cap of $10.39 billion, per the latest data from Defillama.
Market participants will have to see whether the project can recover fully from the recent cyber-attack and continue establishing its place as a leading blockchain ecosystem.
Red hot blockchain aelf (ELF) is getting a lot of attention from crypto enthusiasts. The project introduces the next paradigm shift from centralized to decentralized cloud computing to offer solutions for the future of the digital economy.
aelf represents a real Layer 2 solution that integrates a multi-sidechain and cross-chain collaboration structure, enabling unlimited scalability and interoperability across multiple blockchains.
ELF, the native token of the decentralized cloud computing platform, is used to pay for side-chain index fees, gas fees, and production node deposits. The token also serves as the voting mechanism for the community and is disbursed during block rewards.
Affordability is a significant factor empowering aelf to integrate diverse use cases via its decentralized cloud computing methodology. The blockchain platform has a service fee of $0.1, allowing any user to enjoy its high performance and cross-chain technology.
The budding network boasts efficient, private, and secure communication between the main chain's numerous side chains, allowing for direct interoperability between side chains. aelf's developing cloud computing tech facilitates companies to utilize the blockchain for multiple business scenarios, fostering enterprise business transformation.
What's more, aelf has a versatile oracle that empowers users to retrieve data and transfer it between various projects via its advanced cross-chain technology. The self-evolving blockchain supports high-speed multi-parallel and intra-chain transactions at very low fees.
The lightning-fast blockchain is enjoying a high level of on-chain activity after recently developing capabilities to accommodate decentralized apps (dApps) from Ethereum and Polkadot. The ecosystem has also paved the way for a new era in dApp development by providing project dev teams with free templates to build new applications.
aelf has also tapped into the fast-growing NFTs market. The revolutionary project now allows users to circulate rare digital collectibles between the ETH and the aelf ecology.
The ELF token gained significant traction recently when aelf announced the launch of the Mainnet swap. The highly anticipated event allows users to exchange older ERC20 ELF for the new ELF mainnet tokens.
The event generated massive hype in the crypto community, catapulting the ELF token price from $0.30 in August to highs above $1 at press time. The ELF price could reach $2 by the end of 2021 as the project continues to offer users the highest degree of freedom via its cross-chain function.
Huobi Global has committed to supporting the aelf swap before September 23. Investors expect other top-tier exchanges to facilitate an efficient, safe, and seamless Mainnet token swap.
Polkadot (DOT) and Kusama (KSM), the cornerstones of the Polkadot ecosystem, have logged significant gains in recent weeks.
DOT, the eighth largest token in terms of market value, rallied more than 25% at the start of September. Meanwhile, Kusama, a test environment that allows dev teams to experiment on projects before launching on Polkadot, saw its native KSM token doubled in value.
The DOT and KSM rallies made the digital assets some of the market's biggest gainers at the time as they beat some of their top rivals. Investors rushed in to fight for the first slot of the second round of parachain auctions, which would allow them to bet back their favorite projects.
The massive gains came as the Kusama Council announced the second round of parachain auctions in June 2021. That debut auction raised a whopping $450M TVL, prompting the Council to announce five further parachain auctions.
Demand for Polkadot's canary network has skyrocketed ever since, as participants in the auction need the stake KSM to endorse their projects of choice. As of this article's writing, the KSM token is changing hands for $416 with a healthy trading volume of over $256M.
Meanwhile, the DOT is edging closer to pumping higher after adding nearly 11% to its value on the weekly chart. Over the past 24 hours, the token has faced a fierce fight between bulls and bears; the price pumped 6% yesterday but cooled off as selling pressure mounted.
The popular altcoin is hovering around the psychologically important resistance level near $34 at press time, per data from coinmarketcap.