If you followed the crypto market last year you’ve probably heard of Solana. This is the crypto that grew above 14,000% from the beginning of 2021 to November of the same year. If you’re hearing about it just now, this number sure sounds like a reason why you should learn more about Solana. Solana is currently trading below its last year’s highs, but experts predict crypto will recover. Let’s see if Solana should be on your radar for the following months.
What Is Solana?
Solana is a blockchain platform that supports smart contracts. The smart contracts on the platform power decentralized applications like DeFi projects, NFT marketplaces, Web3 apps, and decentralized exchanges. It’s also possible to create tokens on the Solana blockchain, both fungible and non-fungible. Solana also has its own native cryptocurrency called SOL. For the purpose of the article, we’ll be using Solana and SOL interchangeably.
In 2018 Anatoly Yakovenko and Greg Fitzheld founded the Solana Labs company. Two years later, the token SOL was launched by the Solana Foundation. Solana raised $25 million in an ICO, which started in 2017.
The token started trading for less than a dollar and it took some time before it picked up speed. The summer of 2021 was when SOL doubled from around $30. The reason for this was the launch of popular NFTs on the SOL platform. Later in the same year, the token took advantage of the second bull run of 2021 and reached $260.06 in November. These impressive price movements brought investors’ attention to the crypto.
How Does Solana Work?
One of the things that make Solana unique is the “proof-of-history” (PoH) mechanism that it uses along with proof-of-stake.
As you know, Proof-of-work (PoW), introduced by Bitcoin, is the most famous consensus mechanism – a way to delegate and reward the verification of transactions when creating a crypto. Later, another mechanism, the proof-of-stake (PoS), started gaining popularity as people became concerned about how the energy consumption of proof-of-work affects the environment.
The mechanism that Solana founders introduced aims to be better than both PoW and PoS. Proof-of-history is created to maintain the network decentralization (what PoS is not good at) and establish a trustful source of time. With the mechanism you don’t have to just trust the timestamp of the transaction, you can prove that the transaction occurred sometime before and after the event.
In simple words – proof-of-history can provide a way to verify the passage of time between two events, using cryptography. By introducing this innovative mechanism, Solana crypto’s creators made the processing times the blockchain offers very short. The combination of PoH and PoS also has decreased the validation times for transactions and smart contract execution. The protocol also has low transaction costs.
All of those upgrades to the known mechanisms, have made this a very interesting new project. The technology that SOL brought to the crypto stage, along with its impressive price runs, turned the attention to the platform and its crypto.
A Look at the Past and Future Solana Price
To help you understand better how the crypto has performed so far and what are the expectations of its future price movements, let’s revise its price history and forecasts.
Solana Price History
One of the first recorded trading prices after the coin’s launch was in April 2020. The token was trading for under a dollar, at $0.9511. In August SOL reached $4, the highest price of the year. After some fluctuations, the cryptocurrency ended 2020 with a price of $1.51 and started the next year similarly. In 2021 the Solana price started rising, reaching $10 in February and jumping to $40 in April. The whole crypto market turned bearish in May and this affected this crypto’s price, bringing it around the $20-$30 price range.
The first big milestone was in August 2021 when SOL reached $110 and made early investors incredibly happy. The asset doubled this price in October and by November 6th, the token had reached its current all-time high price of $260.06. This brought the cryptocurrency into the top 10 by market capitalization, where it’s currently standing. The SOL crypto wasn’t spared from the bear sentiment that started at the end of 2021 and continues to affect the whole market. From the closing price of $170 on the last day of December 2021, the cryptocurrency has gone down almost three times in price in May 2022.
Solana Price Predictions
Despite the months of market volatility, investors and experts remain hopeful that the market will reverse soon, SOL included. Nobody can forecast the future of cryptocurrency because price history isn’t a guarantee for future performance. However, to help you get an idea of what cryptocurrency price prediction sites think the SOL price will be in the coming months and years, we’ve gathered the highest and lowest prices, according to sites like DigitalCoinPrice, The Economy Forecast Agency, Coin Price Forecast, and Walletinvestor. This is not financial advice, only an informative look at the possible SOL prices.
Price Prediction for 2022
Price Prediction for 2023
Price Prediction for 2025
Price Prediction for 2027
Price Prediction for 2030
What to Look Forward to With Solana
Solana seems like a platform and cryptocurrency with future potential. Here are some reasons why you should keep an eye on it in the upcoming days.
