HomeBlockchainSolana (SOL): the recent ups and downs of the crypto

Solana (SOL): the recent ups and downs of the crypto

Solana is a decentralized layer 1 that is based on Proof of History with a capacity of 50,000 transactions per second and it has its own crypto, SOL, which has done well in the month just ended. 

Until 21 January, SOL recovered 76% of its market value and today it stands at €21.80. 

For the past 15 days, Solana crypto SOL has been basically lateralizing. 

Solana and the other Layer 1s are threatened by the Layer 2 boom that could ruin what has been going well so far. 

Solana: an analysis about crypto SOL

Analyst Mike McGlone believes that Ethereum’s Layer 2s are going up and will go up even more taking resources away from Ethereum

“Although activity has declined on the Ethereum base chain, 2022 has been a pivotal year for the asset, as the adoption of NFTs and Web3 applications on layer 2 chains has driven massive network effects. Layer-2s (L2s) is an umbrella term for blockchain scaling solutions that attempt to address the constraints Ethereum currently faces… 

Sharding in late 2023 is intended to alleviate scalability issues. Meanwhile, L2 has stepped in to improve the user experience and stop the flow of users to alternative tier 1 chains like Solana, Avalanche.”

The most striking case is Polygon (MATIC), which is the company that has gained the most from this trend. 

The crypto competitor is a consistent threat to the adoption of Solana

“After an average of 250,000 daily active addresses in the previous months, L2s exploded in October 2022 and surpassed the base chain. They now consistently maintain more than 400,000 active addresses per day. Daily active addresses on rollup or L2 chains increased 86% in 2022, compared to a 33% decline on Ethereum. Polygon becomes a beacon for developers. 

No L2 has created more network effects for Ethereum than Polygon. Polygon started as a sidechain but has grown into a technology aggregator focused on zero-knowledge (zk) rollups. A blockchain game changer, Zk proofs, a method to prove possession of certain information without revealing any of the data itself, improve privacy and speed up transactions.”

Meanwhile, Solana lost ground this week, abruptly curbing its run (-2.42%). 

Despite the portentous start to 2023, SOL is a long way from its all-time high which had touched €242.82. 

Currently SOL has 19 times the circulating units of BTC (373,212,791.263 SOL) in circulation.

Lately the company has come into the crosshairs of Cardano, which like a financial shark would like to buy it to make it a sidechain of its blockchain.

For Charles Hoskinson, co-founder of Ethereum along with Vitalik Buterin and founder of Cardano itself, Solana is a very interesting and solid entity worth investing in.  

“We have been discussing and thinking about these solutions for 6 years, and we push the concept that we will have a main chain and a family of sidechains and each of these will do a different thing. And the Cardano sidechain model is that when a sidechain arrives and connects with Cardano, that sidechain becomes a partner of the main chain. 

The main chain offers security, infrastructure, ecosystem and liquidity. For example, one could take Solana, replace the consensus algorithm with something 25 times faster and that doesn’t fail continuously (the reference is to the frequent stops of the Solana network), make it a Cardano sidechain. Solana would now be paying the $ADA holders (probably a smaller amount than they are paying now). They will no longer have to worry about security and all those Dapps that will move will have greater reliability and security.”

Not only crypto and NFTs for Solana, even crypto smartphones will be a reality. 

Solana and its crypto smartphones

Solana plans to create next-generation smartphones developed to be able to handle nodes and blockchain in addition to cryptocurrencies and NFTs.

In the past there have already been examples of crypto smartphones thanks to HTC and Polygon but for Solana this is a first. 

HTC, the Taiwanese company had released the first crypto phone five years ago. 

The device was the Exodus 1 which was based on blockchain technology. 

It was possible to manage a wallet with the smartphone, and with the second generation released last year (HTC Desire 22 Pro), it was also possible to access the open source metaverse and access DApps in the marketplace. 

The Solana Saga, that’s the name of Solana’s new cryptophone, will have the same functions as the one from HTC but it will also have more features.

For the first time an entire protocol, that of Solana, is being put into a smartphone and will have the most sophisticated protection to date from malware, the Seed Vault. 

With Solana Saga, one will be able to sell and buy crypto, make transactions with NFTs, use the network’s DApps, and of course for those who love the genre, engage in both P2E and non-P2E gaming. 

In addition to this the device will have a completely free WhatsApp-style DApp for chatting. 

The price of the Solana cryptophone will be around $1,000, the most expensive but also the most advanced in its category. 

As of today Solana Saga is not yet on sale but can be pre-ordered from the dedicated Solana Mobile site by paying $100 in advance which can be refunded.

The preorder states that the first 10,000 users who complete the process will be given a unique NFT collection, the Solana Pass.

The Solana Passes will be the key to take part in the Solana ecosystem and the company’s exclusive private events. 

George Michael Belardinelli
George Michael Belardinelli
A former corporate manager at Carifac Spa and later at Veneto Banca Scpa, blogger and Rhumière, over the years he has become passionate about philosophy and the opportunities that innovation and the media make available to us, in particular the metaverse and augmented reality