One of the top-most competitors of Ethereum, Solana is looking to raise $450 million in an aim to become a go-to blockchain platform for decentralized finance applications. Solana plans to utilize the funds to scale further in line with its rising ambitions. As per Crunchbase, Solana has raised $21.8 million in funding previously. It’s last funding round took place in 2019, where Solana raised $20 million from Multicoin Capital, BlockTower Capital, and more.
There have been no official announcements by Solana. But multiple sources reported that Solana, indeed, is planning to raise a large amount to fund its ambitious plans. They did not disclose the exact amount of funding they are planning to raise. Instead, they gave an estimated range of amount that Solana is looking to raise from investors. Speaking at the condition of anonymity, the sources disclosed that the sum would be in the range of $300 million to $450 million.
As per the sources, Solana began exploring funding options in March, but they postponed it, as their plans evolved into something bigger. Reportedly, the reason behind Solana’s expanded scope of fundraising is high demand.
Sam Bankman-Fried, CEO of FTX Exchange, was seemingly impressed with Solana’s growth in recent times. While commenting on the news about Solana’s fund, he said:
“I’m excited and impressed to see the recent growth of Solana’s business. They’ve had industry-leading tech for a while, and it’s gratifying to see reality catching up.”
Is Solana in the Position to Replace Ethereum Anytime Soon?
The tag “Ethereum Killer” is not something new. Many upcoming blockchain platforms have been termed so, but the reality is that Ethereum is the de facto leader when it comes to third-party applications. In fact, Ethereum accounts for 96% of all DeFi transactions. This report makes it clear that Ethereum is in a class of its own. It is still miles ahead of its competitors, including Polkadot and Solana.
Yet, we cannot deny that Solana, indeed, is one of the leading blockchain platforms that has found traction in the DeFi space. The world of decentralized finance, though mostly limited to the financial sector, is expanding to media and gaming. The DeFi space touched a significant milestone in April this year when it crossed $100 billion in locked value.
The growth seems more impressive when we compare the locked value in DeFi in February 2020, when DeFi’s locked value stood at a meager $1 billion. Thus, there’s enough room in the DeFi space for more than one blockchain, and Solana has surely secured its place. Also, Solana does have its own set of advantages over Ethereum. Many third-party applications are building DApps on Solana because of cost-effective and faster transactions.
There is no doubt there. After all, Solana supports 60,000 transactions per second. On the other hand, Ethereum’s capacity is limited to 18 transactions per second, and Binance Smart Chai’s capacity is 300 transactions per second. Ethereum’s congestion issue is causing frustration among both DeFi users and projects. Its problems were exacerbated because of the explosive growth of NFTs, which added to the woes of Ethereum users and projects. The second reason behind Ethereum’s congested network is the crypto world’s increasing interest in memecoins.
There are no such problems with the Solana network as unlike Ethereum, Solana is using the Proof-of-Stake mechanism. The Proof-of-Stake mechanism makes transactions on the Solana network cheaper and faster, whereas, in recent times, Ethereum’s network congestion has made users shell out hundreds of dollars in gas fees. No doubt that that will change once Ethereum 2.0 is finally complete, but it is still some months away from being fully implemented.
Ethereum is moving away from Proof-of-Work and adopting the Proof-of-Stake mechanism with Ethereum 2.0 upgrade, which is already in progress. With Ethereum 2.0 fully implemented, Ethereum transactions will become better, faster, and cheaper, which will aid Ethereum to retain its position in the blockchain space.
Solana is going all out to carve a market share for itself in the fast-growing crypto space, especially in the NFT & DeFi domain. It has been making it easier for developers to create some of the best DApps available in the crypto space since 2017, its founding year. Metaplex is the recent project of Solana that launched this week. It is dubbed as “Shopify for NFTs,” using which the Grammy awardee musicians can create an NFT store of their own.