The reason for the first big price milestone of this coin was embracing the NFT project Degenerate Ape Academy. Solanart is the name of the NFT marketplace of the platform, where you can now find many popular non-fungible token collections. With the rising popularity of NFTs, this blockchain seems to be on the right path by embracing them. If the platform continues to be active and collectors choose to use it as a place to acquire NFTs, this popularity will affect the SOL token as well, possibly influencing its price in a positive manner.
Projects on the Network
The number of different projects built on the network is exceeding 300 today and continues to grow. The projects include different DeFi applications, meaning this is a great place for investors looking for a decentralized crypto environment to check out.
Transaction Speed Improvements
This coin could be classified as one of the faster cryptocurrencies today when it comes to transactions. It can process more than 50,000 transactions per second. But not only that, the transactions cost less than $0.01. Things get better as its developers aim to upgrade it and make the transaction per second count reach 700,000. If the creators keep their promise, investors can look forward to one of the fastest cryptocurrencies becoming even faster in the future.
While this coin offers many new advantages, it hasn’t been spared from issues in the past. The first big issue was faced on September 14th, 2021. Then, the network was offline for 17 hours. The developers announced that the network underwent a denial-of-service (DoS) attack. This type of attack is meant to shut down a network while making it inaccessible to its users. The DoS attack was caused by bots generating transactions that flooded the network, causing memory overflow which resulted in the shutdown of the network. While no funds were lost and the network was fully functioning in under 24 hours, this shook the investors’ trust.
The cryptocurrency managed to recover from this outage and even reached its all-time high two months later. However, in 2022 the platform has already had several outages with different durations. Like the first one in 2021, the network announced that NFT minting bots are causing these issues. So far SOL has managed to get back after every hit, but the reoccurring issue can make investors wary of the platform and its token.
With its advantages and disadvantages, Solana has secured its place in the crypto market and even created some rivals. Several cryptocurrencies compete with it in the same field for transaction speed, smart contracts, and network projects.
Solana is one of the most popular so-called “Ethereum-killers”. This means the token aims to be one of the biggest competitors of the second-largest cryptocurrency. The two coins compete in the number of transactions per second (30 for Ethereum and over 50,000 for Solana), NFT marketplaces, transaction costs, and creation mechanism. SOL seems to be able to rival well with ETH, but Ethereum is an older and more established cryptocurrency. It also seems more secure to investors which can be an advantage on its side.
Another competitor of the asset is the cryptocurrency Cardano (ADA). Famous for its more sustainable proof-of-stake mechanism, Cardano competes with Solana in how many decentralized apps and DeFi platforms they can support. But SOL combines the proof-of-stake with its proof-of-history mechanism and evolves its DeFi ecosystem seemingly faster than Cardano, even if ADA was created first and has a larger market capitalization.
Avalanche (AVAX) is another cryptocurrency that can compete with Solana in terms of scaling and the speed of growth of their ecosystems. Both cryptos are growing fast in the DeFi, NFT, and games sectors. The projects offer different features but both aim at securing decentralization. Solana is more popular than Avalanche but AVAX hasn’t had any the network issues yet so it may seem like a safer bet to some investors.
Just like SOL, Polygon (MATIC) aims to improve transactions in the cryptocurrency space. Solana’s transaction costs win between the two but Polygon isn’t left behind when it comes to the speed. Polygon seems to be better in the play-to-earn games field while SOL is better for NFT collectors and as an ecosystem as a whole.
Bitgert (BRISE) is a newer project that claims to be the fastest and cheapest blockchain so it also competes with SOL in this field. The Bitgert gas fees are considerably lower, compared to many other platforms, and its team aims create more projects by the end of the year. What this competitor promises sounds very tempting so it’s worth looking forward to see if it’ll be fulfilled or remain a goal only. Until this time comes, Solana remains a blockchain with proven worth.
SOL – What to Expect in the Future?
Solana is a cryptocurrency with an innovative consensus mechanism that offers fast and cheap transactions and serves as a platform for many decentralized projects. The native token has performed well in the past and the blockchain seems to be a fast-developing space. Although its network has had issues that have shaken the trust in, it remains a project that may interest investors in the future and bring new gains.