Solana is a programmable blockchain platform that supports smart contracts which power DeFi projects, NFT marketplaces, Web3 apps, and decentralized exchanges. You can create cryptocurrencies and non-fungible tokens on Solana and the blockchain also has its own cryptocurrency called SOL.
In 2021 the price of the native asset of the blockchain grew more than 14,000% and attracted huge attention to itself. The bear market that started at the end of 2021 didn’t spare the coin. But both the platform and its cryptocurrency still remain with very promising fundamentals. That’s why in this article we’ll take a more detailed look at Solana and SOL, using both names interchangeably, to see how it started and where it’s heading.
Anatoly Yakovenko and Greg Fitzheld founded the Solana Labs company in 2018. In 2020 the Solana Foundation launched the token SOL, funded by an ICO that generated $25 million.
When the cryptocurrency was introduced to the market, it traded below a dollar for a while. In the summer of 2021 SOL doubled in price, reaching over $60, due to the adoption of NFTs on its platform. Later in the year, the token was positively influenced by the overall bullish market and reached its big milestone of $260 in November. The impressive growth that the crypto experienced in a little over a year brought the attention of investors and raised their expectations.
How Does Solana Work?
Before explaining how Solana works, let’s revise quickly what a consensus mechanism is. This is the process of delegating and rewarding the verifications of transactions when mining a cryptocurrency. The first and most popular consensus mechanism was naturally introduced by Bicoin, the first crypto. It’s called Proof-of-Work (or PoW) and it’s now become outdated as technology progresses, leading to the emergence of new alternatives. Proof-of-Stake (PoS) was created as a better option, inspired by the concerns that PoW requires a huge amount of electricity and it affects the environment badly.
What makes Solana unique is the introduction of the technology called Proof-of-History (PoH). While SOL combines both this new consensus mechanism and PoS, the introduction of this new mechanism has attracted attention to the platform.
Proof-of-History is created to maintain the decentralization of the network and establish a source of time that can be trusted. This mechanism provides a way to verify the passage of time between two events, using cryptography. Using PoH, you don’t have to rely on the timestamp of the transaction. Instead, you are able to prove through the mechanism that the transaction occurred sometime before and after the event.
By introducing PoH, the creators of Solana shortened processing times on the blockchain and when combined with PoS, decreased the validation times for transactions and the execution of smart contracts. The protocol also has low transaction costs, making it even more appealing to users.
Solana Price History and Future Forecasts
In this section we’ll go over the past price history of Solana, highlighting its most memorable goals. We’ll also provide price predictions for SOL, to help you see what is the general expectation for the price of the asset.
Solana Price History
Solana began trading in April 2020 and for a while stayed under or around $1. In August the cryptocurrency reached its highest price of the year, $4. The Solana price was volatile and the cryptocurrency ended 2020 at $1.51 and began 2021 on a similar note.
In 2021 the price of the asset began rising, influenced by the favorable market conditions and the growing interest from investors. In February Solana reached $10 and in April managed to jump to $40. However the market sentiment changed, influenced by the Bitcoin price, and Solana started trading below this high price again, around $20-$30 for a while.
Solana surprised everyone by reaching $110 in August 2021. The early investors were generously rewarded and new buyers were attracted to the coin. In October the price of the asset began climbing and on November 6th SOL reached its current all-time high price of $260.06. The gradual climb of the cryptocurrency brought it into the top 10 cryptos by market capitalization. SOL remains there now, though its price has since declined, due to the overall bear market.
Past Milestones of SOL
- April 2020: $0.74
- August 2020: $4
- March 2021: $19
- April 2021: $42
- August 2021: $109
- November 2021: $260.06
Solana Price Predictions
Solana ended 2021 with a lower price than its all-time high in November and since then continues to be very volatile and with a lower value. This is due to many external factors that are influencing the whole cryptocurrency market. Investors remain hopeful for the future of the crypto, due to its proven potential so far.
But nobody can be certain what the future price of any crypto asset will be. Many financial experts, celebrities, and websites generate price forecasts. However, that is speculative information that you can only use as to get an idea and should never base your investment decision on. SOL may rise again, it may also never reach a three-digit value.
