Since its launch in April 2020, Solana has made headlines with its eye-popping returns and rapid ascend to the list of top 10 cryptocurrencies in the market. The price rise has been astounding.
The price of each SOL, the native token on Solana blockchain, at the ICO was priced at $0.22 and now, its value has grown to $209. An increase of whooping 1,00,000% in 18 months.
Solana is one of the top-performing cryptocurrencies for the last few months and in the last 3 months period, its value has increased by 500%. It has also earned the title of “Ethereum Killer”, which has increased investors interest around it.
Below are some of the key statistics of Solana.
Coin Rank: 6th
Market Cap (as of 26th Oct 2021): $62.6 billion
Market Dominance: 2.4%
Consensus Mechanism: Proof-of-Stake and Proof-of-History
SOL Price Analysis
On the daily charts, the overall trend is quite bullish and is indicating a continuance of the uptrend. On the Fibo scale, the 23.6% level or $172 is showing strong support and also the 50 days EMA line is a strong support line.
With a strong adoption rate of the decentralized ecosystem and increasing transaction numbers on the Solana blockchain, SOL is expected to continue moving higher.
For long term investors, buying on dips will be a good strategy to follow.
What is Solana Blockchain?
Solana is a blockchain-based smart contract platform for creating and running decentralized applications and has similar functions to what Ethereum does. But, Solana has some better technical capabilities.
Like Ethereum has its own programming language called Solidity, Solana has Rust, using which it allows developers to create and launch DApps. Solana is highly scalable and can process up to 50,000 transactions per second. Also, it has a lower transaction fee generally costing around 0.000005 SOL.
Users who are holding SOL tokens in wallets supported by Solana can use and interact with various DApps on the Solana blockchain and can also buy NFTs on the Solana marketplace.
Solana’s Coin Economics
As against the belief, Solana doesn’t have a fixed supply of SOL tokens. The current total supply of SOL tokens is 507,571,530 units and the circulating supply is 301,095,548.22 SOL, which is about 60% of the total supply.
However, you should note, there is a staking reward involved, in which stakers are rewarded with new SOL tokens. According to Solanabeach, the current inflation rate is 5.96% and the Solana Foundation aims to reduce the inflation rate to 1.5% over the long term, by reducing it by 15% each year.
Investors in Solana
Despite massive competition in the smart contract space with players like Ethereum, Cardano, Polkadot, Solana’s rise has been phenomenal.
Solana has got backing from some big VC investment firms like Andreessen Horowitz (a16Z), Polychain and popular crypto exchange FTX. This has helped small investors to believe in the potential of Solana and its growth.
Challenges for Solana
Solana has an impressive growth track record, but its future growth is dependent on how well it can attract developers once Ethereum moves to a proof-of-stake consensus mechanism. The major part of the growth has been due to higher transaction costs and lack of scalability in the Ethereum blockchain that led developers to look for other smart contract platforms.
Therefore, you have to follow the smart contract space closely to check, how things pan out once Ethereum upgrades its blockchain.
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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