A Solana ($SOL) whale has, according to transaction data from the cryptocurrency’s blockchain, deposited $10.2 million worth of the smart contract platform’s native currency to Coinbase, a leading US-based cryptocurrency exchange.
In total, the Solana whale moved 537,352 tokens to the trading platform, in a transaction that came after Solana’s price rose over 16% in a 24-hour period, amid a wider cryptocurrency market recovery spurred by investors’ relief, after the Federal Insurance Deposit Corporation (FDIC) revealed it was making depositors of Silicon Valley Bank (SVB) whole.
Leading stablecoins including DAI and USDC had lost their peg to the U.S. dollar after it was revealed $3. Billion of USDC’s reserves were in SVB. DAI, it’s worth noting, is partly backed by USDC.
While it is uncertain whether the whale intends to sell the coins immediately, the large inflow to Coinbase could lead to a visible bearish effect on the asset’s value if the intention is to sell. Coinbase, however, also allows users to stake Solana and earn rewards while keeping the funds on the platform.
Solana’s price has kept on rising since the transactions were made, suggesting that even if the whale sold the funds, buying pressure has outweighed any potential selling pressure created from the sale of the funds.
Earlier this month, a cluster of massive Solana whale wallets has transferred over $60 million worth of $SOL to the Nasdaq-listed cryptocurrency exchange in a series of transactions that suggests the funds were moved by a single entity.
Solana is a blockchain network founded by former engineers from Qualcomm, Intel, and Dropbox that employs a delegated Proof-of-Stake (dPoS) consensus algorithm to achieve high performance. The network implements a distinctive approach to ordering transactions that substantially enhances its speed and throughput.
Historically, blockchain networks have faced challenges in scalability, and the few that have overcome them have encountered centralization issues. However, the creation of Solana in 2017 addressed the difficulty of developing a decentralized network with short confirmation times and low transaction fees.
A report by Coinbase Institutional has stated that despite challenges including network outages and market downturns, Solana remains a strong competitor in the layer-1 blockchain space.
The report highlights Solana’s focus on native scalability, its unique timestamping function, and its high throughput, with the ability to process up to 65,000 transactions per second. Solana’s low-cost fee structure and technical capabilities are also noted as advantages.
The report suggests that Solana’s technical advantages combined with its products and services that cannot be executed on other blockchains may help it reassert itself as a genuine layer-1 competitor.
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