Solana Sustains Steady Recovery After Over 100% Price Gain In Q1 2023

Bitcoin

The price of Solana (SOL) has continued to enjoy a steady recovery after going down nearly 95% in 2022, partly due to its association with Sam Bankman-Fried and his collapsed ventures, FTX and Alameda Research.

Solana’s Price Surges 100% In Q1 2023

In the first quarter of 2023, Solana’s price experienced a significant surge of 104%, reaching approximately $20.60 per SOL. This growth rate outperformed every other cryptocurrency in the top 25, including Bitcoin BTC ($27,946) and Ether ETH ($1,849).

Solana’s price performance in January 2023 surpassed any other month since August 2021. The SOL/USD pair rallied by approximately 140% without any significant fundamental developments that could have been responsible for the rate surge. The excessive overselling of the SOL/USD pair in December 2022 led traders to purchase the dip and drive up the price.

The rally also corresponded with Messari’s assessment of the Solana ecosystem following the collapse of FTX. The analysis showed that Solana’s staking and decentralization remained stable and actually improved, contributing to its positive position post-FTX fiasco.

Solana has also continued the impressive run in April. Although suffering a little drawback in the first week of April, charts by TradingView show that it’s nothing more than a mere correction. And many believe that the 10th biggest cryptocurrency by market capitalization, according to CoinmarketCap, is gearing up for another impressive run in April.

Solana Unveils On-Chain Storage Cost Reduction Solution

Last week, Solana announced a new solution to decrease the expenses associated with on-chain storage significantly. The technology, named “state compression,” guarantees a significant reduction in the cost of creating 1 million non-fungible tokens (NFTs) on the Solana network to approximately $110.

This state compression solution was praised by Twitter users, who referred to it as a “game changer” and a means “to make Solana a much more viable option for enterprise use cases. “Solana’s tech lead explained that the state compression technology is based on Merkle trees, capable of compressing a data tree’s verifiability into a “hash” or “fingerprint” of the current state.

This compression-friendly data structure allows developers to store small amounts of data on-chain and update it directly on Solana’s ledger, thereby reducing the cost of data storage while still utilizing the security and decentralization of Solana’s base layer. The tech lead also noted that this solution would make Solana a more viable option for enterprise use cases.

The state compression solution was developed collaboratively by Solana Labs and Metaplex, with support from Phantom and Solflare, and is powered by RPC node providers, including Helius, Triton, and SimpleHash. Various Solana ecosystem projects, such as Dialect, Crossmint, Helium, and Wordcel, have already implemented state compression to develop various applications, including NFT minting, integrations for business loyalty programs, and user experience enhancements.

It will be interesting to see how Solana moves this week, as it will be pivotal in its general trend for the second quarter of 2023. At the time of writing, SOL is trading a $20.03, down by over 5% in the past week.

Featured Image from Unsplash.com, charts from Coinstats, Coingecko, and Tradingview.