Solana (SOL) is a crypto coin founded in 2017. At the moment, you can buy it on exchanges like Binance, KuCoin, or OKEx. We took an opportunity from this project many times already, and we have made significant gains on it; check our past crypto trading performance here.
Solana has been the one of the talks on the lips of crypto enthusiasts after it’s recent impressive performance in the crypto space.
The value of this crypto has surpassed one hundred percent since the beginning of August 2021. As such, it is now the eight-biggest crypto currency by market cap. Solana has surpassed Cardano as the eighth-largest crypto by market capitalization. It has become the eighth-largest crypto by market capitalization, having reached an unprecedented all-time peak of $231.81 at the moment of writing.
The Basics of Solana
Nature
Solana is a rapid modifiable blockchain platform based on numerous distributed apps.
Management Team
CEO and co-founder, Anatoly Yakovenko, previously worked as a designer for semiconductor systems at Dropbox and Qualcomm before embarking on the Solana project. Two of his former colleagues at Qualcomm, Stephen Akridge and Greg Fitzgerald later joined him.
Launch Date
Solana was launched in March 2020 on the Mainnet Beta platform.
Market Capitalization
More than $29 billion (CoinMarketCap, January 27th, 2022).
Important Shareholders
Some of the important shareholders of this project include Polychain and Andreessen Horowitz.
Programmable Blockchain
Solana is among the most quickly customizable blockchain systems in the cryptocurrency industry. And it’s one of several coins being considered as possible heirs to the ETH (Ethereum) dynasty.
If you’re not sure what a programmable block chain technology is, consider the system that underpins BTC (Bitcoin): non-programmable network. It’s a massive, tamper-proof, distributed ledger that keeps track of transactions. It allows users to send funds without the use of a 3rd party such as a financial institution.
Blockchains that can be programmed are on another plane. They have the capacity for storing smart contracts, which are small programs written. When the contract’s requirements are met, they can be configured to perform specific activities. If you hired a car, for instance, the company may establish a smart contract that instantly reimburses your money once the automobile is delivered in fine shape. In the case of some severe weather circumstances, a farmer’s insurance plan may pay off.
Eth was the very first programmable blockchain, and it drew a large number of programmers who exploited it to create dApps (decentralized applications). However, it has become a casualty from its own popularity, with enormous traffic clogging the system. Its charges have also risen in price, and has a significant environmental impact. To tackle these difficulties, a substantial overhaul to Eth2 is in the pipeline, although it won’t be completely implemented until 2022.
As a consequence, a slew of fresh customizable blockchains are vying for a piece of Ethereum’s pie. They’re built from the ground up to be speedier, cheaper, and much more long-lasting. And Solana happens to be the quickest of these blockchains.
How Quick Can Solana Process Transactions?
Solana is capable of processing up to 50,000 TPS (transactions per second). In truth, the company claims that just as the network size increases, that figure might reach 700,000 transactions per second. To put it differently, Ethereum now handles 15 to 45 transactions per second.
Visa claims that their payment service handles roughly 24,000 transactions every second. This is significant because cryptos must be able to meet Visa’s efficiency if they are to contend as a means of payment.
Is Solana a Healthy Buy?
If you’re planning to purchase Solana with the hopes of another Hundred percent increase coming month, you may need to reconsider. Solana could be a smart long-term investment, but investing in the hopes of making easy money is not a smart option. Alternatively, consider the facts to see how Solana compares to other asset classes.
Because it’s so revolutionary, it’s hard to assess its prior performance. It does, however, have a competent management team and has drawn respected financiers. And the Solana ecosystem now has almost 400 initiatives. In the cryptocurrency sector, initiatives such as Audius, USDC, Chainlink, and Serum are well-known.
Another advantage is that you’ll be eligible to make your stakes generate returns if you want to buy and hold. Staking is important for the platform’s authentication and safety, and network participants can receive incentives by staking their currencies for a certain timeframe.
Investing in cryptocurrencies is a risky venture, and don’t stake greater than you can stand to lose. There is a chance for great wins, but there is also a chance for big loses. In the big scheme of things, some coins may fail totally.
Pros
Low Fees and Fast Transactions
Solana, according to cryptocurrency aficionados, is Ethereum’s main competitor. ETH presently has a transaction rate of 14 TPS, while SOL has a transaction rate of 50,000 TPS. Because gas expenses are so high, Ethereum is switching from a proof-of-work decentralized system to a proof-of-stake decentralized network. However, Solana also has the upper hand in terms of transaction rates and pricing.
Sizable Futures Contracts
Sol has a sizable futures long position, which is the most important measure in derivative instruments. Irrespective of its latest trading activity, the sum total derives the entire number of orders stored on its platform by industry players.
Smart Contracts and NFTs
Since last year, the non-fungible tokens sector has exploded. Non-fungible tokens became a high market prospect, with massive sales sponsored by renowned creative professionals. Solana rushed into the industry to provide the non-fungible tokens alternative, taking advantage of this growing market. With Solanart, the platform’s non-fungible tokens platform, Solana is gathering momentum. The system’s low fees and fast transaction speeds are two of the greatest draws for non-fungible token enthusiasts.
Solana is a Dominant Player in TVL and Derivatives
There has clearly been a tremendous level of growth in Solana’s derivatives and on-chain data marketplace. In the last six months, the platform’s TVL has climbed by almost fifteen percent. It appears that the margin between TVL, engaged consumers, and the derivatives market is rapidly decreasing.
Solana has a Governance Appeal
Solana’s market valuation is twice as high as Terra and Avalanche. The last year has shown clear indications of SOL’s rising investment community, and with increased investor acceptance comes increased institutional acceptance.
Cons
Not Sufficiently Decentralized
Some cryptocurrency aficionados claim that there aren’t many drawbacks to dealing with Solana, however this aspect of the cryptocurrency is widely regarded as its major drawback. The Ethereum platform currently has approximately 200,000 verifiers, whereas the Solana platform has only 1,000. The more verifiers there are, the more stable and reliable the system becomes.
Fewer Initiatives
Because of ETH’s first-mover edge, it has more initiatives than Solana. Solana boasts of three hundred fifty initiatives on its system, which include distributed banking, NFT initiatives, and gaming applications. Several new initiatives may prefer Solana above Ethereum since more financiers became acquainted with the cryptocurrency’s rapid processing and minimal costs.
Inflation
Cryptos grew in popularity in 2020 for a variety of factors, one of which was to utilize them as an inflation hedge. Most cryptocurrencies have a fixed limit on the number of coins that will ever circulate.
However, Solana does not have a set supply of currencies. The developers started boosting the annual availability of Solana coins by 8%, meaning that the rate of inflation will reduce by 15% till it reaches 1.5%, after which it will stop decreasing.
Unreliable Network
The investor ecosystem of Solana is still very much in its infancy. Investors are hesitant to use Solana over Ethereum because it has a shorter proven history. When Solana stated that its platform was encountering some latency, the cryptocurrencie’s credibility took a knock. Because cryptocurrency investors value trust, this flaw negatively affected Solana.
Conclusion
Solana has huge goals and aspirations, but most of them are still in the early stages of development. We won’t be able to assess how great the cryptocurrency will be until the platform puts those ideas into reality.
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