Solana or the fastest blockchain in the world, as its main page says, isn’t something entirely new. Every platform tries to bring in fresh solutions or tweak the whole system one way or another. Solana is a blockchain that supports smart contracts and DApps. Solana uses a proof of stake consensus mechanism and timestamped transactions that maximize efficiency. Compared to Ethereum it’s three things: smaller fees, an internal clock, a higher number of transactions.
Mostly right now it presents the same thing we look for in any other new project — potential. At this time, Solana has around 400 projects (according to their stats), which is a respectable number though it doesn’t yet come close to what Ethereum has to offer.
As a native token, $SOL is skyrocketing along with its parent blockchain.
At this time, Solana, just like any other chain more flexible and fast than Ethereum that has surpassed the $5b+ barrier, is starting to attract more and more investors.
In August, Solana grew approx 276.5%, and its market capitalization has reached $41.2 billion.
It’s the 7th largest cryptocurrency right now.
The investors see the same thing users do, which is not just what Solana can offer or how it might differ from what everyone in the market is used to. But how fast it grows.
To be fair, Solana certainly offers solutions to several issues like, for example, Ether scaling, which is well-known to anyone who’s had experience with the blockchain. Thus hypothetically, a product that solves this issue has the potential to play a pivotal role in the DApp market.
If we’re talking Sol’s potential, then indeed a project like that could potentially surpass the Ether cap, and provide serious growth from the entry point. Many alternatives won’t give that, and the $5b+ barrier I’ve mentioned before here is not just an accidental number.
In a way, it’s risk hedging: entering a project, any crypto project, at an early stage can be quite dangerous and unreliable.
But the positive qualities aren’t what makes Solana bigger. The aggressive marketing strategy the project is presenting right now brings in positive results. In this case, it’s the demand for the assets. We have seen that before with Polygon, and then Avalanche. It’s highly likely that we will see the same story repeating itself with xDai.
By all accounts, Solana presents itself as a decentralized platform, but in reality, there is enough contradictory data.
For instance, a lot of users and experts note that the requirements for running nodes are extremely high. To successfully perform said action, one practically needs a data center or at least a residential ISP with 128 GB RAM and a CPU worth at least $1000.
To quote the co-creator of Ethereum Gawin Wood, “If you can’t run a full-node yourself then it’s just another bank.”
To underline this point, we should acknowledge the fact that 90% of the tokens were distributed in advance, so only 10% stays in rotation. This means that the exchange rate is for the most part or even fully controlled by the token creators.
If you think about it, SOL is most profitable to the users who own 100k $SOL and more, since the fees for voting are quite high. And with low transaction fees, the demand for $SOL as an asset could be lowering as well.
There is one more thing that doesn’t fully align with claims of a secure and stable platform: Solana implies in its marketing strategy, that the transactions will never be stopped. Yet there have been incidents during one of which, the network was down for 17 hours.
Of course, it’s hard to be sure, whether these are accidental mishaps or a thought-out strategy.
Solana’s main attraction is truly the project’s marketing. Well executed, and well presented, this project reminds the rest of us just how relevant it is to implement the most efficient and innovative advertising strategies. Everyone is talking about it, so everyone wants in on it.
Other than that, you don’t really need to understand what Solana is or how it can improve the overall experience. Dogecoin has been using a similar strategy, where growth heavily depends on the endorsement. When you get support from a famous influencer like Elon Musk in Doge’s case, the project skyrockets. This can really work for any token or blockchain, regardless of its true value.
Solana has the possibility to join the Top 5 CMC coins. The objective value might be around $500-$1000, and that’s a year + goal. But a successful campaign can potentially change even that.