A Breakdown of Solana's Soaring Numbers in December 2023 and Potentials for Continued Growth
One blockchain has been grabbing the spotlight in recent weeks: Solana. With a flurry of positive developments and unprecedented growth, Solana is making waves in the digital landscape. Let's delve into the key factors driving Solana's recent success.
Cathie Wood's Optimism Sets the Stage
It started out with a ringing endorsement from Cathie Wood, the influential CEO of ARK Invest, on CNBC. Wood's positive remarks regarding the efficiency and affordability of the chain sent the price of Solana's native token, SOL, soaring by 18% within a mere 24 hours. What followed was even more remarkable - a staggering 52% surge in just one week, propelling SOL to an impressive $67.69.
Wood's optimism wasn't just a flash in the pan. It seemed to spark a chain reaction of positive events that laid the foundation for Solana's meteoric rise.
The Introduction of Inscriptions on the Solana Blockchain
In a bid to stay ahead of the curve, the blockchain introduced its own inscriptions and SPL-20 token standard. These innovations, inspired by Bitcoin's Ordinals and BRC-20 token standard, have been a game-changer.
SPL-20 inscriptions serve as distinct addresses dedicated to storing images on the Solana blockchain. Inspired by Bitcoin's BRC-20 token standard, SPL-20 introduces dynamic rendering and on-chain media support, offering a more interactive digital art experience. Unlike traditional NFTs that rely on external services like Arweave for storage, SPL-20 allows image NFTs to be housed directly on the blockchain, each with their own unique address. The ranking system of SPL-20, akin to Bitcoin Ordinals, introduces an element of FOMO (Fear of Missing Out) to incentivize early inscription, creating a vibrant ecosystem where users actively participate in on-chain art creation.
To inscribe an SPL-20, users must hold update authority, ensuring that only the NFT's creator has control over the inscription process. This prevents unauthorized changes to the image and enhances the security and authenticity of on-chain art. The driving force behind SPL-20 inscriptions is the collaborative effort of LibrePlex, a decentralized and fully open-source Digital Asset Protocol for Solana.
The numbers speak for themselves; on December 27, 2023, over 1.8 million SPL-20 inscriptions were recorded, a testament to the growing activity on the Solana blockchain. The number of creators in the ecosystem has also surged past 64,000, indicating a substantial increase in inscription-based activity.
Source: Nova Research on Dune
Paxos Approved to Release Stablecoin on Solana
Regulatory hurdles have often been a stumbling block for blockchain projects. However, Solana received a significant vote of confidence as the New York financial regulator approved Paxos' expansion to the Solana blockchain . This green light allows Paxos to issue its stablecoin on Solana, marking a historic moment for the blockchain industry, as this is the second chain on which Paxos decides to launch a stablecoin, the first being Ethereum. The scheduled launch on January 17, 2024, is eagerly awaited as it signifies Solana's expanding reach and growing maturity.
Open-Source Surge in Solana Protocols
Transparency and collaboration are crucial in the world of blockchain. Solana has shown an impressive transition towards embracing the primary ethos of blockchain, going from over 70% closed source in mid-2021 to over 85% open source as of now. This shift not only fosters a sense of community but also enhances trust among developers and users alike.
Source: DefiLlama
Results: Record-Breaking Numbers in December
Due to the recent events on Solana as described above, as December unfolds, Solana has achieved an incredible winning streak.
A Surge in Total Value Locked, Active Addresses, and SOL Price
Solana achieved a remarkable milestone in Total Value Locked (TVL) during December. According to DefiLlama , the platform saw a staggering $5.1 billion in TVL, marking an extraordinary 1114.29% increase from January's TVL of $418.7 million. Notably, this also reflects a significant 155% jump from November's figure of $2 billion. The surge in TVL speaks volumes about the confidence and trust users are placing in the Solana ecosystem, further solidifying its position as a formidable player in the blockchain space.
Source: DefiLlama
Adding to the impressive metrics, according to data from The Block , the Solana network witnessed record highs in both monthly active addresses (17.26 million) and monthly new addresses (7.67 million) as of December 25. These numbers represent a substantial 65% increase in monthly active addresses from November, underscoring the growing popularity of Solana.
The price of SOL has been on a rollercoaster ride, currently standing at an impressive $110.49. The positive market sentiment and increasing adoption of crypto ETFs globally have undoubtedly contributed to Solana's ascent.
Token and NFT Frenzy
One of the most fascinating aspects of Solana's recent surge is the proliferation of tokens and NFTs on its network. Daily, thousands of new tokens are launched, and tens of thousands of NFTs are introduced to the Solana ecosystem. Since December 22, more than 7,000 are launched per day on Solana.
Source: Solscan
On December 17 alone, a staggering 575,784 new NFTs rolled out on Solana, highlighting the platform's appeal to creators and collectors alike.
Source: Solscan
Challenges Amidst Success
While Solana is basking in the glow of success, it's not immune to challenges. The rocketing demand for Solana has led to a significant increase in network fees, reaching an all-time high of 591.3 SOL on December 25. As the platform handles the surge in activity, managing scalability and network fees will be pivotal to sustaining this positive momentum.
Source: Solscan
Potentials for Continued Growth
As we take stock of Solana's recent triumphs, it's only natural to wonder: Can the blockchain sustain this remarkable momentum, or are we witnessing a fleeting surge? Examining the landscape, several factors suggest that Solana could be poised for even more growth in the coming months.
The upcoming launch of Paxos' stablecoin on Solana, scheduled for January 17, 2024, represents a key milestone that could further amplify the platform's utility. The continued influx of projects and creators, as evidenced by the rising number of inscriptions and new tokens, suggests a thriving ecosystem that attracts and retains talent.
However, challenges, notably the surge in network fees, underscore the need for strategic solutions to maintain Solana's accessibility. As the blockchain space evolves, Solana's ability to adapt, scale, and address these challenges will be pivotal in determining its future trajectory. With the positive market sentiment, Solana appears poised for continued growth, but vigilance and adaptability will be essential to navigate the ever-changing landscape of the cryptocurrency market.
To stay ahead of the curve and actively participate in Solana's growth story, consider exploring quality Solana-based tokens on Bitget. Tokens such as JITO (JTO) , SOLS (SOLS) , Analysoor (ZERO) , etc. offer opportunities to ride the wave of Solana's success. Become a part of the thriving Solana community as it charts a course towards an exciting and promising future.
Concluding Thoughts
Despite the growing numbers of blockchains in an already crowded space, Solana has managed to stand out with a series of strategic moves and positive developments. From endorsements by influential figures to innovative token standards, regulatory greenlight, and record-breaking network activity, Solana's journey in recent weeks has been nothing short of extraordinary. As the blockchain continues to evolve, the eyes of the crypto community will undoubtedly remain fixed on Solana, watching to see if it can maintain its upward trajectory in the competitive world of digital assets.
Disclaimer: The opinions expressed in this article are for informational purposes only. This article does not constitute an endorsement of any of the products and services discussed or investment, financial, or trading advice. Qualified professionals should be consulted prior to making financial decisions.
