What is Solana?
Solana (SOL) is an open source project that implements a high-performance, permissionless blockchain. Anatoly Yakovenko, a former Dropbox engineer, introduced Solana back in 2017, in partnership with Greg Fitzgerald and Eric Williams. The fourth generation blockchain aims to provide “the open infrastructure required for global adoption”, according to the developers behind the project.
Yakovenko intended to create a highly scalable blockchain platform, and so the Solana ecosystem makes use of an open infrastructure to offer significantly more scalability than its contemporary blockchain protocols.
How Does the Solana Ecosystem Operate?
The Solana ecosystem introduces a number of new, efficient technologies that cooperate so as to enable the Solana blockchain to facilitate greater transaction speeds and a highly secure platform. Firstly, the platform uses the Delegated-Proof-of-Stake (DPoS) consensus mechanism. DPoS blockchains are much swifter than PoS blockchains; the Solana blockchain takes averagely around 2.34 seconds to produce a new block, which is multiple times faster than most of its peers.
In most ways, a DPoS blockchain is much the same as a PoS blockchain. You can get either of two positions on the blockchain for staking the native token SOL – a validator, or a delegator. Validators are needed to process the transactions made on the chain. The people who hold more native coins on the network have higher chances of getting the post of a validator, so the people who are truly invested in the network are prioritized. The validators earn rewards in the form of yet more native tokens once they validate transactions and add more blocks on the chain.
However, becoming a validator requires you to stake a sizable amount of Solana crypto, which not many can afford. So you have the choice to become a delegator instead, by delegating the SOL you hold to a validator of your choice. A perk of being a delegator is that you get to decide which participants on the network are most fitting to become validators, and lend your support to them.
Next up is the Tower BFT (Byzantine Fault Tolerance) system used by the Solana ecosystem, which is essentially an upgraded rendition of the PBFT (Practical Byzantine Fault Tolerance) system employed by other DPoS blockchains. The Tower BFT system serves to better the network responsiveness by letting Solana Validators vote on the state of the ledger. Plus, it also keeps records of the previous votes, so validators can just refer to their previous votes instead of running the entire transaction chain, which speeds up the validation process.
The Solana ecosystem also utilizes the Proof of History (POH) mechanism. What this system does is apply timestamps to every transaction approval. These timestamps in turn allow the nodes on the network to find out the right sequence of events. So the POH protocol essentially plays the role of a cryptographic clock on the Solana blockchain.
The Gulf Stream mechanism further increases the Solana blockchain’s speed by getting rid of the mempool. Now, on a regular blockchain, a mempool is where transactions gather before a node selects them to be validated and put into a new block. But Gulf Stream allows the network to send new transactions to validators even before all the transactions on the current block are approved.
The Sealevel system is used by the Solana blockchain to develop smart contracts that can run parallely, and are capable of using the same protocols. This way, thousands of smart contracts can run at the same time without bringing down the Solana blockchain’s speed.
Aside from the aforementioned systems, there’s also Pipelining, a transaction processing unit that acts to minimize the block validation times, Turbine, a blockchain broadcasting protocol that breaks data into smaller bits which can be sent to nodes more easily and using less bandwidth, Archivers – storage mechanisms that give validators quick access to transaction histories on the network and other information, and Cloudbreak, the Solana ecosystem’s account database that enables the system to read and record information simultaneously.
What Advantages Does the Solana Ecosystem Bring over Other Blockchain Platforms?
Firstly, Solana does away with the scalability issues most existing blockchain platforms suffer from. For example, the Ethereum platform is congested and bogged down because of the numerous DeFi projects building within the ecosystem. However, the Solana blockchain uses the tools at its disposal to have the network’s transaction throughput be proportional to its bandwidth.
As per the tests conducted in March, 2020, Solana proved to be capable of 56,000 TPS (transactions per second). This gives Solana a solid advantage over other popular blockchain platforms, like Bitcoin (can handle around 7 TPS) and Ethereum (around 15 TPS).