Here we’ll list the highest and lowest prices for the asset from sites like The Economy Forecast Agency, DigitalCoinPrice, Coin Price Forecast, and Walletinvestor. This is not financial advice. We’re only providing this information to you to show you the possible prices of the token that others expect.
SOL Price Prediction 2022
SOL Price Prediction 2023
SOL Price Prediction 2025
SOL Price Prediction 2027
SOL Price Prediction 2030
What Solana Developments Should You Follow?
Both the blockchain and its cryptocurrency remain with high potential. There are many reasons to follow the projects and here we’ll list three of them you can consider.
- Improvements in the transaction speed: Today, SOL is among the fastest cryptocurrencies based on transaction speed as it can process more than 50,000 transactions per second. The platform is not only fast but also cheap, as the transactions cost less than $0.01. A development in this direction you could look forward to is the increasement of transaction speed to 700,000 per second.
- Growing number of projects: There are more than 300 different projects on the blockchain of SOL. The amount of DeFi applications continue to grow if you follow their progress in the future, you may find some interesting ones.
- NFT Marketplace growth: It was NFTs that made the price of this crypto jump in August 2021. Since then the blockchain’s NFT marketplace called Solanart has been expanding and with the raising popularity of non-fungible tokens, it seems that they are on the right path. If the platform continues to be used, it may again affect positively the native currency as well.
Problems Solana Has Faced
While this is a promising project with strong fundaments, it has experienced problems in the past. The network has had several outages. The first big one was on September 14th, 2021 when the network was offline for 17 hours. It was announced that the issue was a result of a DoS (denial-of-service) attack, aiming to shut down the network and stop the users from being able to access it. Bots that generated a big of the amount of transactions that flooded the network caused the attack, as there was memory overflow and the network was shut down. The network was fully operating within 24 hours and no funds were lost but this still brought distrust in investors. Although SOL reached its current high price just two months after this attack, the issues appeared afterward as well. In 2022 there have been several outages with different durations, caused by NFT minting bots. So far the network has managed to recover every time but this is definitely affecting the reputation of the project.
Solana is now an established project, with its pros and cons. There are several other blockchains and cryptocurrencies that aim to achieve similar things so it could be said that they are SOL competitors. We’ll review some of them so you know what this crypto is standing against when it comes to smart contracts, transaction speed, and network projects.
SOL appeared two years ago and quickly became one of the biggest “Ethereum Killers”, meaning it became a competitor with the second-largest crypto in the world, Ethereum. The two compete in the number of transactions per second (30 for ETH and over 50,000 for SOL), NFT marketplace development, creation mechanism, and transaction costs. Ethereum has found a worthy competitor in the face of SOL, however, Ether is an older, more established, and seemingly more secure asset, which could affect the trust of investors towards its side.
Avalanche (AVAX), competes in terms of scaling and growth speed of ecosystems. Both projects are growing fast in the NFT, DeFi, and games sectors, and aim at securing decentralization. Avalanche may have the advantage here in terms of keeping its network online, since it hasn’t experienced outages yet.
Polygon (MATIC) also wants to improve transactions and doesn’t fall behind in terms of speed. It’s advancing in the play-to-earn games sector but as an ecosystem and place for NFT collectors, SOL may be ahead of it.
Cardano (ADA) is another competitor of the crypto we’re discussing here. Famous for its Proof-of-Stake mechanism, Cardano and SOL compete in the number of dApps and supported DeFi platforms. While ADA is developing very fast and famous for its sustainability, SOL combines both PoS and PoH and is evolving its DeFi ecosystem maybe even faster.
Bitgert (BRISE) is a relatively newer project that also competes in the same field as Solana. It claims to be the fastest and cheapest blockchain, with low gas fees and a very fast-growing the number of projects on the network. It hasn’t had time to achieve all its goals yet, but if it does, it seems like a worthy competitor for the crypto we’ve reviewed here.
What to Expect in the Future From This Project?
From the information we’ve laid out, it can be concluded that this project has proven its worth, both as a blockchain and as a cryptocurrency. It has faced issues in the past though it also has many upcoming developments that may return investors’ trust in it.
Currently, the native cryptocurrency is trading at lower prices, along with the whole crypto market. However, it has the potential to reach high prices again, if the sentiment changes. If the network fixes its issues and continues to adopt new projects on the blockchain, the future of Solana may be bright.