The top cryptocurrencies by market capitalization keep changing over time as the manufacture matures. Solana (SOL) has seen its value skyrocket so far this year and has been consistently processing over 2,500 transactions per second.

The cryptocurrency'south cost, according to TradingView data, is up nearly 13,000% year-to-date equally the year started with SOL trading slightly beneath $2. Solana is now changing easily-on exchanges for effectually $240.

Solana is a blockchain platform that aims to achieve high transaction speeds at a low cost without sacrificing decentralization. To do so, it relies on a number of unique features, including a "proof-of-history" machinery. This allows Solana to process an estimated l,000 transactions per 2d, compared to Bitcoin'south seven and Ethereum's 15.

Equally the Solana network supports smart contracts, decentralized finance (DeFi) applications take found a habitation on information technology. Its ecosystem now has nearly $15 billion worth of crypto assets locked on it, co-ordinate to DeFiLlama data.

Speaking to Cointelegraph, Kraken Intelligence managing director Pete Humiston noted that almost all crypto assets accept benefitted from a year-long bull run, although Solana has seen "particularly strong price appreciation due to its Web 3.0 experience."

Humiston added that transactions on Solana are "instant, cost a fraction of a penny and the ecosystem is easy to navigate thanks to convenient wallets and applications" contributing to its adoption.

Solana'southward adoption may be the result of retail investor demand that was priced out of Ethereum, according to Mindaugas Butkus, master engineering officeholder of Solana-based decentralized exchange Solanax. He told Cointelegraph:

"Growing demand for DeFi applications and NFTs on Ethereum led to exploding gas fees, which made information technology expensive to use ETH. Transacting on Solana is inexpensive and transactions are processed in no fourth dimension, making information technology an bonny culling for retail investors."

Butkus added that Solana'due south base-level protocols attracted users for the same reason Ethereum'southward DeFi infinite initially did: flourishing innovation leading to a booming ecosystem with a skilful user feel.

Is Solana a threat to Ethereum?

As the price of Solana surged, many speculators suggested that SOL will one day overtake Ether (ETH) to become the 2d-largest cryptocurrency by market place capitalization. Solana's focus on maintaining its decentralization while offer nearly-instant transactions at a low price has been a style to attract users, but there'southward more to Ethereum than gas fees.

Speaking to Cointelegraph, Adrian Kolody, founder of Domination Finance — a non-custodial exchange focusing on dominance pairs — said he believes in that location are "likewise many users vested in Ethereum" for information technology to be surpassed by Solana.

To Kolody, Ethereum is "a truly decentralized network whereas Solana falls more into the SpeedFi category." To him, at that place are idealists that refuse to interact with any ecosystem that isn't that of Ethereum:

"Ethereum would have to totally canteen their promises for Ethereum 2.0 over the coming years for Solana to overtake information technology, and even if that happens, information technology is still very unlikely."

To Kraken Intelligence's Humiston, information technology'south in the "realms of possibility that Solana could merchandise inline with Ethereum this bike if it maintains momentum and grows its developer and user community."

Humiston added that Ethereum has a "number of tailwinds of its own" that could justify its price moving up further this cycle. To the annotator, this potential cost appreciation is "why diversification amid the largest smart contract platforms" is worth considering at this signal.

Markus Bopp, chief engineering science officer of no-code nonfungible token (NFT) platform Unifty, told Cointelegraph that he believes Solana has "great potential technically," and equally it matures and developers organically leap onto its network it "could exist a good #3."

Bopp added that "this will have years moving forward," and right now it's "a lot easier equally a developer to jump on EVMs due to much lower barriers to entry," final:

"Having said that, Ethereum just can't compete with the speed of transactions on Solana which developers may increasingly look at."

Jack McDonald, CEO of digital asset custodian Standard Custody & Trust Company, told Cointelegraph that Ethereum volition "ever have a prominent identify in terms of market cap" thanks to its first-mover reward and "meaning network effects."

McDonald, whose visitor brought Solana staking to institutions earlier this month, added that Ethereum needs to go its transition to a proof-of-stake consensus mechanism correct and "do it smoothly and in a timely style, as that volition fix their gas fee upshot."

