Solana Launches "Ignition" Feature Leading to All-Time High for SOL Token

Solana Launches "Ignition" Feature Leading to All-Time High for SOL Token

Alternative public chain project Solana has announced the launch of a key but mysterious feature called "Ignition" this week. Following its successful appeal to investors' profit instincts, native token SOL has surged once again, breaking the $100 mark for the first time in history and hitting a high of $114.43 in the early hours.

As of the time of writing, Solana (SOL) is priced at $113.05, up 14.7% in the past 24 hours, and its market value has expanded to $33 billion, surpassing stablecoin USDC and Polkadot (DOT), ranking eighth among cryptocurrencies.

"Ignition" Speculation

Although Solana has not fully explained what "Ignition" is, judging from the "lighter" in the video and the literal interpretation of "Ignition," the market speculates that it may be a "SOL token destruction mechanism," which has become a catalyst for the surge in SOL coin prices.

SOL Token Functionality

As a public chain project, Solana mainly relies on its native token SOL to complete two main tasks: mortgage and transaction fees. Specifically, the protocol will consume part of the transaction fees it charges to ensure that the total supply of SOL is limited to 500 million. However, Solana also creates new tokens based on the "anti-inflation mechanism," and the amount of SOL issued will gradually decrease over time. At the same time, Solana claims that the supply of SOL will eventually stabilize within the "predetermined long-term inflation rate" range.

Event or Feature for Developers?

However, some netizens believe that if "Ignition" is a token destruction event, it should not be promoted as a special and unique event on the Solana official website. Additionally, Solana destroyed SOL tokens last year, but there was no fanfare or pre-release at the time.

In addition, the Ignition trailer has a title that says, "The sky is the limit. What are you going to launch?" and specifies that the event runs from August 31 to October 8. This indicates that "Ignition" is more likely to be an event or new feature designed for Dapp developers or NFT creators, rather than a token destruction event.

Ignition Boosts SOL Price

In the official Solana Reddit community page, traders have found that "Ignition" is a catalyst that can boost SOL. The announcement of Ignition caused SOL to soar by 17.62% on the day of the announcement, and the next day it rose by another 9.2%.

Image source: Solana

In recent weeks, institutional investors have increased their demand for SOL. Osprey Funds registered a trust called "Osprey Solana Trust" with US authorities last week, allowing investors to bet on SOL tokens.

Image source: Osprey

In addition, cryptocurrency research firm CoinShares pointed out that institutional investors injected $2.7 million into Solana products last week, and a week ago, investors invested a total of $7.1 million in Solana products and funds, surpassing other cryptocurrencies in popularity.

Image source: CoinShares