(Kitco News) - The layer-1 protocol Solana (SOL) was one of the rising stars during the crypto bull market of 2021 as its high throughput and fast transaction times briefly earned it the label of “Ethereum killer” for some in the crypto community.
Unfortunately, the market downturn of 2022 took a heavy toll on the smart contract platform, which was further exacerbated by the project's close ties with FTX and Sam Bankman-Fried, who were Solana’s major financial backers.
As a result of the onset of crypto winter and the collapse of FTX, the price of SOL has fallen 96.94% from its all-time high of $260 in November 2021 to a low of $7.95 on Dec. 29, 2022, a move which has devastated token holders.
SOL/USD 4-hour chart. Source: TradingView
But things now appear to be turning around for the beleaguered project as the worst of the FTX saga has passed and none other than Ethereum co-creator Vitalik Buterin has spoken out about the project and its potential for a bright future.
Some smart people tell me there is an earnest smart developer community in Solana, and now that the awful opportunistic money people have been washed out, the chain has a bright future.
— vitalik.eth (@VitalikButerin) December 29, 2022
Hard for me to tell from outside, but I hope the community gets its fair chance to thrive????
The tweet from Vitalik marked the low in the price of SOL, which has since rallied 78.42% to hit a daily high of $14.22 in early trading on Wednesday amid a 47.25% spike in its 24-hour trading volume to $1.27 billion.
NFT usage on Solana provides a boost
It’s not just the praise from Vitalik that has sparked the bullish move in SOL as the network continues to see increased usage, especially in the realm of non-fungible tokens (NFTs). Despite the significant loss in value experienced in 2022, NFT trading volumes on the Solana blockchain remain strong, with the protocol seeing a surge in activity on Christmas Day.
Over the past 30 days, data from CryptoSlam shows that Solana saw more than $77 million in NFT sales while the protocol processed over 775,000 transactions, beating out other popular protocols like Polygon and ImmutableX. Only Ethereum (ETH) saw more NFT sales and transactions processed, showing that Solana remains a potent contender.
Top blockchains by NFT sales over the past 30 days: Source: CryptoSlam
A lot of the current hype being generated for Solana is due to the rising popularity of BONK, a Solana-based “doge meme” that has captured some of the momentum generated by Dogecoin (DOGE) and the Ethereum-based token Shiba Inu (SHIB).
The game launched near the end of December and conducted a large-scale airdrop that saw free tokens sent to the wallets of a variety of Solana developers and NFT collectors including those that joined LamportDAO, which is a hub for Solana builders, and owners of NFTs from several projects including DeGods and Famous Fox Federation.
In total, 100 trillion BONK tokens were minted, with 50% of the total supply airdropped to developers, NFT owners, creators, and artists, while a large portion of the remaining supply is locked into vesting contracts for BONK contributors.
Thanks to the excitement around BONK, Solana had managed to climb its way back into the top 20 tokens after briefly falling out of the top ranks when its price dipped below $8. While the recent turnaround in price is a welcomed sight for SOL holders, the token still has a long way to go to regain some semblance of its former glory as the crypto winter rages on, with no signs of spring yet on the horizon.
Moving forward, the developers behind Solana have several initiatives planned that could further help the token recover, including upgrades to the project at a protocol level and the introduction of the Solana Mobile Stack, which is being developed by Solana Mobile and will initially be launched on the Android-compatible Saga phone with the goal of helping to make mobile more crypto-friendly.