Furthermore, the Solana ecosystem has made great progress towards achieving interoperability; it’s already connected to the Ethereum ecosystem through the Wormhole bridge. Wormhole allows users to trade between Ethereum and Solana, and converts ERC-20 tokens into Solana’s own SPL standard.
dApp (decentralized application) developers can also download the Solana software code from the Solana Lab’s Github, which makes it simpler to start building within the Solana ecosystem. Plus, dApps on the Solana blockchain are developed using Rust, one of the most used programming languages today, which solves issues regarding the safety of memory and thread concurrency.
Is the Solana Crypto Worth Investing In?
The Solana crypto, or SOL, is the native token of the Solana network. By staking the coin, nodes on the Solana blockchain can hold the positions of either a validator or a delegator. The Solana crypto also allows users to earn passive rewards through the delegated staking options the Solana network offers. There are already over 268 million SOL coins in circulation.
As of the beginning of April, 2021, the price of Solana is over $25, with a market cap of about $6.7 billion. According to Solana price predictions 2021, the value of the coin is supposed to further increase in the upcoming months. Moreover, the Solana price predictions also suggest that the crypto might just be priced at over $46 as it enters 2022.
All considering, it’s quite safe to say that the Solana crypto is a profitable investment at the moment.
What Are Some Projects Integrated With the Solana Ecosystem?
Many major players within the crypto industry right now are joining hands with the Solana ecosystem, largely because of its scalability solutions and its interoperability. Let’s take a look at some of the biggest projects on the Solana blockchain right now:
Serum is a high-speed, non-custodial decentralized exchange (DEX) built on top of the Solana blockchain by FTX and Alameda Research. However, unlike a regular DEX, Serum is a fully-scalable decentralized matching engine which is capable of powering a whole ecosystem of interconnected exchanges. The native token of the platform is SRM.
Serum aims to ‘decentralize the entire DeFi stack’, so that nothing remains centralized. To maximize access to the platform, Serum is intended to support cross-chain asset swaps, decentralized stablecoins, decentralized oracles, and non-custodial wrapped BTC, BCH, BSV, LTC, ZEC, ETH, and ERC-20s. Serum is often found in our top altcoin lists. You can trade Serum on Binance, Upbit, OKEx, CoinTiger, and HBTC.
2021 YTD Price Performance: $1.06 – $6.66 (up 528.3%)
Raydium is an AMM (automated market maker) and liquidity provider built within the Solana ecosystem for Serum. Raydium provides on-chain liquidity to a central limit order book, and the liquidity providers on Raydium get access to the entire order flow and liquidity of Serum.
Raydium plays the role of a bridge for projects looking to collaborate with the Solana ecosystem and the Serum DEX. Raydium and its native RAY token will be essential in enabling further development with partners of the platform itself and the Solana ecosystem as a whole. Top exchanges for trading Raydium are HBTC, FTX, Gate.io, Uniswap (V2), and MXC.COM.
2021 YTD Price Performance: $6.6 – $10.52 (up 59.4%)
Recently featured in our top cryptocurrencies for 2021 list, Audius has grown to become one of the most well-known apps within the crypto community; it’s a music streaming platform that puts all the power into the hands of musicians. Audius enables free streaming for users using blockchain tech. The native coin on Audius is AUDIO.
On October 29th, 2020 Audius announced its decision to integrate with the Solana ecosystem and scale community-owned music streaming. As the users on the platform have increased in number, the gas fees and load times have hiked too, and Audius thinks the Solana blockchain can provide the speed, low fees, and censorship resistance Audius requires. Audius can be currently traded on platforms like Binance, FTX, BiONE, HitBTC, and CoinBene.
2021 YTD Price Performance: $0.16 – $3.09 (up 1831.25%)
Another entrant in our top crypto for 2021 list, The Graph is the indexing and querying protocol for the decentralized web. The Graph allows developers to create open APIs, or Application Programming Interfaces, known as subgraphs. The Graph currently supports indexing data from a number of networks, including Ethereum, IPFS, and now, Solana.
