What is Solana (SOL)?

There is a large number of cryptocurrencies in the market, but Solana (SOL) has been one of the top coins in 2021. This virtual currency was able to reach a large number of users and several projects have been working on different solutions on top of this blockchain network. 

In addition to it, Solana became one of the top 5 cryptocurrencies. This shows that there has been a large adoption and interest in this coin. But what is Solana (SOL) all about? What is this blockchain network offering that other projects are not currently able to offer? We will tell you all the details about Solana in this guide. 

What is Solana (SOL)?

Solana is a cryptocurrency and blockchain network that aims at offering advanced and efficient decentralized finance (DeFi) solutions. The goal is to offer better solutions than the current blockchain networks in the cryptocurrency market. 

Over the last few years, we have seen how layer-1 blockchains have been affected by scaling issues. Fees became very high and transaction times were also massively long for those users that did not want to pay for high transaction fees. Due to this reason, DeFi and other blockchain initiatives searched for different solutions to be able to deploy their projects. 

Solana became one of the most efficient networks that facilitated the creation of different decentralized applications. The goal is to improve scalability and make it possible for all projects to release and deploy their smart contracts on top of that network. 

This blockchain network works with a unique Proof-of-History (PoH) consensus algorithm that relies on Proof-of-Stake (PoS) solutions as well. In this way, it is possible for Solana to make it possible for network participants to deploy, handle and interact with different smart contracts, dApps and decentralized finance solutions. 

Thanks to its hybrid consensus algorithm model, Solana is able to offer some of the most reliable and fast blockchain solutions in the cryptocurrency market. Users should not be worried about the lack of scalability or high fees, Solana is nowadays one of the best and most efficient blockchain networks in the cryptocurrency market. 

At the time of writing this article, Solana is working with more than 400 projects from all over the world. In the future, this number could continue growing, as the goal is to onboard as many projects as possible to use and enjoy fast transaction speeds, low fees and efficient smart contract deployment. 

Thanks to its network of global validators, Solana is a decentralized network that is fully censorship resistant, which is very important for crypto and market participants. In this way, companies and individuals that deploy smart contracts on top of Solana can be sure that their transactions will be processed and that they will not be controlled by a centralized authority. 

SOL in the Cryptocurrency Market

When it comes to Solana, there are many things to take into consideration. One of them is its cryptocurrency called SOL. SOL is the digital asset that powers the entire Solana ecosystem. Thanks to it, users are able to enjoy low cost and reliable transactions on the Solana network. 

Thanks to Solana’s expansion, we have seen SOL reaching the top 5 cryptocurrency market. According to data shared by CoinMarketCap, Solana has a price per coin of $173 and a market capitalization of $.123 billion. This makes it the 5th largest virtual currency in the world after Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB) and Tether (USDT). 

This is certainly impressive for Solana, a cryptocurrency that was released to the market in 2020 and that in such a short time became one of the most popular and largest blockchain networks in the world. The first year of Solana was quite flat. Indeed, the virtual currency was traded between $0.78 and $4.5 per coin. However, most of the time, the virtual currency was traded at close to $2 per coin. 

There was a first price increase from $1 to $4.5 and a bear trend from $4.5 to $1.5. The price increase was experienced by SOL in just a few weeks and the bear trend took place between September 2020 and January 2021. 

Things changed in 2021 with the price appreciation of Bitcoin. The whole cryptocurrency market started to move higher, and Solana was not the exception. SOL surged in May 2021 to over $50 per coin. Let’s not forget that this virtual currency started the year at close to $1.5 per coin. Between May and August, SOL entered a period of accumulation retracing to $23 per coin. 

In September 2021, a new bull run started for Solana that tried to hit $200 (but it was not able to do so). Nevertheless, in November, SOL surpassed $250 per coin. Now, SOL is being traded close to $175 and it has been in an accumulation period for several weeks now. It would be very important to see and understand what will happen with Bitcoin in the coming months, as this could have a clear influence on the future of this virtual currency. 

Solana Price Prediction 2022

Analysing the cryptocurrency market is not an easy thing to do. Indeed, there are many things that we should take into consideration. Analysts usually take into account the fundamentals and technical aspects of this virtual currency. This happens not only for cryptocurrencies but also for the stock market. 

Take into consideration that we are not financial advisors and that this should only be considered for educational purposes. Solana could experience a price increase throughout 2022 if there is a bull market in the cryptocurrency industry. This would happen with Bitcoin and Ethereum taking the lead and pushing the entire ecosystem forward. 

Let’s not forget that there could be other things that could help SOL in 2022. For example, we have seen that Solana has experienced large growth thanks to the expansion of non-fungible tokens (NFTs) and decentralized finance (DeFi) applications in 2021. If the market continues to move forward, then it is highly possible to see an increased demand for SOL and the Solana network. 

