Solana Blockchain Review: Will SOL Become A Profitable Investment?
Mike Harry
Jan 2024
6 min to read
Fact checked
Introduction: Solana is a high-performance blockchain designed to enable fast and secure value exchange for financial services, gaming, digital media and enterprise applications. Founded in 2017 by Anatoly Yakovenko and Greg Fitzgerald, Solana has established itself as one of the most innovative blockchain protocols in the industry. But how will it weather the bear market and will it be able to recapture previous all time highs?
eToro USA LLC: Investments are subject to market risk. Including the possible loss of principal.
What is Solana?
Solana is an open-source blockchain protocol that enables unprecedented scalability and performance for decentralized applications written in Rust.
Solana's design goals include achieving high throughput, low latency and high security for the development of smart contracts.
Solana Website
Solana has a host of features that make it an attractive platform for developers.
The Solana architecture enables high performance at high transaction loads by combining proof-of-stake consensus with a custom-built distributed clock in Proof-Of-History.
The blockchain utilizes the Sealevel protocol which can process tens of thousands of contracts in parallel, using as many cores as are available to the Validator.
Solana's features include:
Block Finality Time: 5-12 seconds
Low transaction fees: $0.00025
Transactions Per Second (TPS): 4K (Actual) to 60K (Theoretical)
Validator Nodes: 1835
Efficient Storage: Zero-copy storage system
Solana (SOL) Token & Tokenomics
Solana (SOL) is the native cryptocurrency on the Solana blockchain and is used to pay for network fees and reward miners to secure the network.
Additionally, it can be used to participate in decentralized finance (DeFi) protocols such as stablecoin lending and prediction markets.
There are two mechanisms for distributing SOL tokens: inflation and token burning.
Roughly 6.3% of the total supply is issued each year as a reward for validators and stakers who secure the Solana network.
The remaining tokens are burned in order to reduce the circulating supply of SOL tokens and maintain their value.
SOL Tokenomics:
Outstanding Supply: 363 million tokens
Maximum Supply: 534 million tokens
Current SOL Price: $13.6
Current SOL Fully Diluted Marketcap: $7.3 billion
Is Solana a good investment?
While nobody can predict the future, Solana has developed a hardware and sticky developer community that may have what it takes to stick around through a prolonged bear market.
Solana Ecosystem
Solana in our opinion represents one of the most credible monolithic scaling solutions on the market. While Solana has had multiple outages this year, the core team has made improvements each time.
We think the core engineering talent is in place to actually solve this incredibly difficult scaling challenge. Long story short, we like Solana at a fully diluted market cap of $7 billion.
This is not to say that the price can’t go lower during the bear market, but the team does have a massive vision and the engineering chops to pull it off.
Assuming they do pull it off, we think that the market cap of SOL could reach 100s of billions once more.
Here are some variables to keep an eye on when evaluating the progress of an investment:
How is the core development team improving Solana?
Are investments in the ecosystem increasing?
Solana Price prediction
The SOL tokens have taken a big hit as of late both due to the bear market and the downfall of FTX the exchange.
The future price of Solana is going to rely on its ability to keep attracting developers and dApps to the Solana ecosystem.
At the time of writing, the SOL token is down over 90% year to date from the all-time high of $258 to $13.5.
How to buy Solana (SOL)?
The easiest way to buy Solana (SOL) is through regulated cryptocurrency exchanges like Kraken and eToro. Both exchanges are FinCEN regulated, safe and very easy to use.
eToro USA LLC: Investments are subject to market risk. Including the possible loss of principal.
Author
Mike Harry
Mike is a passionate crypto enthusiast who bought his first Bitcoin in 2016. With a natural curiosity and a love for learning and tinkering, Mike is always trying out new DeFi applications. Mike excels at breaking down difficult concepts into easy-to-read guides for beginners.
