Many crypto projects that came out during 2020-2021 claimed to become rivals to Ethereum, solve the scalability trilemma, and offer better conditions for the developers planning to build and deploy dApps and smart contracts. Solana is one of the main platforms with the real potential to outperform Ethereum, though during the recent crypto winter it suffered just like every other project. Read our Solana token price prediction to see what is going to happen to SOL in the near and far future.
Table of Contents
Solana Fundamental Analysis
Solana is a highly-functional open-source blockchain network that provides easier and cheaper access to DeFi solutions. Solana claims to be the fastest blockchain in the world as well as the fastest-growing ecosystem. It was built to facilitate the scalability of enterprise-grade blockchains. Additionally, it hosts numerous DeFi and Web3 projects. The vision of the project is to make decentralized finance accessible on a larger scale.
The idea of Solana appeared in 2017, and the Whitepaper for the project was also created at that time. The official launch of the network happened only in March 2020. The project was developed by Solana Foundation which has its headquarters in Geneva, Switzerland. The project was founded by Anatoly Yakovenko, the former software engineer at Dropbox, and Greg Fitzerald his colleague from the Qualcomm company. Both Yakovenko and Fitzerald invited some of their colleagues to the project, and then the protocol and its native SOL token were deployed.
Since the time of its launch, the native token of Solana has seen a surge in its price, affected a lot by the launch of the Degenerate Ape NFT collection on the Solana network. This, together with the high developers' activity, greater institutional interest and a growing DeFi ecosystem has also attracted more institutional interest in Solana. In fact, the fast growth of the project made the market experts consider it a competitor to Ethereum, being able to take 1st place for being a smart contracts platform.
The big advantage of Solana is not only a high throughput with over 50 000 transactions per second, compared with 15 tps of Ethereum 1.0 but also an extremely low cost of transactions at around $0.00025. The block time on Solana is just 400 milliseconds. The smart contract execution time on Solana is also much less than on other major blockchains.
Solana is the first ever blockchain network to introduce a Proof-of-History consensus mechanism invented by Anatoly Yakovenko, which is combined with an underlying Proof-of-Stake mechanism. The hybrid model of consensus allows Solana to be used by both small-grade businesses and institutional traders. Thanks to the unique combination of consensus mechanisms Solana also allows decentralized finance services to become accessible on a larger scale.
Proof-of-History records successful operations and the time that passed between them, ensuring the trustless base of the blockchain. The PoS is monitoring the processing of PoH and validates each sequence of blocks produced by it.
SOL is the native token of the Solana network. It has a total supply of 489 million SOL tokens with over 350 million in current circulation. 16,2% of the total supply was allocated for the initial seed sale, 12,9% went for the founding sale, 12,79% was distributed among the team members, and 10,46% went to the Solana Foundation. The remaining tokens will be released for private or public sale. The token is used to pay fees on the network and can be staked to secure the network and get rewards. Additionally, SOL serves as a governance coin, allowing holders to vote for future upgrades.
Solana Live Price Chart
After its bearish season of summer 2021 the SOL token was still down at the beginning of September 2021, but trading for around $178 at the moment. By the end of the month, the price of SOL dropped to the level of $136, dipping to $123 on September 21. At the beginning of October, the token recovered, reaching $169 on October 2.
At that time the crypto market was going through the altcoin season and many alternative assets were surging. It affected the price of the SOL coin as well, and after a price correction that lasted till the middle of October, the price of the asset started to grow and was going up till it reach the all-time high of $260 on November 10. During the next 4 weeks, the token was struggling to stabilize the price and break the resistance at $233, moving from $193 to $233 and then back. At the beginning of December, the price went down, reaching $153, but by December 18 established a new medium and even jumped to $198 at the end of the month.
Since the beginning of 2022, the Solana token was losing its value significantly. On January 24 its price reached $94, and even though there was a period of recovery at the beginning of February, the SOL price chart established a downtrend. By the middle of March, the SOL token price reached $81. At that time the crypto market started to show signs of recovery, so in the next 2 weeks, the price of SOL was growing. On April 4 to buy Solana users paid $132.
The price of SOL started to turn down from that moment. On April 11 the price dropped to $99 and kept slightly bouncing till the end of the month when it slipped to $89. The situation got much worse when the bears hit the market and SOL token price more than halved. On May 13 the price of SOL was $43. The asset continued in the downtrend until June 14.
Interestingly, while most of the crypto assets got hit by the huge crypto sell-off after June 11, SOL wasn’t much affected, as it lost most of its previous gains gradually just before it. Until the middle of August, the price of SOL was bouncing between $33 and $46. In the second part of August, the price of Solana went into a downtrend that lasted till the beginning of September. On September 6 SOL started to gain back its value, but couldn’t climb higher than $35 on September 9. The experts see the possibility for the token to go up shortly, though investors shouldn’t expect many gains.