Solana'south 17-60 minutes outage

On Sept. fourteen, the Solana network went offline for roughly 17 hours subsequently enduring a deprival-of-service disruption. At the time, Twitter business relationship Solana Condition explained a large increase in transaction load to 400,000 per second overwhelmed the network, causing it to commencement forking.

After Solana'south engineers were unable to stabilize the network, its validator community coordinated a restart that brought it back to full speed. That aforementioned day, Ethereum layer-two rollup network Arbitrum One reported its sequencer went offline for roughly 45 minutes.

The attacks failed to touch on the Ethereum network, which to Domination Finance's Kolody was to be expected. Kolody noted that Ethereum is "totally decentralized and it is essentially incommunicable for the network to completely shut downward," which is "why gas fees can become insanely high."

Ethereum's resilience, he said, is part of the reason why it will "always have users and developers building on elevation of it." Kraken Intelligence'south Humiston noted the incident was a result of "unprecedented demand" that did not scare away investors.

Humiston further noted that once the network came back online, the price of SOL rallied and returned to levels seen before the network went downwardly. To the annotator, this "suggests investors didn't see the incident as ruinous to Solana'south overall narrative and value proposition."

If annihilation, Humiston concluded, Solana's price action proved that the market "acknowledges the difficulties in building a globally distributed system and expects growing pains as the network scales, evolves and innovates." To other experts, still, things aren't as clear.

A network hiccup?

While well-nigh experts seemingly agree that Solana'southward 17-hour outage was a small hiccup in a nascent network, others believe it may stand for a problem that needs to be addressed before further outages occur.

According to a Solana network explorer, the network has already processed over 39.6 billion transactions and currently processes over 2,300 transactions per 2nd. Part of those transactions may, however, be in role "thousands of critical consensus messages" that all blockchains take but don't process every bit transactions.

That's according to Justin Giudici, head of product at Telos Blockchain, who told Cointelegraph that these processes are "typically handled separately from on-chain transactions via a singled-out communications aqueduct — for expert reason."

Per Giudici, Solana's design arroyo "results in astonishing scalability claims" that are "entirely misleading." Giudici said that in real terms, a lack of separating disquisitional processes "required for each Solana node to run from the real transaction which prevents the correct prioritization of CPU cycles," which led to the crash.

Giudici sees Solana's 17-60 minutes outage as a "serious problem" for the network, equally he believes that if Solana sees "enough real transactions," which he said are estimated to be "as piddling every bit 200–300 transactions per 2nd" these tin can "out-prioritize the functioning of the networks core processes due to lack of separation of concerns in the networks architecture."

Interest in Solana keeps growing

Interest in Solana has steadily been growing, as evidenced past its growing DeFi ecosystem that has steadily been supported with the launch of new NFT marketplaces and collections. Its inexpensive transaction fees make information technology an attractive alternative for retail investors, although institutions are also keeping an middle on information technology.

Standard Custody & Trust Company's McDonald revealed that institutional investors aren't the but ones interested in Solana. Per his words, the house has had "tremendous institutional interest" to custody and stake SOL.

Oscar 50. Andrade, founder of Solana-based DeFi platform Bancambios, noted high profile projects built on Solana: Reddit co-founder Alexis Ohanian has teamed upwardly with Solana Ventures to launch a Web iii.0 and social project investment fund while Dauntless founder Brendan Eich announced information technology volition integrate with Solana on its privacy-enabled browser. Andrade told Cointelegraph:

"Reddit and Dauntless are onboarding millions of users into the Solana ecosystem because they realized it has the potential to help cryptocurrencies achieve mass adoption. Its near-costless transactions and instant finality make the use of blockchain technology seamless."

McDonald predicted the smash volition continue as institutional investors continue to invest in Solana and retail investors keep following that trend. Wall Street's interest in the cryptocurrency has been such that SOL became the third cryptocurrency to hitting the Bloomberg Terminal, after Bitcoin (BTC) and Ether.

Solana'south features have indeed been attracting a plethora of users but that's not all helping information technology stand out. Its booming DeFi infinite is assuasive retail investors to explore new funding options, decentralized exchanges and nonfungible tokens at attainable rates.

Whether Solana volition maintain its status as the go-to platform because of its features, or whether Ethereum two.0 and ETH'due south layer-two scaling solutions will abound to overtake it remains to be seen.