Solana: a bit of history
In the immense crypto landscape, Solana is one of the most shining and growing projects.
In fact, this blockchain is equipped with several peculiarities that make it very interesting; we will discover them shortly.
Currently, Solana is one of the leading players in our niche, the cryptocurrency world. In the years to come, it is to be expected that this chain will go on to become a major player in several areas, from gaming to payment systems, thanks mainly to its scalability and speed.
The idea for Solana came to life in late 2017 thanks to Anatoly Yakovenko, a programmer in the telecommunications field, employed by Qualcomm and with work experience also at Dropbox and Mesosphere.
It was this professional background that led to the great insight: the conception of the Proof-of-History consensus algorithm.
Yakovenko knew well how synchronism is essential in a network; in this way, every movement becomes efficient and speed benefits disproportionately.
Looking closely at the major players at the time, such as Bitcoin and Ethereum, Yakovenko pointed out how the lack of synchronicity resulted in slow transactions, as well as limiting the number of transactions to a few per second.
Cryptocurrencies have always been seen as the future of payment systems. How could this be done if the chains could process so few transactions at once? How to apply blockchain to, for example, Visa, whose peaks reach 65,000 transactions per second? Finally, how to still ensure high standards of security and decentralization?
The answer, though still without its current name, was one: Solana.
Yakovenko began working on the idea, trying to refine it more and more. He was joined by other minds from similar backgrounds, first and foremost his longtime friends Greg Fitzgerald and Stephen Akridge.
As early as February 2018, the first prototype was operational. Within a short time, Yakovenko and partners founded a company called Loom.
Later, abetted by the arrival of a project on Ethereum called Loom Network, the name changed, taking that of the location where the three friends spent a few years riding the ocean waves in the surf: Solana beach. Before long, the revolutionary chain became a reality.
Index
What is Solana?
Let’s start with two questions: what makes Solana so special? Why was the team’s telecommunications background so crucial?
Bitcoin’s blockchain works according to the Proof-of-Work algorithm, which is what the mining process involves. Each transaction requires a certain number of verifications to be validated, so that a malicious party cannot falsify the data to their advantage.
This process requires very powerful computers to solve complex mathematical problems. Originally, mining was for everyone; today, however, there are specialized centers that deal with it (so-called farms).
The energy expenditure is enormous and also creates complications in terms of environmental impact. Security is high. At the expense, however, are speed and scalability: since Proof-of-Work is a complex procedure, the chain is slow and not very scalable. The system is therefore not very efficient.
To remedy these limitations, Yakovenko found a way to apply TDMA to the blockchain, an illustration of which we see borrowed from Wikipedia.
Time-Division Multiple Access is a method of operation in the telecommunications world that allows numerous actors to use the same frequency. Trying to make it as simple as possible:
- the different antennas in the network are synchronized
- each user is assigned a time slot
- each operation is completed
- at the end, each is put in the right place, respecting the correct order
TDMA applied to the blockchain offers these advantages:
- Decentralization: the validator nodes are numerous and operate on the same chain. An “internal clock” keeps them all synchronized with each other, ensuring correct operations.
- Speed: since there are so many nodes, transactions do not have to follow a rigid path, gaining so much in speed. We’re talking tens of thousands of transactions per minute!
- Scalability: again because of this system, the chain can grow and offer high scalability.
- Security: synchronization makes high security standards possible.
Solana is a blockchain that takes advantage of what we have just seen and works using the Proof-of-Stake with delegation algorithm, as well as the TDMA-based Proof-of-History.
This system makes it possible for “anyone” to become a validator. In fact, while there are still high stakes on hardware and internet connection speed, no minimum amount of Solana in stakes is required.
Other blockchains use Delegated Proof-of-stake: effectively the same, it does, however, place very high minimum stakes amounts of the native cryptocurrency to be validators. This system thus makes the environment decidedly centralized.
As of today, August 2024, there are 3400 validator nodes in Solana: a high number, especially considering the extreme speed per transaction. Note that the figure has grown by a large margin in recent years, more than doubling.
In addition, Proof-of-Stake algorithms are fundamentally more performant than Proof-of-work algorithms. In the case of Solana, the gap becomes even greater.
The ability to grow and adapt to needs makes this chain among the most scalable on the scene. The refined consensus mechanism makes Solana one of the safest environments in which to operate in the cryptocurrency world.
Finally, an important note: the transaction cost is negligible!
Solana: coin SOL
Solana’s protagonist is its SOL coin. Let’s examine its use cases and value.
First, every transaction is paid for in SOL. Since this is a widely used and growing chain, demand for this coin goes hand in hand.
SOL is also delegated at validators to make the environment more stable and secure. Staking the coin provides decent returns, especially using platforms such as Marinade Finance.
The maximum supply is infinite, but at the time of writing (August 2024) it is about 466 million.
Growth in recent years has been exponential: from 4 cents in April 2018, the coin reached $258 in November 2021…lucky early investors!
After the bear market of 2022, it suffered a significant price decline, also aided by the FTX/Alameda case, counted among the major investors.
Nevertheless, development continues undaunted, and 2023 was under the banner of recovery. 2024 continues and we shall see what it has to offer.
