After having a tough time for the past few weeks due to its close ties with FTX, Solana is currently trading in the green territory today.
Solana’s price was on investors’ radar during the intraday trading session after it was spotted trading 2% higher at $13.89 at the time of writing. Meanwhile, the broader crypto market is in recovery mode today as the total cryptocurrency market cap is up 0.93% over the last day at $861.18 Billion. The market rebound is depicted in today’s price recovery of major cryptocurrencies like Bitcoin and Ethereum, which are up 1.40% and 0.94% at $17,136.50 and $1,283.33, respectively. Today’s positive crypto market performance cannot negate the overall bearish sentiments that seem to continue in the market due to a host of factors.
Solana reached an all-time high (ATH) on November 06, 2021, at $259.96. Solana’s price during the initial seed sale, which took place on April 05, 2018, was $0.04. The recent ATH represents approximately a whooping 6500X return on investment (ROI). Solana became one of the hottest cryptocurrencies around after its launch in 2020, appreciating nearly 30,000% in less than two years. FTX founder Sam Bankman-Fried, an ardent supporter of Solana, once called Solana the “most underrated token” earlier this year.
What is Solana?
Referred to as Ethereum Killer, Solana is an open-source, decentralized project similar to Ethereum and designed to host decentralized, scalable applications. SOL is the native token of Solana used to pay for transactions on the network.
Founded in 2017 by Anatoly Yakovenko, Solana was officially launched in March 2020 by the Geneva-based Solana Foundation. The blockchain was built by San Francisco-based Solana Labs.
The Solana protocol was designed to facilitate the creation of decentralized apps. It intends to improve scalability by using the proof-of-history (PoH) and the proof-of-stake (PoS) consensus mechanism. Solana can process almost 65k transactions per second and charges lower transaction fees compared to its rivals. SOL, which is Solana’s native cryptocurrency, is utilized to pay transaction fees and for staking.
Is Solana worth the hype?
As the world is becoming more inclined towards sustainable practices having a minimum environmental impact, Solana is considered the best eco-friendly token. Thus, SOL is a top pick for ecological enthusiasts.
Some of the features which make Solana different from other cryptocurrencies include the following:
- Solana’s rapidly growing ecosystem and versatility have made it best known as a competitor to Ethereum, the leading blockchain for decentralized applications (dApps).
- Solana has smart contract capabilities, vital for running cutting-edge applications like decentralized finance (DeFi) andnon-fungible tokens (NFTs).
- Solana operates on a brand-new consensus mechanism called Proof-of-History, which expedites the process of ordering transactions in a blockchain. Thus, the PoH mechanism makes the network incredibly fast and effective.
- Solana uses both a proof-of-history (PoH) and proof-of-stake (PoS) consensus model. PoS permits validators to confirm transactions based on the number of coins or tokens they hold; PoH allows those transactions to be quickly timestamped and verified. Solana can process far more transactions and charges lower fees than other competitive blockchains like Ethereum.
- Solana has a block time of just 0.4 seconds. This gives the Solana community the potential to become one of the best-decentralized blockchain platforms in the industry.
- Since Solona uses a cutting-edge PoH consensus mechanism along with the PoS model, it leads cryptocurrencies in terms of safety and scalability. Besides, as Solana’s user base grows, the network’s size and decentralization will make it more challenging for hackers to breach security. Thus, the blockchain is less likely to experience any downtime in the future.
Solana gained widespread popularity shortly after its launch as it offers a network for building and running decentralized finance applications, online games, and payment systems. Developers can also use the network for NFT projects. However, there is a catch here. This is because the rise in demand and collapse of the NFT market plays a vital role in Solana’s valuation collapse. For long-term investors who look at the company’s fundamentals, Solana’s fundamentals appear stronger, making the SOL token perfect for investment. As with equities, it is seen that with higher risks come higher rewards; thus, even if the turmoils and corrections continue in the market, the crypto investment, which is seen as a high-risk investment asset class, can give you high rewards. The bearish price prediction for Solana, as given by wallet investors, shows that SOL is not a buy at the moment. However, the unique features with which the token comes along with and its increased usability in other applications makes us believe that Solana has brighter prospects in the future.