- Solana’s DEX volume and increased network fees mean a growing user base.
- The deployment of Firedancer is expected to improve Solana’s network performance.
- Solana improves with upcoming airdrops and ongoing meme coin activity.
After nearly collapsing due to the FTX bankruptcy in late 2022, Solana has made a remarkable recovery. The token rose 580.44% from $21 to $154.25 last year, sometimes ranking third among crypto assets. This is currently being noticed by leading analysts, who predict that it could rise further.
According to a recent analysis by Franklin Templeton, Solana is positioned to surpass Binance Coin (BNB) and USDT, permanently taking third place. The analysis breaks down the key factors behind Solana’s success.
What’s behind Solana’s rise?
Research firm Franklin Templeton released the following report: report We detail Solana’s outlook and potential future trajectory after recovering from the FTX collapse. According to the company, the rally was driven by a surge in trading volume on decentralized exchanges (DEXs). Notably, this amount increased from $1.1 billion in November 2023 to $35.2 billion in April 2024.
Airdrops within the ecosystem have greatly enhanced this transition. Projects like Jito and Pyth have created billions of dollars in wealth. In fact, their airdrop rewarded Solaan holders with free tokens that were later worth billions of dollars. The airdrop increased investor interest in these tokens and Solana as a whole.
According to the report, Solana was well-positioned to benefit from this drop thanks to its technical advantage. Unlike Ethereum, low fees and fast speeds allow even non-technical investors to enjoy the benefits of airdrops without paying exorbitant gas fees.
The introduction of Firedancer, Jump Crypto’s new verification client, will further increase these benefits. Crucially, the upgrade improves data throughput and maximizes utilization of client hardware, reducing costs for verifiers.
Can Solana overtake BNB and USDT?
Solana has overtaken BNB several times before, especially during periods of significant market momentum. Most recently, Solana converted BNB in February and March 2024, driven by strong momentum in memecoin trading. However, as the market cooled down, BNB regained the top spot.
However, Franklin Templeton expects future airdrops to solidify Solana’s position and potentially push it into third place. This leaves SOL overtaking Tether, behind only Bitcoin and Ethereum.
This insight may partially explain why Solana investors are not paying much attention to some issues, including ongoing network congestion. Moreover, FTX’s holdings of billions of tokens may cause long-term backlash. However, for now these tokens are locked up and investors seem confident about SOL’s prospects, at least in the near future.
On the flip side
- The memecoin that contributed to Solana’s success is highly volatile. If enthusiasm for memecoins declines, Solana could collapse.
- Solana experienced several severe network outages. Recent congestion issues have raised concerns about network stability.
Why This Matters
Solana’s rise isn’t just important for traders. A higher market capitalization can attract more developers to Solana. This will increase the number and quality of Solana’s decentralized applications (dApps), strengthening the ecosystem.
Learn more about Solana’s outlook for BNB:
Solana Takes 4th Place in BNB: What Happened and Will It Stay?
Learn more about Solana’s latest technological achievements:
Solana Enters Buy Zone as Major Crypto Markets Rebound