From a small project to a top ten cryptocurrency, Solana has shown that innovation can drive a project to new heights. Unfortunately at the of 2021, this project has fallen in price alongside the rest of the cryptocurrency market since the major liquidations in November 2021. Let’s take a look at this project and see what token prices we might see for Solana in the future.
Solana is a decentralized platform that looks to a unique mechanism to improve blockchain scalability. Rather than using Layer 2 options like Ethereum, Solana instead uses a combination of Proof of Stake and Proof of History to improve its transaction speeds.
Proof of History essentially allows validators and nodes to process transactions without accounting for the time that the transaction takes place. By doing this, transactions can process faster, improving the transaction rate of the blockchain. Right now, Solana claims that its protocol can handle up to 50,000 transactions per second while maintaining its decentralized nature.
Solana also acts as a smart contract platform, allowing applications such as decentralized finance and NFT marketplaces to exist in its ecosystem.
As one of the newer cryptos on the market, Solana doesn’t have the same trajectories as others. While Solana showed a strong upturn, it hasn’t been completely free of the typical cryptocurrency plummets.
At the 2020 launch, Solana coins sold for less than one dollar (in USD). The crypto teetered between two and five dollars for most of 2020 before finding some traction throughout early 2021.
The summer of 2021 marked the biggest leap for Solana when it surpassed $200 per coin. Aside from a slight spike in late November and early December of that year, Solana remained near the $200 mark.
Note that converting to Euros shows a slight drop in the price with Solana staying around €150 (give or take €20) from September 2021 through the end of that year.
Solana’s price point has soared over the last year because of the faster transaction speed transactions and lower gas fees over Ethereum. What was once a small project has become a top ten cryptocurrency by market capitalization. Both of these facts point towards a bright future for Solana.
From a fundamental standpoint, there are some concerns to be had about Solana. Outages and concentrated validators mean the blockchain can experience down periods despite its decentralization goals. This fact hasn’t stopped developers and investors from creating apps on the blockchain.
However, it does mean that Solana will need to prove itself in the future for investors to feel comfortable reaching or breaking the current all-time high.
While it still has problems to solve, Solana is becoming a project worthy of its top ten placement. With an expanding ecosystem and fast transaction speeds, the protocol could be a major player in the cryptocurrency market for years to come. Overall, this should lead to a higher price for those that hold their tokens for the long term.