– And why it may be more valuable than Ethereum
Solana Crypto is a new blockchain protocol that promises to increase performance and scalability. It’s not just another cryptocurrency — it’s the next generation of blockchain technology, with an innovative design and the potential for enormous growth!
Solana is a blockchain project dedicated to overcoming the trilemma. It aims to create a scalable network that is faster than even VISA’s current capabilities.
Solana was built by developers Anatoly Yakovenko and Greg Fitzgerald at San Francisco-based Solana Labs in February 2018.
The Solana network rivals Ethereum, the most well-known decentralized apps platform, in terms of speed and low transaction costs. It’s a PoS (proof of stake) blockchain, which consumes less power than PoW (proof of work) networks like Bitcoin. Its currency is called Solana and has the ticker SOL.
What’s wrong with Ethereum?
Ethereum has long suffered from costly transactions, which at times may reach hundreds or thousands of dollars due to network congestion.
Solana has a more significant theoretical throughput, which means it can handle more transactions per second than Ethereum, resulting in meager fees of 0.000005 SOL, or about $0.001 at this writing.
In practice, after you’ve created a wallet that can store SOL and Solana-based tokens like Phantom Sollet, you may use the various apps available. On a decentralized exchange like Raydium, you can trade one token for another, or you may purchase an NFT on the Solanart market.
Whether it’s farming or trying your hand at staking, whatever you do on Solana will cost the small fee mentioned above, which appears to be quite reasonable compared to Ethereum.
How is Solana different than Ethereum?
On the Solana blockchain, transactions are processed significantly quicker than on Ethereum. One of the significant drawbacks of Ethereum is its expensive gas fees. Users pay up to $50 or more in transaction fees on the Ethereum network.
The cost of moving cryptocurrencies in volume on the Ethereum network is much higher. To transfer $100,000 USDT from Bitfinex to OKEX, for example, cost them $23.7 million. The fees are far lower with Solana and in the cents instead of in dollars.
Solana, through its proof-of-history (PoH) mechanism, is changing how blockchains are designed. Because validators do not have to put in processing power before checking various timestamps, the transaction verification process is sped up because the nodes don’t have to do so.
Solana Network can use smart contracts to build on top of the system and connect existing systems. As a result, their platform will allow for faster transactions on Solana’s network. The Solana network processes up to 60,000 transactions every second.
The transaction speed of the network, according to the developers, can be 700,000 TPS or higher as the network expands. This is far better than Ethereum’s current 15–45 TPS rate.
How does Solana work?
Solana is one of the most rapidly programmable blockchains in crypto at the moment.
If you’re unfamiliar with a non-programmable blockchain, let’s start with Bitcoin (BTC) — a non-programmable blockchain.
It’s a massive, tamper-proof, decentralized ledger that keeps track of transactions. It allows individuals to transfer money without the need of a third party such as a bank.
Programmable blockchains are on another level.
Smart contracts are pieces of code that may hold tiny parts of code (smart contracts). These can be programmed to perform specific activities when the contract’s conditions are met.
For example, if you hire a car, the dealership may create a smart contract to return your deposit when the vehicle is returned in good condition. Or, if there’s an extreme drop in temperature or rainfall on a specific date, an insurance policy might pay out.
Ethereum was the first programmable blockchain, and it drew a slew of developers who created decentralized applications (dApps) with it.
It has, however, become overwhelmed by its popularity; the network is clogged due to high traffic.
Its costs have also risen significantly, and it has a significant carbon footprint. A substantial upgrade to Eth2 is planned to address these concerns but will not be fully implemented until 2022.
Several new programmable blockchains are competing to take market share away from Ethereum. They’re intended to be faster, less costly, and more sustainable right out of the box. And Solana is the quickest of them all.
Solana uses a combination of proof-of-stake (PoS) and proof-of-history (PoH) consensus algorithms to increase performance and scalability.
As a result, it’s one of the quickest blockchains to compete with other sectors outside of the DeFi sector.
What kinds of applications run on Solana?
Solana is one of the most advanced blockchain platforms on the market, and it was built with decentralized apps in mind.
Solana’s long-term objective is to overcome the blockchain trilemma, which claims that a decentralized network can only fulfill two of the three essential properties of decentralization, security, and scalability.
