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SOL Hits Record High, Climbs Above $100 as Total Value Locked on Solana Crosses $3B

SOL draws a three-figure price for the first time as boom in DeFI and NFTs continues and token-burn speculation grips markets.

Aug 30, 2021 at 9:44 a.m. UTC
Updated Aug 30, 2021 at 7:20 p.m. UTC

Programmable blockchain Solana’s SOL token crossed the $100 mark on Monday, drawing a three-figure price for the first time.

The cryptocurrency ranked eighth largest by market cap, ahead of polkadot and stablecoin USDC, and is currently trading just short of the record $101 registered during Asian hours, CoinGecko data show.

While SOL has gained more than 5% in the past 24 hours, prices for bitcoin and other major cryptocurrencies have remained steady or been lower. SOL has more than doubled in the past two weeks, largely on the back of the boom in decentralized finance (DeFi) and non-fungible tokens (NFTs).

The total value locked (TVL) in Solana-based DeFi applications has risen to an all-time high above $3 billion, marking a 400% increase over the past 30 days, according to data provided by Defi Llama.

TVL is one of the most commonly used metrics to assess the growth of the sector. Solana is the fifth-largest DeFi blockchain by TVL at press time, followed by avalanche and behind polygon. Ethereum remains the industry leader.

The frothy NFT market continues to boil. According to data tracked by The Block, the average price of an NFT sale hit a record $63,730 on Sunday, up nearly 270% in four weeks. Solana launched the Degenerate Ape Academy two weeks ago, venturing into the buzzing NFT space.

In addition, social media chatter shows some investors speculating that Solana’s impending Ignition upgrade may introduce an additional token-burning mechanism or liquidity-mining incentive.

The speculation started doing the rounds early Monday after Solana tweeted an Ignition teaser video, showing a purple flamed lighter.

SOL is a utility token with two main use cases: paying for transaction fees incurred while interacting with smart contracts and staking tokens as part of the proof-of-stake mechanism.

Solana network burns SOL as part of its deflationary model. Token burning effectively removes coins from the available supply, boosting their relative scarcity.

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Omkar Godbole is the senior reporter on CoinDesk's Markets team.

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