The DeFi Defacto: Solana

Solana is the fastest blockchain in the world and the fastest-growing ecosystem in crypto, with over 400 projects ranging from Defi, NFTs and Web3. Solana aims to address the current problem of other blockchains: scalability and speed. It currently supports 65,000 TPS (transactions per second) and 400ms Block Times. Solana started off the year at $1.51 per coin before rising to $160, a significant 10,600% rise.

Founding Team

Solana’s core technical team consists of Anatoly Yakovenko, Greg Fitzgerald and Stephen Akridge. They worked together previously for more than a decade and have a combined career background across software and hardware at Qualcomm, Dropbox, and Mesosphere. CTO Greg was critical behind the idea to migrate Solana’s base code from C to Rust, a programming language that is secure and fast. Stephen Akridge demonstrated that a massive amount of time could be saved by offloading the signature to a graphics processor.

A Breakthrough in Blockchain Consensus Algorithm: Proof of History

The core innovation of the Solana Network is the Proof of History, a significant advancement in the world of blockchain. The Proof of History is a sequence of computations that verifies the passage of time between two events. Each Solana stakeholder device possesses a cryptographic clock that automatically agrees on the same time, without needing to communicate with other stakeholders. Due to the objective security of Proof of History, humans do not need to be involved during the validation of a block. This is unlike the Proof of Work and Proof of Stake mechanism used by popular cryptocurrencies Bitcoin and Cardano respectively. Both feature a high level of decentralization and security, but at the cost of scalability. Bitcoin struggles to scale beyond 20TPS and the average transaction fee is $23. Meanwhile, transactions with Cardano average around 250TPS on a roughly $0.40 transaction fee. In contrast, Solana currently supports 65,000TPS on a $0.001 transaction fee and can scale up to 710,000TPS for each 1GB network on Solana, according to the Solana Whitepaper.

Strong Interest From the Crypto Developer and Investor Community

In one of the largest crypto funding raises of all time, Solana Labs secured $314 million to develop new technology. The funding round was led by Andreessen Horowtiz, one of the most renowned venture capital firms in Silicon Valley. Furthermore, Grayscale Investments, the world’s largest digital currency asset manager, added Solana to its Digital Large Cap Fund.

Moreover, Solana has also gathered a lot of Defi project attention, some of which are raising millions of dollars. Solana has recognised the importance of building useful and important dApps on its platform since this increases the adoption of its crypto token. Solana supports its dApp developments. For example, it has consistently invited new project entries to join its series of hackathons which have only grown in attention ever since: Wormhole Hackathon with 1000+ participants and 60+ projects, Solana Defi Hackathon with 3000+ participants 90+ projects, and Solana Season Hackathon with 13000+particpants 300+ projects. Among the various projects, some gems stand out: Raydium is an auto market maker (AMM) which facilitates near-instant token swaps and provides on-chain liquidity to a central limit order book unlike other AMMs, and Orca is a decentralized cryptocurrency exchange that aims to use its Fair Price Indicator to determine if a pool offers a fair price – a current pain point for DeFi users.

NFTs

Degenerate Apes was Solana’s first major venture into the world of NFTs and received much success in doing so. All 10,000 Degenerate Apes on sale were sold out within 8 minutes. The success of the NFT sale sent Solana prices to an all-time high of $63.33, a 36.8% gain in one day. The apes were sold at 6 SOL each, and average ape sales now fluctuate around the 60 SOL mark. With the success of the Degenerate Apes project and the recent NFT craze, it is possible that Solana might launch another NFT collection and cause another all-time high.

Solana Is Superior to Cardano

As much as Cardano is a top favourite for crypto enthusiasts, it is still inferior to Solana on paper. Cardano’s Hydra update aims to enable 1 million TPS across the network, whereas Solana can theoretically enable an infinite number of transactions in a second with GPUs according to Moore’s Law. In addition, Cardano has still not enabled the full deployment of its 2,300+ smart contracts whereas Solana already has 400+ projects onboarded.

While Cardano had a head start being founded first and is now sitting at the top 3 biggest market cap of all time in the cryptocurrency market, Solana could gain headway in the same path very soon and even succeed its predecessor. Today, Cardano’s market cap sits at $74 billion and Solana at $47 billion. Given that Solana has already entered the top 7 largest crypto market cap in the 3 years since its creation and the current momentum it has gained from both retail and institutional supporters, it is not unlikely that Solana still has much room to grow in price.