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

Solana (SOL) has continued to recover steadily after falling over 95% in 2022, owing in part to its link with Sam Bankman-Fried and his failed enterprises, FTX and Alameda Research.

Solana’s price increases by 100% in the first quarter of 2023.

Solana’s price increased by 104% in the first quarter of 2023, hitting roughly $20.60 per SOL. This rate of increase outpaced all other top 25 cryptocurrencies, including Bitcoin BTC ($27,946) and Ether ETH ($1,849).

Solana’s price performance in January 2023 outperformed all previous months since August 2021. The SOL/USD pair increased by nearly 140% without any substantial fundamental events that could have caused the rate increase. The SOL/USD pair was oversold in December 2022, causing traders to buy the drop and drive up the price.

The rally also matched with Messari’s appraisal of the Solana ecosystem in the aftermath of FTX’s demise. According to the analysis, Solana’s staking and decentralization remained stable and even improved, contributing to its strong position post-FTX catastrophe.

Solana has also maintained his strong form in April. Despite a minor setback in the first week of April, TradingView charts reveal that it is nothing more than a correction. And many feel that the 10th largest cryptocurrency by market capitalization, according to CoinmarketCap, is poised for another strong month in April.

Solana Introduces a Cost-Reduction Strategy for On-Chain Storage

Solana revealed a novel solution last week to dramatically reduce the costs associated with on-chain storage. The “state compression” method assures a significant reduction in the cost of producing 1 million non-fungible tokens (NFTs) on the Solana network to around $110.

Twitter users lauded this state compression method, calling it a “game changer” and a way to “make Solana a much more viable option for enterprise use cases.”According to Solana’s technical lead, the state compression method is built on Merkle trees and is capable of compressing the verifiability of a data tree into a “hash” or “fingerprint” of the present state.

This compression-friendly data structure enables developers to store small quantities of data on-chain and directly update it on Solana’s ledger, lowering data storage costs while retaining the security and decentralization of Solana’s base layer. The tech head also mentioned that with this solution, Solana will become a more viable option for enterprise use cases.

The state compression solution was co-created by Solana Labs and Metaplex, with assistance from Phantom and Solflare, and is powered by RPC node providers such as Helius, Triton, and SimpleHash. Several Solana ecosystem projects, including Dialect, Crossmint, Helium, and Wordcel, have already used state compression to produce a variety of applications, including NFT minting, company loyalty program integrations, and user experience advancements.

It will be interesting to see how Solana moves this week, since it will be crucial in determining the overall trend for the second quarter of 2023. SOL is currently trading at $20.03, down more than 5% in the last week.

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