What’s Driving the Solana Rally?
Solana fell to as low as $8 after the collapse of FTX. It's now up over 80% in the last 30 days. What gives?
Solana rallied over 24% during the past 24 hours, hitting $45 at its peak. More impressive: It’s up nearly 80% in the past 30 days.
On the face of it, analysts say we’re seeing a classic short squeeze. But driving that is a narrative that basically says that Solana is not only as good as Ethereum—it promises to replace it.
For the longest time, SOL holders were derided as “Soylana Manlets.” The network was especially hard hit by the FTX debacle because FTX and Solana were heavily invested in each other. FTX invested in both Solana and projects built on top of it. For example, together with the Solana Foundation, FTX co-created Serum, a now defunct DeFi protocol which, in its heyday, was the backbone of the Solana DeFi ecosystem.
The Solana Foundation also holds several million dollars worth of FTX common stock and FTT tokens. This means that when FTX went down, Solana suffered both from the size of its treasury shrinking, as well as the fact that the SOL that FTX held has now been passed on to liquidators.
But thanks to growing developer support—its developer base grew over 40% year over year— and a growing cadre of Solana true believers refused to die. These days, the Solana vs Ethereum debate has become one of the loudest conversations on Crypto X/Crypto Twitter.
In essence, Solana’s advocates say the proof-of-stake blockchain’s novel technology is faster, more scalable, and cheaper to use than the Ethereum blockchain. (Here’s a fuller explanation of the network’s underpinnings vis a vis Ethereum’s.)