Numerous developers have flocked to Solana’s blockchain because of its quickness and low cost. The project has inspired a large number of dApps and smart contract initiatives. As a result, it is one of the most widely used blockchains and cryptocurrencies on the globe.
The most popular Solana applications as of August 2021 include DEXs and lending solutions. The crypto app ecosystem on Solana supports trillions of dollars worth of assets.
Some of the apps currently running on Solana are:
Part of their vision as DeFi power users for Step is best-in-class portfolio metrics, automated investment vaults, aggregation across multiple swap pools, and easier access into and out of many yield farms. Step will be the central location to manage your portfolio on Solana.
Built on top of the Solana Blockchain, Raydium is an Automated Market Maker. It acts as an integral part of carrying out fast transactions on Solana Blockchain.
Apart from the liquidity that it has in its Swap pools, Raydium has access to Serum’s order book that making it unique from other Automated Market Makers in the ecosystem.
With the help of its distinct features and capabilities, the team’s primary goal is to attract large numbers of DeFi lovers to the Solana Blockchain. Keeping in mind, Raydium offers a list of products to its users that make their crypto journey more fun and easy.
The Pyth network just went live on the main net a few weeks ago, and it provides a high-performance data feed to all apps running on Solana Blockchain. The network’s speed of information is crucial.
Given the Solana consensus mechanism’s rapid validation procedure, the oracle must be able to meet the demands of the network. Pyth’s price feed, for example, is updated every 400 milliseconds, whereas other Ethereum-based oracles provide updates every ten to fifteen seconds.
Serum is a non-custodial DEX (Decentralized Exchange) system that allows you to trade cryptocurrencies.
This software is based on Solana, enabling it to provide similar cost-effectiveness and transaction speed as the original. It’s the only permissionless DEX with a solely on-chain engine and order book.
Gravity is a Solana project that allows blockchains to communicate outside the cryptocurrency world. It’s a blockchain-agnostic, open-source oracle system that permits sidechains and cross-chain communication without leaving behind a single unified structure.
It has teamed up with several notable projects, such as Binance, Union, Ankr, Curve, Band Protocol, etc.
Kreechures is the first RPG (Role Playing Game) from Solana, which permits you to gather non-fungible tokens (NFT’s).
The Solana blockchain is used to store the NFTs, and it’s a lot of fun to collect, trade, and sell tokens. The characters in this game are known as Kreechures, and you can earn them by playing combat, training, and other activities that the game offers.
CropperFinance is the world’s first permissionless yield farming platform built on Solana. It enables project creators to offer yield farming in a few clicks using the SPL (Solana Program Library) framework.
The main goal of CropperFinance is to allow SPL project developers to start yield farming, select the weekly output, establish a supply allocation system, and link liquidity to the platform.
It’s designed to assist users with reliable and secure liquidity trading, staking, mining, and other activities. The fee is paid using CRP tokens, which are native to the network.
Solanas competitors are Polkadot, Cardano, Algorand, Hedera Hashgraph, Fantom, and Harmony.
However, all of these coins have various capabilities, and none have been truly tested in a real environment. Solana is the only project with its blockchain out right now- this automatically places Solana in a prominent position in the market.
Where Can You Buy Solana (SOL)?
The price of SOL is breaking all-time highs, and it has now among crypto’s top ten.
According to the Solana Foundation, a total of 489 million SOL tokens will be made available in circulation. At the moment, about 260 million have already entered the market.
Solana can be purchased on many exchanges, including Coinbase, Binance, OKEx, Huobi Pro, HitBTC, BitMart, Gate.io, CEX.IO, and Kraken.
The new platform will almost certainly compete with Bitcoin and Ethereum.
With Ethereum’s outrageous gas prices and Eth 2.0 still not fully implemented, Solana shows a lot of promise, has a burgeoning app ecosystem and has continued support from FTX and some of the most prominent venture capitalists in the space.
It’s far from catching up with Ethereum, but it’s well-positioned to take a big piece of the decentralized apps industry. Anyone interested in decentralized apps and the blockchain should at the very least check out Solana.
(This article is not intended to be investment advice but only an explanation of the coin. Please do your research before making any investments).