Lark Davis Explains Contributing Factors To Solana’s (SOL) Rally
According to a prominent cryptocurrency analyst and trader, Lark Davis, there are fundamental factors that are feeding the incredible up run of the smart contracts platform Solana (SOL).
Davis shares in a recent video with his 427,000 YouTube subscribers that the altcoin is soaring because developers are actually building on its blockchain.
“Builders are actually showing up… You got to have stuff built on your blockchain. Otherwise, you’re a ghost town. Solana is definitely not a ghost town. We have loads of applications built on Solana [that] you can actually go out [and] use right now, today…
For example, you have Port Finance (PORT). That’s one of Aave’s competitors that we’re seeing come up on Solana. We have Mercurial Finance. That’s like Ethereum’s Curve Finance. It’s a stablecoin-swapping protocol. We have Radium (RAY), which is like Uniswap (UNI).”
The second contributing factor to SOL’s performance, according to the analyst, is the rise of non-fungible tokens (NFTs).
“NFT has been a massive trend recently. Solana’s got a lot of NFTs, too. That’s been part of what has been driving the demand: to get the main Solana asset, the SOL token, because people want to go and buy NFTs on Solana, which are priced in Solana.”
Solana raised $314 million funding round in June 2021, to finance its DeFi ecosystem. They also have backing from FTX. Having the funding available is definitely an enabling factor, Davis points out.
“Part of the reason we’re seeing so many developers committing to the SOL ecosystem right now – they’re getting money. They’re getting grants. They’re getting a lot of investments…
So it’s $314 million, plus the backing of FTX, which having a cryptocurrency exchange that big, that’s like [having] more money than God.”
Solana has also appeared on the radar of large financial institutions, which have started to take interest in it.
“Institutional money is starting to take a interest in Solana. Osprey, they announced a Solana fund two weeks ago. They are far from the only big-money players piling into Solana right now.”
The trader considers the total value locked (TVL) in Solana’s ecosystem, which has exploded to over $5 billion, as an important factor.
According to Davis’ prediction Solana’s TVL will continue to grow as market participants seek to provide liquidity and generate yields without paying hundreds of dollars worth of transaction fees.
