In the current state of the crypto-currency market, several altcoins have gained prominence among investors. One of these is SOL, from the Solana blockchain, which has seen a considerable rise compared to bitcoin.
Below we take a look at the main features of the Solana platform. We will also look at the new features that are thought to be behind the recent surge in the price of its national currency.
This article provides enough information for new investors, interested in adding Solana to their portfolio, to make their first decisions with more confidence.
Origin and history of the Solana blockchain
The idea for the Solana platform was initially conceived by Anatoly Yakovenko in 2017. The motivation behind this creation was to solve the scalability problems that exist on the Bitcoin and Ethereum networks. Anatoly teamed up with Eric Williams and Greg Fitzgerald to consolidate the project, which has already attracted several major investors.
The official launch of the Solana blockchain took place in March 2020, through the Solana Foundation, based in Geneva, Switzerland.
In 2021, the platform launched a fundraising round, which was due to close in March. However, due to public demand, the cycle has been maintained. The current target is between $300 million and $450 million.
The main objective is for these funds to be used to transform Solana into a platform that competes directly with Ethereum by offering a superior and more efficient environment for the development of decentralised applications (dApps). Solana currently has more than 150 dApps projects. These include Serum, a decentralised DEX broker.
Properties and operation of the network
Solana is a blockchain with a web-scale computing concept. The concept is based on an x86 hardware and software architecture, which has the advantage of being highly scalable and easy to maintain. The network currently has a blocking time of 400ms and a value of 50,000 TPS (transactions per second).
The architecture allows the transaction rate to scale in proportion to the bandwidth, while retaining the security and decentralisation properties of the blockchain. The system can handle up to 710,000 TPSs on a standard Gigabit network, and 28.4 million TPSs on a 40 Gigabit network.
The consensus mechanism used is an innovation: instead of the traditional PoW (Proof of Work) of Bitcoin and Ethereum, Solana uses a combination of PoH (Proof of History) and PoS (Proof of Participation).
The Proof of History system was invented by Anatoly Yakovenko. It creates records that prove that a certain event took place at a given time. The Proof of Participation system is responsible for monitoring PoH processes, validating each sequence of blocks. It also keeps track of the order of events and the network’s unified time.
High scalability and operational speed are achieved through the use of a series of protocols and the PoH algorithm, which is a high-frequency verifiable delay function (VDF). Each transaction or event is verified by the function through a specific number of sequential steps, receiving a hash with a unique counter. The hash acts as a cryptographic timestamp, allowing public verification of the date on which the event occurred.
Recent updates
Following the implementation of smart contracts and resources for the development of DeFi, Solana launched a marketplace for NFTs on 2 June this year. Called Marketplace Metaplex, it allows artists and independent users to generate NFTs and hold auctions, at prices more affordable than those on the Ethereum network.
At the end of April, Solana’s first NFT game project was released: Star Atlas, an MMORPG-style space exploration game. This long-awaited project aims to boost the spread of NFTs on the platform.
On 3 June, the Solana Foundation announced its latest project. This is the Solverse accelerator, a partnership with 21 development experts in the blockchain sector. Solverse aims to strengthen the network and add resources and services to support high-potential projects on Solana.
There are also DeFI projects, such as Kin, that are considering migrating to the Solana network. This project started on Ethereum, but Solana’s promises of scalability were more attractive compared to the speed of development of Ethereum 2.0.
The SOL crypto-currency
SOL is the native crypto-currency of the Solana blockchain. The token can circulate between network nodes following the execution of programs on the blockchain or an output validation. The number of SOLs in circulation is 260 million, and the coin issuance limit has been set at 489 million.
Its price is influenced by recent developments on the network: it started the year at 2 dollars, and traded as high as 43 dollars last week, according to CoinMarketCap. This is the highest price since 19 May, when it fell from 56 to 35 dollars in a single day.
The recent appreciation has been considerable given bitcoin’s stagnation. Last week alone, the currency rose by 48%. It is seen as one of the most promising cryptocurrencies between now and 2030. In the market capitalisation rankings, the SOL crypto-currency is in 13th place with $10 billion in market value.
The SOL token can be traded on the main brokers. The highest trading volume of SOL/USDT takes place on broker Binance, with OKEx coming in second.
Conclusion
The SOL crypto-currency is undoubtedly a highly interesting asset, but one whose investment involves risks, like any asset, especially in the crypto-currency market.
Some in the community have dubbed Solana the ‘Ethereum killer’. This is due to the high level of investment made to transform the platform into the main rival for the development of dApps and DeFi ecosystems. These investments have paid off, which is reflected in the rise in SUN’s share price. However, its market capitalisation still represents only 16.7% of ETH’s total capitalisation.
In addition, other projects have already been described as ‘Ethereum killers’. However, none has managed to overtake the leader in dApps. The Solana Foundation itself considers this nickname to be an exaggeration. It’s important to consider all these variables very carefully before betting all your chips on a single altcoin on the market.
