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What is Solana network? Is Solana a good investment ?

By Amy Luong
August 19, 2021

Solana was one of the most notable blockchain networks in 2020. As of 2021 with significant growth, Solana network has been considered a project with an extremely successful scaling solution up to now. Yesterday Solana cryptocurrency (SOL) hit its new all-time-high at $72.54. In this article, Tokenize Blog will give a closer look into Solana network and Solana tokens to help you understand its certain bullish trend. Let’s find out!

Solana network
Tokenize Blog will give a closer look into Solana network and SOL to help you understand its certain bullish trend

What is Solana network?

Solana is a blockchain-based project supporting decentralized finance and smart contracts with high performance. Based in San Francisco, Solana was founded by engineers from Qualcomm and Intel in 2017.

Solana network smart contract
Solana aims to solve the blockchain trilemma by providing a platform that develops a scalable network that is much faster than any other blockchain platform

Solana aims to solve the blockchain trilemma by providing a platform that develops a scalable network that is much faster than any other blockchain platform. The project developers intend to feature automated order placement, fast settlement times in seconds, low transaction costs, and support compatible smart contracts.

Currently, Solana supports 50,000 TPS (transactions per second) and 400 ms block time while maintaining a low transaction fee at about $0.0005.

How it works

Greg Fitzgerald, CTO of Solana, and Eric Williams come up with a solution to the issue on both the Bitcoin and Ethereum blockchains. They envisioned a distributed protocol that supports system scalability without affecting decentralization.

The solution is Proof of History (PoH), an alternative consensus for the PoW algorithm of the Bitcoin network. The proof of History method helps order the events on the blockchain network by allowing every node to check the validity of transactions independently instead of creating a unified time for all validators. 

Solana cryptocurrency
 Proof of History Timestamps. Source: Solana labs

The PoH system embeds the historical record of blockchain transactions to prove that the transactions actually occurred before they were included in the distributed ledger. The process was made by the Verifiable Delay Function algorithm. Within each node, there is also a cryptographic clock that tracks the network time and the order of events. As such, it would create high performance and more efficiency within the Solana network. 

Transaction data that is entered into blocks via hash functions are applied to a random string and its output is hashed again and so on. As such, this creates a sequence of hashes. As a new event occurs, it can add to the chain, leading to all future hashes change. These hash functions are then used as input for the next transaction before timestamped to record their actual sequence to save re-validating time.

The Proof of History consensus mechanism allows Solana to process 50,000 to 65,000 TPS (transactions per second) which is much more optimal compared to Bitcoin’s 7 TPS and Ethereum’s 15 TPS).

Solana network cryptocurrency (SOL)

Solana (SOL) is the native token of Solana Network. Below are some typical applications of SOL:

  • Fees: SOL can be used to pay fees in Solana’s blockchain network such as transactions fees, smart contract fees, etc.
  • Rewards: used as rewards for Stakers/Nodes to ensure the stability of the network.
  • Governance: used for future governance voting.

Some information of Solana

  • Blockchain: Solana
  • Mechanism consensus: Proof of Stake (PoS) and Proof of History (PoH) 
  • Token type: Utility Token
  • Market cap: $23,017,737,992
  • Circulating supply: 286,437,675.75 SOL

Is SOL a good investment?

Since the launching process, Solana has experienced tremendous growth momentum. Though a newly emerging network, the number of projects running on Solana’s blockchain has rapidly increased, proving Solana’s strong attraction. 

By early 2021, the Solana ecosystem has welcomed more than 100 projects in different fields to participate, for example, Raydium, Serum, Bonfida, Mango Markets, etc. As such, the Solana network might become a promising competitor to Ethereum and Binance Smart Chain in the near future. 

Solana Network projects
By early 2021, the Solana ecosystem has welcomed more than 100 projects in different fields to participate. Source: Solanians

Due to practical evaluation on the technical term, the developer team, and investors, Solana is considered a very potential project and worth long-term investment. Remember to do your own research before making any investment decisions, all information in this article is for reference only, not investment advice.

How to buy Solana tokens (SOL)?

Though many crypto trading platforms have yet to support Solana, Tokenize Xchange is an exception. Today you can easily sell and buy Solana on Tokenize Xchange. Also, you are able to stake SOL at up to 8%. 

>>>Check out the Crypto Earn Program for more details<<<

Don’t forget to finish KYC to start trading, once your identity has been verified, you will be able to begin your investment journey. 

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