Ever since second-generation blockchain networks came into existence, projects have kept popping up to offer decentralized networks that can host and run applications (dApps). Developers behind each project tout their offering as an Ethereum killer, a term loosely used to donate that the project’s blockchain network will rival and beat the original second-generation network.
For most of these, they do not come anywhere near to the success of Ethereum. Seldom come close.
Solana almost did.
Solana: The Good
The brainchild of ex-Qualcomm executive Anatoly Yakovenko, the idea was conceived for the network in 2017 when the whitepaper came out. Yakovenko understood that the greatest issue that blockchain networks faced was the dreaded “trilemma.”
In layman’s terms, the blockchain trilemma points out that a decentralized network can achieve two of three things, namely security, speed or decentralization.
Yakovenko laid out his plans to achieve these three using a combination of the tried and tested Proof of Stake (PoS) consensus and a unique out-of-the-box approach with the Proof of History algorithm. Working with this hybrid consensus, Solana can achieve speeds much faster than other networks while maintaining data integrity and decentralization. More than 2300 validators, nearly 4,000 TPS, and an average transfer cost of $0.00025 is proof.
When the mainnet eventually launched in 2020, the network and its native SOL token gathered a massive interest. Considering its growth and potential, many big projects started working and supporting their systems on the Solana blockchain. Tether and Circle quickly launched their stablecoins (USDT and USDC, respectively) on Solana, offering users the advantage of transacting and hedging against crypto volatility using the US Dollar parity tokens.
The result was SOL jumping nearly 12,000% in 2021, commanding over a $66 billion market cap and the fifth largest network.
SOL/USD Comparison, March 2020- September 2021 (Curtesy, CoinMarketCap)
Other major initiatives on the Solana blockchain include:
- $134 million funding by Andreessen Horowitz.
- DeFi projects such as Mango Markets, Port Finance, Lido and even Raydium
- Metaverse Drag and Drop SaaS platform AlphaBatem Labs
- Liquidity aggregators like Jupiter and LiquifyNFT
- Decentralized file storage and web hosting like BlokHost
- NFT Marketplaces like Magic Eden, Digital Eyes, Hyperspace
- Decentralized Music platform Audius.
- Secure messenger Jabber
Solana: The Bad
Nothing in the world is perfect, and neither is Solana. Though being the poster child of the decentralized world and showing how out-of-the-box thinking can be used to bring decentralized technology at par with the speed and load that traditional financial networks achieve, Solana has had its share of setbacks.
The most stressful issues for Solana have been the network outages.
The first was in September 2021 due to an unintended fork. Less than 24 hours, the split was consolidated. The second and third came in 2022, both lasting only a few hours.
Other hits include a class action lawsuit concerning the sale of unregistered securities (something that happens a lot in the crypto sphere) and the massive fallout of the FTX exchange’s collapse. The result was a massive drop in SOL value, which witnessed a 40% worth being wiped out in a single day
Solana’s Future Is Bright
Despite its roller-coaster history, Solana is still a vibrant and active network with a dedicated community of enthusiasts, developers, and believers. Even with its past troubles, the network statistics still show extreme interest in it, such as 2 million active users on a monthly basis. Daily user sign-up is also known to hit 300,000 occasionally. Boasting an $8.73 billion market cap with roughly 372.6 million tokens in circulation, Solana is standing at number 11, but it has all the ingredients to rise higher than before.
The potential for growth in the future exists and is even acknowledged by none other than Vitalik Buterin himself. A true proponent of blockchain technology and what it can bring to the masses, Buterin is not known for being much vocal about Ethereum rivals. Yet, he said,
Vitalik Buterin
“Some smart people tell me there is an earnest smart developer community in Solana, and now that the awful opportunistic money people have been washed out, the chain has a bright future. Hard for me to tell from outside, but I hope the community gets its fair chance to thrive”
If you read between the lines, there is a strong message. The “opportunistic money people” he mentions can be taken in different contexts. Still, the fact is that people who want to make money out of SOL purely as an investment or by market manipulation are out of the game.
Despite Solana’s past issues, Solana developers are building aggressively, and the last few months have shown an uptime of more than 99%. Proactive initiatives include developing an SMS-based transaction capability to cater to underdeveloped nations where people need access to smartphones or the internet.
The result is a network that is attracting developers and investors, both institutional and retail. As more developments keep happening, Solana will keep improving its efficiency, speed, uptime, and economics. This will offer a major advantage in the next bull cycle as it can show more growth than other leading blockchain networks, especially its rivals like Ethereum.
Solana is just more than a blockchain network. It is constantly testing new frontiers, developing services and products that offer true financial inclusion, and remaining committed to results in a blockchain network that will stand the test of time.
Solana is a game-changer in the blockchain space, offering unmatched performance and scalability. The projects building on Solana are taking advantage of its cutting-edge technology to bring new and innovative solutions to the market. We’re thrilled to be a part of this ecosystem and are excited to see what the future holds for Solana and the projects it powers.
