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3 Key Reasons Why I Own Solana (SOL)
The quickly growing blockchain platform
Solana is a highly functional blockchain platform that has become known for its incredibly fast, secure, and scalable network. Like Ethereum, Solana offers decentralized solutions through the use of smart contracts, which are self-executing computer programs with terms of the buyer’s and seller’s agreement directly embedded into lines of code.
Anatoly Yakovenko is the most important person behind Solana. He started working on a project in 2017 that later turned into Solana. In 2020, the Solana protocol and its token, SOL, were launched. One of the key innovations of Solana is its proof-of-history (PoH) consensus which allows for greater scalability of its protocol, which in turn boosts usability.
Ethereum has faced scalability issues with its rising gas prices, which has led to Solana being seen as an Ethereum killer. I do not look at it that way. As an owner of Ether and SOL, I see them coexisting and providing different advantages. To dive deeper into why I own SOL, the following are the three key reasons:
1. High Transaction Processing Speed
2. High Developer Support
3. Strong Liquidity
1. High Transaction Processing Speed
With its highly scalable networks, Solana’s key advantage is the high number of transactions per second that it can support. Solana can process as many as 50,000 transactions per second, and its average cost per transaction is $0.00025. Ethereum can only handle 15 transactions per second, and on average transaction fees have been about $70 in 2021. Ethereum is shifting to a proof-of-stake (PoS) consensus in 2022 to improve its scalability, but as of now, Solana is the winner when it comes to transaction processing speed.
2. High Developer Support
When it comes to specific blockchain platforms, developers are key. If a blockchain platform does not have a growing number of developers, it is likely not a platform that will continue to witness high levels of scale. When it comes to Solana, the platform has thousands of developers that have developed multiple decentralized applications. Approximately 13,000 developers participated in its last hackathon. Some of the most popular decentralized applications on Solana include the NFT marketplace Solanart, the Automated Market Maker and liquidity provider Raydium, the lending protocol Solend, and the exchange Serum. You can check some of the other top decentralized applications on DappRadar.
3. Strong Liquidity
Liquidity is important when it comes to investing in a specific cryptocurrency. You do not want to invest in a cryptocurrency to then be faced with no liquidity when you need to sell, leading to you likely losing your entire investment. SOL is highly liquid. As of December 7th, 2021, it had a daily trading volume of over $2.5 billion and a market cap of over $58.5 billion. With its market cap, SOL is the fifth most valuable cryptocurrency globally.
SOL can be purchased on multiple exchanges such as Coinbase, FTX, Binance, Bilaxy, and Huobi Global. As I said earlier, I believe Ethereum and Solana will coexist. Ethereum is still the #1 platform for decentralized solutions, but Solana has quickly grown into being #2 in just the past year. Year-to-date, SOL has provided a return of over 10,000%. I, unfortunately, did not witness the entirety of the massive return. Still, I am confident that five years from now, I would have never regretted choosing to invest in it and continuing to invest in it consistently.
