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

article-image

Blockworks exclusive art by Axel Rangel

share

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.  

Loading Tweet..

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. 

Loading Tweet..

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.


Get the day’s top crypto news and insights delivered to your inbox every evening. Subscribe to Blockworks’ free newsletter now.


Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

kamino cover.jpg

Research

Kamino has solidified its position as the leading money market on Solana and is emerging as a DeFi bluechip. Although DeFi competition is fierce, Kamino has kept iterating on its product to provide the best-in-class UX, paired with a robust risk management framework and battle-tested infrastructure. Given the rollout of Kamino Lend V2, the protocol may scale aggressively over the coming months, penetrating previously untapped markets in Solana DeFi.

article-image

Why that the bull market might not start until 2025

article-image

August’s annual headline figure came in at 2.3% after an upward revision Thursday, so things are moving in the right direction 

article-image

MSTR’s stock price was roughly $248 at 2 pm ET Thursday

article-image

Ever since rates came off zero and fiscal deficits exploded, markets have started paying close attention to how the government is funding itself

article-image

Solana memecoins are collectively at an all-time high

article-image

Optimistic rollups like Optimism, Arbitrum and Base are seeing rapid adoption relative to zk rollups