What is Solana? - How Solana grew 11,503% in 2021 (8 min read)
What is Solana?
Solana is a blockchain project, a cryptocurrency that is one of the fastest in the space and has the potential to replace Ethereum as the main platform for decentralized apps and NFTs. Two years after the release, it became the 7th cryptocurrency and skyrocketed in price by 11,503% in one year.
Strategy & Tools
- Oct 2017 – Solana crypto has been founded by Anatoly Yakovenko, a software engineer with experience in Qualcomm, Dropbox.
- Nov 2017 – Yokavenko released a white paper, describing Proof of History consensus model that allows keeping track of time between decentralized systems where the participants don’t trust each other
- Apr, 2018 – a funding round for an undisclosed amount
- Jun, 2018 – another undisclosed funding round – Pre-Seed
- Sep 26, 2018 – Seed round
- Jul 30, 2018 – raising $20M in series A round
- Mar 26, 2020 – $1.76M raised in an ICO
- Jun 9, 2021 – Solana completes funding round at $314M led by Andreeseen Horowitz. The price per token stays around $40 and goes slightly lower.
- Jul 28-31, 2021 – Lollapalooza is held. It has assisting NFT collectible assisting NFT collectibles launched on Solana. This is an effect of sponsorship.
- Aug 15 – an NFT built on Solana is sold out in… 8 minutes.
- Aug 11– 20, 2021 – the price doubles, to $80
- Sep 7, 2021 – KSI, a popular YouTuber, tweets about moving to Solana with NFTs because of Ethereum’s high transaction costs. He also sets his profile picture as Solana’s Monkey Business NFT avatar. Other celebrities do that, too – Steve Harvey, for example.
- Sep 8, 2021 – Solana reaches an all-time high price of $191. The market capitalization for the project reaches $55.1 billion! That puts it in the 7th place on CoinMarketCap, the biggest platform following cryptocurrency prices and market sizes
Where to buy Solana?
Solana has become one of the biggest and most trusted cryptocurrencies. You can buy it on most crypto exchanges including Coinbase, Binance, FTX, Kraken, and many more.
How Solana grew so fast?
There were a list of reasons why Solana grew so fast. It got on the cryptocurrencies trend pretty well, and it took advantage of that trend.
It also had a strong sponsorship from a popular musical festival, and even some influences also played an important role in the development of Solana crypto.
It had a good foundation, too, as the Solana’s creator is a software engineer with experience in the company of Qualcomm. That surely played its part.
Having a solid branding
Solana stands out not only with the product, but also with branding. Most crypto projects have a rather generic brand identity, but Solana crypto stands out with modern, Apple-like visuals. They had a great brand in their early days and further developed it with gradients along their way.
The standard for tracking crypto prices is coinmarketcap.com, but every crypto investor can see them in the exchange apps they are using, too. Whenever a token goes up significantly, it draws much attention to it.
As soon as Solana went up, more and more crypto enthusiasts joined it, further driving the price.
How Solana grew so fast? Because of sponsorships. What made the price leave the stage of stagnation? Sponsoring Lollapalooza, a popular music festival. Solana’s ad was visible on opening day, and an NFT collection of posters and videos from the festival has been launched on Solana.
That’s quite clever – the festival was probably attended mainly by millennials, who are the most interested in crypto – 49% of them claim to be using it. The pandemics allowed some of them to save money, which then they wanted to invest somewhere – hence the popularity of meme stocks and cryptocurrencies. All that means Solana crypto has been presented in front of people potentially interested in investing in it.
Solana NFT trend riding
The NFT craze is still on as Solana crypto shakes things up. Actually, that’s what also boosted its price. Degenerate Apes University, a collection of 10,000 unique NFTs with certain attributes of various rarity, has been sold out in just 8 minutes – you could buy them for 6 SOL while after none were available for minting, the floor price went instantly to 14 SOL. Solana’s trading volume skyrocketed, and the price has gone up shortly after the event.
One of the Degenerate Apes has been later sold for over $1 million, which made it the most successful NFT project on Solana. And it all started with NBA Top Shots.
The reason why the Ape NFTs could get sold so fast was the sense of community around Solana. Its members might have wanted a similar way of online flex as Ethereum enthusiasts have with Crypto Kitties and Crypto Punks which they often set as avatars on social media.
Apes are also part of the crypto community and many NFT collections used that theme, for example, Bored Apes Yacht Club (on Ethereum) which also sold out quickly.
The Solana community is vibrant and very active on Twitter, Telegram, and Discord, while the Solana team engages in community building by holding AMAs, hackathons with million-dollar prizes, and awarding Solana Collective Ambassadors.
Part of the recent success was a massive investment led by Andreessen Horowitz, which brought $314 million to the project. Although the news didn’t move the needle straight after the release, it might have had a play when more newcomers found about Solana.
The actions don’t look like they were coordinated but having KSI, Steve Harvey, and others evangelizing about Solana, has also contributed to making it go viral.
Some people joined just because other people were investing in Solana. That created viral effect which was also represented by the token price.
The first price moves weren’t easy, and it was stagnant for a long time, but as soon as the charts went up aggressively, more and more joined the bandwagon. This created a theoretically endless loop – more people join because more people join.
At the heart of Solana going viral is the father of all asset crazes – the fear of missing out. Crypto investors and community members didn’t want to pass on possibly ‘the next Ethereum’ and serious future returns. This is why they poured money into the ecosystem, which was also represented by the token price that could be the main driver of newcomers.
Crypto is hard to understand for outsiders. People look for shortcuts and social proof is a powerful one – if, in doubt of what to do, we look at others. The hype around Solana made it look like a great project to invest in or join its community.
Scarce items are valued higher. This is often why crypto enthusiasts buy into NFTs – if there are a few of them, they expect the limited supply to drive prices. And it does in many cases, but the NFT project has to be successful enough, so there are people who create demand.
Window of Opportunity
It’s hard to link the exact Solana price moves with actions taken, as it is with most types of assets. However, we know how Solana set everything up for such a success, and you can easily repeat that:
- create a great product that solves problems of known solutions, and it does it miles better
- create an extraordinary branding that will stand out in your industry
- continue with regular marketing activities consistently
- be on the lookout for trends and position your product with them
- help spread the word about you with some paid advertising or sponsoring events that gather your buyer persona
Devour your competition
with the wittiest Marketing there is!
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- cognitive biases in marketing to influence your customers minds
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