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There is little doubt that Ethereum was the pioneer in introducing smart contracts and DeFi to the cryptocurrency ecosystem, solidifying its position as the most widely utilised blockchain in the world. However, various next-generation networks have recently arisen that rely on overcoming many of the difficulties that the previous blockchain experienced.
While many of the tokens on these blockchains were previously linked to Ether’s price movement, it can now be seen that they have broken free of Ethereum’s shadow to forge their own pathways to new all-time highs. While both projects are quite popular, their intrinsic capabilities effectively compete with those of Ethereum.
Qiao Wang, a cryptocurrency analyst, recently stated on Twitter that ecosystems such as Solana, Polkadot, and Polygon have reached “escape velocity.”
Having reviewed 1000+ applicants to the @defialliance accelerator, I have a unique perspective into the various dev ecosystems.
Right now I can confidently say Solana, Polkadot, and Polygon have reached escape velocity (outside Ethereum).
Celo and Algorand possibly next.
— Qiao Wang (@QwQiao) August 30, 2021
Ethereum’s main setback comes from its own popularity. Due to high demand and user volume, the network has often become congested, leading to transaction fees soaring.
All aboard the Solana hype train
Solana, released just 18 months prior and still in its beta phase, was one of August’s best-performing projects. Gaining by 246.8% in valuation over the past month, the asset smashed resistance levels to score new all-time highs and premiere in the top 10.
Much of this can be attributed to the network’s foray into the profitable world of NFTs. Solana recently launched Degenerate Ape Academy, and high consumer demand led to the asset’s price soaring. It also rode on the back of August’s NFT rally which hit record sales of about $900 million.
Moreover, several projects are also turning to the promising network to build DeFi applications on top of it. Its total value locked in DeFi recently crossed $2 billion, out of an overall $98 billion. By prioritizing smart contracts, Solana has been able to highly leverage the DeFi and NFT spaces in its favor.
The network also boasts the highest speed currently, capable of conducting 50,000 transactions per second, compared to Ethereum’s 30. Moreover, the network claims to solve the ‘blockchain scalability trilemma’ by using the Proof-of History (PoH) consensus. Apparently, this allows it to have high transaction speed, decentralization, and security.
On the other hand, Ethereum is on the way to transitioning towards Proof-of-Stake, having been run on energy-intensive PoW up until now.
Needless to say, many in the community have been receptive to such strides in development. In fact, Santiment recently reported that 10% of all crypto-conversations on Twitter were centered around the network.
😎 #Solana is making up nearly 10% of #crypto conversations right now as it blasted off to a new #AllTimeHigh of $106.82. As #Bitcoin and most other #altcoins range, volatile & pumping coins like $SOL will continue to intrigue traders looking for action. https://t.co/m0SdRECJHQ pic.twitter.com/LwC26DoyiW
— Santiment (@santimentfeed) August 30, 2021
DOTting the uptrend
Another case in point is Polkadot. The network’s native token DOT saw consistent price appreciation over the year, gaining by over 1,100% in valuation since its low on 20 August last year. In the last month alone, its price grew by almost 80% thanks mainly to updates on its ecosystem.
The future parachain auctions of the multichain protocol, one of the key proponents of its bullish price action, have sparked a lot of interest. Through these acts, DeFi initiatives will compete for community votes in order to get one of the network’s limited launch slots. The network’s popularity is growing as a result of the large number of projects that want to launch on it.
Users stake their tokens as part of the auction process to help fund the projects that win these slots. This has raised the buying demand on the token while diminishing its circulating quantity, resulting in a price increase.
The growth in terms of protocols and supporting infrastructure over the past year has been relatively unmatched. As the system continues to onboard new projects through its auctions, this growth is only expected to continue.