All this makes SOL one of the cryptocurrencies worth keeping an eye on and following.
How much is Solana coin worth?
Below is the real-time SOL/USDT chart, offered as always by TradingView:
Solana's strengths
Solana has several strengths that can be translated into these three concepts: security, scalability and decentralization. What are the best possible applications?
In all honesty, there is no ideal environment for Solana: in fact, its many merits make it suitable for very different areas.
However, the world of payments is perhaps the field where this chain could make the most of its potential:
- Speed would ensure a huge volume of transactions per second;
- Scalability would ensure the feasibility of expansions as it becomes more widespread;
- Security would have everyone’s back, from businesses to end users.
Yes, Solana would probably perform best in this very area. Think of a credit card leveraging its blockchain in place of traditional circuits (or perhaps integrating so as to offer more security and speed). However, it does not stop there. Solana is also one of the most gaming-friendly environments.
Over the years, games that offer microtransactions have grown by leaps and bounds. It is now common to find free high-quality titles in which the developer company earns profits from the sale of items, transportation, weapons, characters, and additional levels. Some illustrious names? Fortnite, Rocket League, World of Tanks.
Solana lends itself well to this reality, also taking advantage of the ability to move not only coins but also NFTs.
Very interesting projects are in development, including the big promise Star Atlas: an open world game set in space, created using the Unreal Engine graphics engine and leveraging the Solana blockchain. Although far from release, this title already has a decidedly large and growing fan community…one to keep an eye on!
The applications of this chain are not finished: it also lends itself well to NFT buying and selling and trading. In the next section we will see a few projects to focus on.
Solana is already a mainstay in the crypto world. However, it still seems to be in its infancy: the potential is enormous and seems to suggest an absolutely star-studded future. Here is the link to the official website Solana.com to delve even deeper into the project.
"Solana is a limitless chain and lends itself to numerous applications"
The most interesting projects on chain Solana
Let’s look together at some platforms and projects to focus on. Solana offers an environment rich in opportunities. Some of them are of absolute quality and it would be a shame not to take advantage of them.
We have already talked about Star Atlas: let’s save it for the future, especially if you are into gaming.
Raydium is a very interesting DeFi protocol where you can annuitize your cryptocurrencies with ease. In addition, the abundant liquidity and attentive team guarantee high security. Also on this platform there is also the opportunity to buy and sell NFT: the choice is rich and for all tastes!
Staying in the world of digital art, worth mentioning are Solanart and Solsea. These are widely used Non Fungible Tokens marketplaces that are likely to see user numbers grow in the future.
Serum represents a key element of the Solana world. It is a DEX that integrates an order book that can be used by other DeFi platforms in the chain: in this way, Serum’s liquidity becomes available to the protocol that uses it and vice versa. By doing so, the user benefits from better prices when buying and selling and superior stability.
Marinade Finance is the DeFi protocol that proposes a more efficient stake. No more locked-in funds: Marinade issues a synthetic token for each SOL staked, so that a multilevel strategy can be adopted and yield-amplifying.
Then what about Saber, Orca, Larix, Port and Atrix? Very good DeFi projects, safe and used by many users, even if the numbers dropped precipitously for all of DeFi in the bear market of 2022.
Saber is a pillar of the Solana ecosystem and is entirely dedicated to synthetic tokens: from Bitcoin to ETH, you really do find everything. What is unique about this protocol is that it offers liquidity pools between tokens anchored to the same asset, such as cSOL-cmSOL. By doing so, the risk of impermanent loss is eliminated.
Orca is Solana’s user-friendly DEX: simple to use, it offers attractive instruments and annuities.
Larix is a metaverse-based DeFi protocol, the first of its kind in this ecosystem. Capital is managed more efficiently and risk minimized.
Finally Port Finance, a well-known decentralized money maker on this blockchain. If users need to borrow coins (or provide them) here they will find what they are looking for.
Those just mentioned are just a few of the excellent offerings in the Solana ecosystem. New protocols are seeing the light of day all the time: some interesting, others less so, but nonetheless a testament to a growing interest in this chain.
Solana: the ultimate blockchain?
Solana is a blockchain that has much to offer in numerous areas.
It remedies critical Proof-of-Work and centralized Delegated Proof-of-Stake issues.
Moreover, it is an open source project: anyone can view its code, study it and work on forks. Transparency is something fundamental, especially when our money is involved. These aspects make Solana one of the best around.
Is this then the ultimate choice? We cannot say: the users will decide that.
Opponents are certainly not standing idly by. For example, Ethereum, switched to the Proof-of-Stake algorithm, improving speed and lowering gas fees. However, Solana has its own characteristics and was not born as an Ethereum-killer: coexistence is possible.
Therefore, Solana can continue its fantastic journey without worrying about other players: the development achieved is such that it leaves some room for peace of mind.
The growing adoption of blockchain and cryptocurrencies will do the rest: if all goes as we think it will, the best projects will see a huge increase in users and collaborations with large corporations and companies.
Solana will certainly be one of the key players in this process of change: being part of it will definitely be exciting!
