Solana (SOL) prices rose on Monday equally traders speculated on what appeared to be a key simply mysterious feature launch scheduled for later this week.

The SOL/USD substitution rate climbed to a new record loftier of $103.06 post-obit a 9.35% intraday rally. The upside move surfaced days after Solana introduced "Ignition" on its official media handles. However, the squad provided footling details nigh the tool only prompted the community to gauge that it would be well-nigh burning SOL tokens.

The speculation surfaced majorly because of Solana's Ignition teaser video, which featured a imperial flamed lighter.

Ignition might not exist a SOL token burning issue

Equally a public blockchain, Solana relies on SOL to help 2 primary tasks: staking and transaction fees. The protocol burns a portion of the transaction fees it collects to go on the SOL supply limited confronting its 500,000,000 SOL issuance.

Nonetheless, Solana also creates new tokens based on a "dis-inflationary inflation schedule," wherein the SOL issuance rate decreases periodically later on starting at its highest value. Meanwhile, Solana claims that the supply volition eventually stabilize at a "predetermined long-term aggrandizement rate."

But if "Ignition" is a token burn consequence, it should not deserve a defended landing folio on the official Solana website. That is primarily because of the protocol'south previous SOL burning events that did not encounter specialized teasers from the Solana team.

Moreover, the Ignition teaser comes with a explanation that reads, "The sky's the limit. What will you lot launch?" with a period of Aug. 31–Oct. 8, underlining that it could exist more an event for decentralized awarding developers or nonfungible tokens (NFT) creators and less a token burning episode.

Snapshot from Solana'south official Reddit customs page concerning Ignition. Source: Reddit

Simply overall, traders announced to have constitute Ignition as a goad to keep their SOL bids higher. On the day of the announcement, which was on Fri, the SOL/USD exchange charge per unit jumped 17.62%. The next day, the pair climbed another ix.ii%.

Nevertheless, the rally slowed down on Sunday merely ahead of hitting the $100 marker, falling over 1.5%. But it resumed the upside, heading into the new week, claiming $100 every bit top digital avails, including Bitcoin (BTC) and Ether (ETH), dropped.

SOL/USD daily chart. Source: TradingView

SOL later dropped back below $100 on profit-taking sentiment.

Overvaluation risks persist

Solana prices earlier started rallying in the wake of an overall crypto rebound subsequently Bitcoin bottomed out below $30,000 on July 20. Later, SOL/USD picked additional upside momentum on a flurry of optimistic fundamentals, including digital asset director Osprey Fund's conclusion to launch a Solana-dedicated fund for institutional investors.

Related: Solana hits tape high with SOL toll up over 218% in six weeks — What's behind the rally?

Last calendar week, real-time information feeder Pyth Network announced going live on Solana's proof-of-stake blockchain via its cross-chain communication tool, dubbed Wormhole.

And before that, Solana besides forayed successfully in the NFT sector mid-August with the launch of Degenerate Apes, which sold out ten,000 pictures of comic apes in just eight minutes and raked in 96,000 SOL in volumes (over $v.9 one thousand thousand at that fourth dimension).

On the flip side, Solana's 369% price boom from its July 20 low of $21.96 has turned SOL excessively overvalued, as per its current relative force index reading (near 81). That amounted to a short-term correction in the sessions alee.

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