Solana, one of the fastest blockchains in the world today with high throughputs, is currently a top 10 cryptocurrency.
The future of mass blockchain-based solutions is considered to be heavily dependent on progress made in decentralized applications (DApps). DeFi (Decentralized Finance) projects are in the rage right now with a massive rise in networks that support this wave. Ethereum is currently the leader in this space. Today, we track the performance of one of its biggest challengers – Solana blockchain, with over 400 projects covering DeFi, Non-fungible tokens (NFTs) and more.
Characteristics of Solana & Fundamentals
Solana is a decentralized blockchain-based computing platform that uses SOL (its native token) to pay for transactions. It is similar to Ethereum with a different technical base programming language called Rust, which developers can use to build applications.
One of the prominent features of Solana is its scalability with the ability to process over 50,000 transactions per second (TPS), compared to 30 TPS in Ethereum. It achieves such speeds with a combination of consensus algorithms – Proof of Stake and Proof of History.
SOL, Solana’s native token, is used for paying transaction fees and staking to support the network. It is also used to perform micropayments known as lamports.
SOL, has a total supply of 506 million with about 60 per cent already in circulation. SOL currently ranks in the top 10 cryptocurrencies with a price of $150 per token, with more than $45 billion market capitalization.
Solana’s DeFi based projects crossed the $4 billion mark last month, reaching another milestone. Ethereum is the leader in this space with more than $130 billion in assets in DeFi.
Short term technical analysis
SOL started 2021 with a price range of around $1.5 per token and thus has nearly achieved a spectacular 100x in the last 10 months. Post its all-time-high of $215 in early September, SOL declined in price on account of profit-taking and is currently in a consolidation phase.
Source: TradingView, Binance
The coin has formed a bull flag on the daily charts. A further consolidation to the $140 level is likely before another upwards run. Last month’s dip has also been on the back of decreasing volumes (indicated by a downward arrow on chart above) suggesting that a reversal in fortunes is imminent. Should SOL break out, it will need to wrestle with $159 as resistance, followed by $170 – where it has made multiple daily closes.
On the downside, it is likely to find $140 as support, followed by $128 – another key daily level.
Solana has become increasingly popular in recent months due to its extensive scalability and mining efficiency, leading many to believe it to be the future leader of the DeFi landscape. NFTs on SOL are also becoming popular for the same reason. However as Ethereum 2.0 comes through and fixes its problems with respect to speed and scalability, we expect Ethereum to wrestle back the momentum. Given that multiple DeFi ecosystems can sustainably co-exist in the future, we expect Solana blockchain to have its own set of fans. SOL, its native token, will benefit further as this fan base grows.
Disclaimer: This article was authored by Giottus Cryptocurrency Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.