The Graph’s indexing of Layer 1 blockchains allows developers to have access to multi-chain information without maintaining their own indexers. With subgraphs, dApps on Solana can act on cross-chain events, and seek out accurate historic chain data.
The Graph’s incentivization mechanism is based on its native token, GRT. You can trade The Graph on : Binance, Huobi Global, OKEx, CoinTiger, and HBTC.
2021 YTD Price Performance: $0.36 – $1.76 (up 389%)
Oxygen.org is a DeFi Prime Brokerage Protocol that can aid investors in generating liquidity, earning yield, borrowing assets to go short, and getting trading leverage against their portfolio of assets. The native token of the platform is called OXY. Oxygen can be currently traded on FTX, Gate.io, Uniswap (V2), AscendEX (Bitmax), and Sushiswap.
2021 YTD Price Performance: $3.02 – $2.93 (down 3%)
Frontier is a chain-agnostic DeFi aggregation layer that has integrated with the Solana blockchain recently. Frontier users can make use of its services in protocol tracking and management, staking, best-rate asset swapping, liquidity provision, CDP creation & monitoring, and more, while integrated to Solana (and several other chains).
The native token of the platform is called FRONT. Top exchanges for trading Frontier are Binance, Huobi Global, OKEx, FTX, and VCC Exchange.
2021 YTD Price Performance: $0.3 – $2.73 (up 810%)
The developers behind Bonfida intend the platform to become ‘the single source of truth in the cryptocurrency industry’. Bonfida covers several categories, including exchange statistics, crypto company reviews and scoring, in-depth analysis on crypto trends, and notable occurrences. Aside from that, the platform is also going to handle an array of data aggregation and visualisation, useful for those crypto traders who can’t break down this data by themselves. Bonfida can be currently traded on the platforms like FTX, Bilaxy, AscendEX (Bitmax), and Serum DEX.
The native crypto of the platform is called FIDA.
2021 YTD Price Performance: $0.4 – $2.05 (up 412.5%)
Maps is an offline mapping service. It’s useful for turn-by-turn routing, travel guides, detailed mapping, and a lot more, with the added perk that none of it requires costly mobile data. Recently, with Maps.me 2.0, Maps has started embedding DeFi services into its app. The MAPS token plays a central role in the Maps ecosystem, connecting over 100 million users. Top exchanges for trading Maps.me are FTX, CoinBene, Bithumb, Gate.io, and Uniswap (V2).
2021 YTD Price Performance: $0.56 – $1.34 (up 139.29%)
The KIN crypto is virtual money used within a digital ecosystem of apps, services, developers, and millions of users. It’s designed to be an platform that enables commerce between developers, content creators and consumers using micro-transactions. You can trade KIN on FTX, HitBTC, Gate.io, Fatbtc, and Bithumb Global.
2021 YTD Price Performance: $0.00006 – $0.00051 (up 750%)
Ramp DeFi intends to make decentralized lending and yield farming available to non ERC-20 token holders. The protocol gives users the opportunity to draw liquidity from staked assets.
Ramp enables SOL users to gain additional liquidity without giving up their mortgage rewards or capital appreciation potential. Using the Ramp smart contract, users on Solana can mortgage SOL and exchange it for the local stable currency solUSD. Next, they can turn the solUSD into the stable currency rUSD on the Ethereum network. Top exchanges for trading RAMP are Binance, Gate.io, Uniswap (V2), Hoo, and MXC.COM.
The native token of the platform is RAMP.
2021 YTD Price Performance: $0.04 – $0.61 (up 1425%)
We hope our blog post on the Solana ecosystem has helped you grasp a good idea of how the network operates! For more posts on cryptocurrencies or trading advice, don’t forget to visit our website!
Hitesh Malviya is the Founder of ItsBlockchain. He is one of the most early adopters of blockchain & cryptocurrency enthusiast in India. After being into space for a few years, he started IBC in 2016 to help other early adopters learn about the technology.
Before IBC, Hitesh has founded 4 companies in the cyber security & IT space.
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