Solana: Why are investors betting so much on it?

It is becoming increasingly difficult to discern the next big cryptocurrency nuggets. Ever more ambitious projects appear every week. Everyone claims to provide the miracle solution to this or that problem. Finally, it becomes hard – and also given the many disappointments or pleasant surprises – to make good predictions.

And, in fact for Solana, it’s been a long time since we’ve dreamed about a project. Yet the concept is simple! Finally, the concept is simple theoretically but in reality, it is still complex to understand.

And here you will find out more about Solana and understand why so many people are betting on it.

Presentation of the Solana blockchain

First of all, you should know that Solana, is the name of a beautiful beach in California. Is it anecdotal? Yes, well, it's true. Anyway, the founder of Solana is called Anatoly Yakovenko and he lives in this state having worked in telecommunications, at Qualcomm to be exact. It was in 2017 that he launched Solana, with the idea of creating a high-performance blockchain that would also support smart contracts and Dapps. Solana works with Proof of Stake (a new type, we will see this below) and transactions are timestamped. In fact, this is the great novelty of Solana: a decentralized clock.

Moreover, Google for example had already created a similar concept, except that yes, it was centralized…

If Solana quickly became known, this is certainly due to the fact that many members of the team come from the biggest companies in Silicon Valley. There are former employees of Apple, Google, Microsoft, Dropbox and also Qualcomm.

Solana successfully raised more than $25 million in its ICO. Which, even in the world of ICOs, remains a significant amount.

They are said to have taken inspiration from the architecture of Filecoin, the blockchain which allows data storage in a decentralized way.

What does Solana bring to the world of blockchain?

The main problem with blockchains today is their "slowness". They cannot support thousands of transactions per second for the most part. And when they can (we think of Ethereum), well, the fees suffer.

With Solana, it's different. Between 50 and 65,000 transactions per second can be processed! Moreover, the real limit in theory is set at 700 transactions per second. Can you imagine the power of this blockchain?

No?

Well, think about the 7 Transactions per second (TPS) and 15 TPS of Ethereum…Can you see better?

So yes, yes, this is not the first time that a blockchain has wanted to solve this problem of the number of transactions. Ripple was the first to embark on this path. Then, Polkadot for example and especially Ethereum 2.0. We are still waiting for Ethereum 2.0…

The particularity of Solana is that it is also a single, single-layer blockchain and that all operations are carried out autonomously.

How does Solana actually work?

We told you that Solana works on a type of improved proof of stake. In fact, it is more precisely what is called "Proof of history" (PoH). It is not strictly speaking a consensus mechanism like Proof of stake or Proof of work. In fact, it is an element of consensus that is based on Solana's Proof of stake.

It's so complicated in fact that many thought they were seeing a Delegated Proof of Stake (DPOS). The company clearly stated that this was not the case.

If it's not very clear, you will understand better now. As discussed, Solana involves a timestamp. It is in this sense that the Proof of History takes on its full meaning. A new block is created every 400ms (while it takes around 10 minutes for Bitcoin and 15 seconds for Ethereum), the decentralized clock will then serve as a reference. The hash functions are then given in tempo every 400ms. It is the internal clock that will run and set the hash functions.

It’s really wise to have thought of such a system, I must admit.

Finally, to go into detail, you should read the white paper which you can read here.

In any case, what you need to remember is that in technical terms, Solana is a very fast and efficient blockchain. A node cluster (Solana Cluster) could for example easily host a DeFi platform like Uniswap for example. And another Solana Cluster could manage transactions from another platform.

The possibilities are open with Solana. And, that's why many investors are watching it closely. Moreover, even more than investors, they are also blockchain entrepreneurs who are very interested in deploying a project on this blockchain. So, there are some kinds of financing grants to help entrepreneurs get started on Solana.

DEX Serum FTX, a decentralized exchange announced that it will be on the Solana blockchain. And, clearly, this was just the beginning...

What are the tokenomics of Solana crypto?

Solana has a native cryptocurrency: SOL. The total supply will be a maximum of 500 million. Moreover, you can also stake SOL to hold a blockchain node and thereby receive tokens as rewards.

SOL crypto will also be a governance token through which holders will be able to participate in project decisions.

Final word on Solana

To invest in Solana, the best platform remains Binance because the trading volume is really interesting. You can also store it on Trust Wallet for example.

You should also know that Solana can create a Solflare web portfolio.

In any case, Solana is working on numerous partnerships such as with Chainlink. It is above all these partnerships which cause the price to rise, which is logical.

Moreover, by its very structure, by its proven power and its speed, it would frankly not be a surprise if it subsequently hosts numerous platforms.

Some are betting on Solana because they even see it as the tipping point between centralized exchanges and decentralized exchanges. They say that given the power of Solana, it would be possible that we could use decentralized exchanges on a massive scale, without the defects that we encounter today (slowness and price).

Promising, isn't it?

Now, it remains to be seen whether they will meet the challenges they face...

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