We should also know that the cryptocurrency market works with different cycles. These cycles are clearly marked by bear, bull and accumulation periods. During bull markets, most virtual currencies move higher, meaning that SOL has higher chances of following the trend. If there is a bear market, there will be higher chances for SOL to decouple itself from the general crypto trend and move higher. 

Finally, there could also be an accumulation period. During that time, investors would be able to purchase SOL and the virtual currency would be traded in a relatively tight range. This is what happened to Bitcoin between January and December 2018. This can certainly happen to SOL as well.

Solana price prediction for 2022 is difficult to establish. However, if it moves higher, there are larger chances for this digital asset to register new all-time highs. Instead, if the digital currency moves lower (due to a general crypto bear market), then it would be very important to define support levels and understand how far the digital currency could fall during a bear trend. 

How to Buy Solana?

If you want to buy Solana, using a cryptocurrency exchange is always the best option. This would let you easily handle your funds, deposit money and manage your digital assets. Moreover, you would also be able to participate in different initiatives related to the cryptocurrency market.

The process of opening a cryptocurrency account and purchasing digital currencies is quite standardized. That means that users would be able to follow these steps independently from the exchange they are using to buy SOL. 

Step 1- Open a Crypto Exchange Account

Let’s start with the basics, investors should open a cryptocurrency exchange account. There are dozens of options around the world that would let you buy SOL. That means that it is up to the user to decide which platform to use. 

Some cryptocurrency exchanges are better than others due to the fact that they would let users deposit funds in their local fiat currency. Moreover, some cryptocurrency exchanges might offer a larger number of virtual currencies or crypto-related services. Hence it might be more convenient to choose one or another platform. 

Furthermore, opening a cryptocurrency exchange account is quite easy. You will have to share your email account, a password and some additional information that would let you verify your identity. Once that’s done, users will be able to deposit funds and buy SOL in just a few simple steps. 

Step 2- Fund your Account

This is one of the most important parts of purchasing SOL. Without funds, you will not be able to buy any virtual currency. But each cryptocurrency exchange has a different number of deposit options available. You want to make sure that you select the one that meets your needs. 

Some platforms would let you use debit or credit cards while others would let you make a bank transfer. No matter which type of payment method you use, you will have to deposit either virtual currencies or your local fiat currency to the cryptocurrency exchange. 

There are some other third-party solutions that would also let you buy SOL. However, funding a cryptocurrency exchange account is nowadays a very easy thing to do. Most of the largest exchanges around the world are allowing users to deposit funds using different payment methods. 

Step 3- Buy SOL

The last step is to buy SOL. This is what we have been trying to do. Now that you have your account with funds, you can go either to the “exchange” section or the “simplified” buying process. The simplified buying process might not be available in all the exchanges. 

The exchange would let you trade your funds against SOL. Another thing you should take into account is that there might not be many trading pairs. That means that you might have to change your fiat currency for another virtual currency before being able to buy SOL. For example, if you have deposited Eur and there is no SOL/EUR trading pair, then you should convert your EUR to another virtual currency in order to buy SOL. 

Best Solana Crypto Exchanges

It is now time to analyse the different exchanges that are currently letting users buy Solana. This would let us understand which are the platforms with the best solutions and which platforms we should definitely avoid. When analysing a cryptocurrency exchange to buy a digital currency, we need to take into consideration the payment methods, the liquidity that they have for a certain trading pair and the reliability of the platform (how recognized it is). 

At the moment, there are several cryptocurrency exchanges that are supporting SOL. That means that you will not have problems purchasing Solana if you decide to do so. Some of the exchanges that are currently supporting different SOL trading pairs include Coinbase Exchange, Binance, Huobi Global, KuCoin, Kraken, FTX, Gate.io and many others. 

When it comes to trading volume, we see that the SOL/USD trading pair on the Coinbase Exchange is the one with the largest liquidity around the world. It represents 10.95% of the total trading volume for Solana in the market. 

The second trading pair with the largest volume for Solana is SOL/USDT on the Binance exchange. In the last 24 hours, this platform handled 10.78% of the total trading volume of Solana around the world. It is worth taking into consideration that Binance has 13 different trading pairs for Solana that represent 16,33% of the total trading volume of this virtual currency. 

Instead, Coinbase has six different trading pairs with a total trading volume of 12,96. Both Binance and Coinbase support different fiat currencies, which would be ideal for those users that deposited funds and want to have fast and direct access to SOL. 

Other cryptocurrency exchanges with a large trading volume for Solana include FTX, OKEx and Huobi Global. These three trading pairs (SOL/USDT and SOL/USD) represent 15,75% of the total trading volume for Solana around the world. 

It is now up to you to decide the cryptocurrency exchange that you use to invest in Solana or to buy and sell other virtual currencies.