Solana is considered by many to be Ethereum's top competitor, this is primarily because of its unparalleled speed and massive institutional backing. However, it has seen its fair share of network issues and SOL has fallen far from its all time high. This has led many to wonder whether Solana's sunny days are over.
In this post I'm going to give you a bit of background about Solana and bring you up to speed on some of the project's most important updates and why I think Solana will be on the brink of recovery.
Solana was founded in 2017 by computer scientist Anatoly yakovenko. Solana was built by Solana labs q software company based in the United States and its development is coordinated by the Solana foundation, a nonprofit based in Switzerland.
Solana raised around $25M across various initial coin offerings between 2027 and 2020 and raised additional $314M from various crypto venture capitalist companies in 2021. It mainnet went live in March 2020 but its Blockchain is still technically in beta and this is noted at the top right corners of its two official block explorers. The Solana Blockchain uses a Nobel proof of stake consensus mechanism that timestamps transactions using proof of history, a special verifiable delay function.
The Solana Blockchain has more than 1700 validators, transactions are processed by groups of up to 150 validators called Solana clusters. This relative centralization plus Solana's insanely fast block time of 400 milliseconds makes it possible for Solana to process between 45 and 65 thousand transactions per second. To put things into perspective this is about the same speed as the visa payment network and this makes Solana the fastest cryptocurrency on the market .
Solana end game is to be faster than centralized stock exchanges like NASDAQ with the aim of eventually replacing them and this is a big part of why the project is so popular amongst institutional investors.
One I'd the institutional supporters of Solana has been the FTX exchange which uses Solana as it's de facto exchange chain and has poured millions of dollars into its ecosystem.
Solana is also the official chain for the USDC stable coin though around 90 percent of USDC currently exist in Ethereum.
Like Ethereum, Solana is smart contract compatible as such it has hundreds of decentralized applications and its Defi protocols currently have $5 billion in total value locked.
Solana also has a sizable NFT scene which should hit $2 billion trading volume at the time of writing.
This makes Solana the third most active Blockchain by trading volume after Ethereum and axie infinity Ronin side chain. The Solana ecosystem can be easily accessed using the phantom wallet which exists as both a mobile app and browser extension and has seen more than 2 million downloads.
All the buzz in the Solana Blockchain has made it extremely large which could quickly compromise its decentralization since a smaller and smaller number of validators will be able to store its entirety.
This is why Solana stores it's historical Blockchain data using another crypto project called arweave.
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