Fed Decision, Galaxy Fund, and Celebrities Push SOL to Recovery After Network Freeze
Solana has had a wild week with the network freezing up on the backs of a popular IDO and announcements from Galaxy Digital and a Fed Decision
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key takeaways
- Solana is beginning the Thursday trading day up 12%, recovering from prior losses inflicted by a network freeze after it couldn’t handle the demand from a popular IDO
- Solana led the overall digital assets market in gains after the Fed announced it would begin tapering, and, Galaxy Digital
SOL is set to begin the Thursday trading day up almost 12.5% as two key and unrelated announcements turned the Solana network’s fortune around after it suffered a series of failures on the back of a popular Initial Dex Offering (IDO) that was based on its network.
Earlier this week, the launch of the anticipated SolChicks Play-to-Earn NFT project ground the Solana network and the Raydium DEX — based on Solana — to a virtual halt due to network congestion.
Data from various Solana block explorers shows that the number of transactions per second over the Solana network fell to about 700 down from an average of around 2000 and full capacity of about 65,000. At one point, SolanaBeach, a Block Explorer, showed that upwards of 50% of transactions were failing.
For his part, Anatoly Yakovenko, Solana Labs CEO, chalked this up to growing pains and suggested that this was another case of congestion which frequently happens during aggressive trading events or successful IDO launches.
Despite all this, institutional interest in Solana remains strong, which is likely driving up the price of SOL.
On Wednesday, Galaxy Digital announced that it was launching an institutional-focused investment fund, Galaxy Solana Funds, which tracks the performance of the Bloomberg Galaxy Solana Index.
Generally, most large-cap cryptos opened higher on Thursday after the Fed announced late Wednesday that it plans to speed up its asset purchase tapering timeline and move towards more rate hikes in 2022 on news of record inflation.
Bitcoin has remained above $48,500 since the FOMC meeting results, according to CoinGecko, while ether and Binance’s BNB have also bounced sharply.
In addition to this macro news, SOL also appeared to react favorably to an announcement that Michael Jordan and his son Jeffrey are launching HEIR, what they call a Web3 fan engagement platform built on Solana. HEIR has already raised $10 million and is set to launch in 2022.
SOL remains almost 30% below its all-time high of $260, set on Nov. 6.
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