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Solana announces $450 million raise to beat Ethereum

Photo of: Joseph Stone
by Joseph Stone

Solana, the blockchain that wants to dethrone Ethereum, plans to raise between $300 million and $450 million. Enough to push up the SOL price?

There is no shortage of blockchain projects planning to challenge Ethereum’s dominance. Cardano is positioning itself in this niche. Solana is another very serious rival to Ethereum. But capital resources are needed to achieve this.

According to Decrypt, Solana is on its way to achieving this by acquiring several hundred million dollars in new capital. According to anonymous sources, the project is currently raising between $300 million and $450 million.

Initially, Solana planned to conduct a smaller fundraising round last March. However, due to high demand, the company decided to expand the scope of its operation.

The blockchain already has a strong supporter in Sam Bankman-Fried, the creator of DEX FTX. In 2020, the company was actually launching a new exchange, Serum, on the Solana blockchain. “I am excited and impressed to see the recent growth of Solana’s business. They have had cutting-edge technology for some time,” the executive praises.

Is Solana on its way to assembling the necessary resources to counter Ethereum’s dominance? When asked by our colleagues, the company did not wish to make any comment. However, it does not deny the information relating to a significant fundraising.

Solana, even with several hundred million dollars at its disposal, will have its work cut out to compete with Ethereum. Despite criticism of fee inflation and recurring congestion, its market share remains unchanged.

Solana’s main argument is that it offers greater scalability at a lower cost than Ethereum. Thus, the blockchain claims up to 50,000 transactions per second, against 15 on its competitor.

But other applications can meet these challenges, such as Polygon’s Layer-2 solution for Ethereum. The project is currently experiencing strong interest. The version 2 of Aave is based on Polygon.

But Solana also has its strengths. And the interest in its technology is benefiting the price of SOL, its native token. At the beginning of January, it was trading at about $2. On June 7, the price was up a little over 7% to $43.60.