Solana Down 22% in December, Can Solaxy Help It Realize Its Full Potential?

Ever since the crypto industry gained momentum, Bitcoin ($BTC) and Ethereum ($ETH) are the two names that have been dominating the market. No one ever managed to come close. But the tables turned in 2022. For the first time ever, Solana ($SOL) has managed to beat both in multiple areas.

$SOL experienced an all-time low in 2022 with the collapse of FTX. Since then its value grew by 2,000%. As per a Glassnode report, in the 727 days since the FTX collapse, $SOL outperformed both $BTC and $ETH on 344 days.

Similarly, in that timeframe, $SOL has witnessed more capital inflow than both $BTC and $ETH.

One of the biggest reasons behind this sudden growth is the increase in meme coin activity on the Solana blockchain.

$SOL powers all these meme coin transactions. This means that demand for Solana-based meme coins pushes demand for $SOL, which took its value to an all-time high of $263 earlier this year.

But $SOL Is Down 22% So Far. What Does This Mean?

Despite outperforming both $BTC and $ETH, $SOL’s price has been on a consistent decline since early December. Today alone its price went down by 3.6%.

One of the biggest reasons for that are the limitations of the Solana mainnet. It wasn’t ready to handle the sudden surge in traffic, which led to congestion and slower transactions.

This is where Solaxy comes in – a new layer-2 scaling solution for Solana that addresses all the problems of the main network.

Simply put, it aims to offload part of the transactions from Solana to reduce network congestion. Investors will also enjoy lower trading fees thanks to faster processing.