With October on the horizon, we roll along with the next instalment of Wisly’s Spotlight Series where we explore one of the most exciting cryptocurrencies on the market — Solana. With such incredible growth since its inception and amazing potential to improve, there’s no wonder why so many investors are choosing to diversify their portfolios with Solana. Read on as we discover what makes Solana so special.
What is Solana?
Solana is a highly functional platform that provides decentralised finance (DeFi) solutions through its open-source project that relies on blockchain technology’s permissionless nature. It was officially launched in March 2020 and is designed to enable the easy creation and development of decentralised apps (DApps).
Its native token is SOL and is considered a large-cap cryptocurrency with a market cap of over $43 billion. It has a circulating supply of over 297 million SOL and a unit price of $145.49 at the time of writing. Solana’s project was started in 2017 by software engineer Anatoly Yakovenko and combined his expertise with a fellow software engineer, Greg Fitzgerald, to found a project called Solana Labs — the engine room for Solana.
Solana uses innovative techniques in an effort to improve scalability and set it apart from its competitors. It does this by combining a proof-of-history (PoH) consensus with an underlying proof-of-stake (PoS) consensus of the blockchain. Solana has a long-term goal of making decentralised finance accessible on a large scale.
What makes Solana different?
Using a proof-of-history consensus, Solana aims to offer more scalability of the protocol — in turn improving its usability. It has built a fantastic reputation on the crypto scene due to its rapid processing times and reduced validation times on both smart contract and transaction execution.
Solana has publicly committed not to increase its transaction fees and taxes unnecessarily and has designed the platform to constantly offer reduced transaction costs without compromising its fast processing capabilities and guaranteed scalability offering.
Solana’s network is secured through the unique combination of PoH and PoS consensus mechanisms. The PoH is the main component of the protocol and is largely responsible for transaction processing, recording successful operations, and the elapsed time between them. The PoS consensus complements the PoH consensus by monitoring all of the PoH’s processes and validates every sequence of blocks that the PoH creates. This combination is unique to the blockchain industry and is something that many investors are attracted to.
Solana holds an advantage over its competitors as it enables the blockchain to operate efficiently regardless of the amount of activity on the network. It also makes use of Cloudbreak — a distributed log that stops transaction history from eating up computer space. Amongst crypto circles, Solana’s platform has been dubbed the fastest in the world — although other cryptocurrencies may have something to say about that.
How Solana’s blockchain survived a blackout
With Solana’s exponential growth — particularly in 2021 — many investors have described it as an ideal alternative to the big hitters, Bitcoin and Ethereum. However, those feelings were quickly erased a few weeks back when Solana experienced a blackout of epic proportions. The uncertainty was unbearable for many investors who were unable to buy or sell SOL for almost 17 hours — leaving investors in a tailspin and Solana scrambling for a solution.
All of a sudden, Solana’s mantra that “transactions will never be stopped” came back to bite them. Working hard to resolve the issue, developers on the blockchain blamed a concept called “resource exhaustion” — something that arises when a massive growth in technology leads to bandwidth constraints.
Due to its popularity, the explosion of interest in Solana led to a breakdown of the network momentarily — something developers acknowledged as nobody is really sure how popular a new cryptocurrency will be. Perhaps it can be said that Solana became a victim of its own success. On the flip side, it bears testament to Solana’s potential as an ideal altcoin, and its effortless resolution of the issue has given investors increased confidence in its abilities.
Top 3 Projects using the Solana blockchain
Due to Solana’s innovative platform, it has started to host various projects that run on the blockchain and promise fairly high returns for investors in the medium to long term. We touch on the top 3 projects that are on Solana’s radar at the moment.
SolApe is a serum-based Solana decentralised exchange (DEX) that was developed so that blockchain and crypto technology would be easily accessible. It aims to be an onboarding point for novices of the crypto domain where users can trade seamlessly.
1Sol is a cross-chain DEX aggregator that operates on decentralised protocols on Solana’s platform. It allows for users to experience seamless, efficient and secure DeFi operations. It uses cross-chain transactions to advance its growth — mainly due to the high demand for aggregators.
Atomic is a non-custodial crypto wallet that is intended to support SOL and SPL tokens that operate on Solana’s network. It offers users crypto on-ramp capabilities and innovative payment gateway features. No KYC or verification is required, and it employs solid encryption processes.
Solana is a well-established cryptocurrency that has enjoyed amazing growth and is packed with potential — the perfect ingredients for investors who want to diversify their portfolios in the hope of a rewarding future. By quickly navigating over their recent blackout hurdle and showing fantastic market recovery, Solana has displayed a resilience that only the finest cryptocurrencies possess. The future certainly looks bright for Solana!
It is important to note that investing in Solana is a risky and highly speculative proposition. This article does not provide recommendations, advice or guidance regarding Solana investments but is rather our opinion on such activities. Investors must conduct their own research and engage in the services of qualified professionals before making any financial and/or cryptocurrency investment decisions. We do, however, recommend established platforms like Wisly to monitor and analyse your Solana and cryptocurrency investments.