Why Is Solana’s Price Increasing?

Why Is Solana's Price Increasing?

Solana's price has witnessed a significant surge today, registering an impressive increase of over 10% in the past 24 hours. As of May 2nd, it has climbed to $136.60, marking a 15% rise from its weekly low of $118.90 recorded the previous day. This recovery follows a period of sharp declines fueled by concerns over reduced interest rate cuts by the Federal Reserve.

Factors Driving Solana's Rise

Jito Labs' Liquid Staking Solution:

Jito Labs, a company specializing in Solana infrastructure, has recently developed a restaking solution akin to EigenLayer's service in the Ethereum ecosystem. Restaking involves validators staking their existing Proof of Stake (PoS) assets across multiple layers without requiring additional tokens, thereby enhancing security and service offerings.

Increased DeFi Activity:

Following the announcement of Jito's restaking solution, the total value locked (TVL) in its liquid staking smart contracts has witnessed a notable surge, rising from 9.92 million SOL on May 1st to approximately 10.5 million SOL on May 2nd. During the same period, Solana's overall TVL has also increased from 26.45 million to 27.21 million SOL.

Solana and Bitcoin Integration:

Coinciding with Solana's price increase is the announcement of a new inter-chain bridge service that will connect Bitcoin and Solana, with an anticipated launch in the third quarter.

Zeus Program Library (ZPL) System:

Developed by Zeus Network, the ZPL system collaborates with the Apollo bridge protocol to enable users to convert their Bitcoin into wrapped zBTC tokens. These tokens can then be utilized within the Solana ecosystem for various activities, including trading on decentralized exchanges, participating in the NFT market, and engaging in borrowing, lending, gaming, and Social Fi platforms.

The integration of Bitcoin, a widely recognized and highly adopted cryptocurrency, into Solana holds significant potential for increased transaction volume. This anticipation could drive demand for SOL, which is essential for network transaction fees, potentially explaining the positive investor response to Zeus Network's announcement.

The original article was first published on COINTURK NEWS: Why Is Solana's Price Increasing?