Introduction:
The cryptocurrency markets experienced incredible growth in 2021, with the total market cap soaring from $760 billion to $3 trillion by year’s end. Bitcoin and Ethereum captured much of the attention as the two dominant cryptocurrencies. However, many investors are looking deeper into the market for the next potential 10x or 100x gainers. One cryptocurrency that has been gaining traction is Solana (SOL), which saw massive gains of over 11,000% in 2021.
With its focus on speed and scalability, Solana aims to be the Visa of the crypto world. The blockchain utilizes a unique combination of proof-of-history and proof-of-stake consensus to achieve transaction speeds of over 50,000 per second. This makes Solana one of the fastest blockchains in the world, rivaling even traditional payment networks.
As we enter 2022, there are signs Solana is catching fire and has the potential to be a top performer in the coming years. In this post, we’ll dive into why Solana could post huge gains in 2024 and contend for the best cryptocurrency of the next bull market cycle.
1: Solana’s Key Advantages
Solana was created in 2017 by former Qualcomm, Intel, and Dropbox engineers to solve the blockchain trilemma – achieving decentralization, security, and scalability simultaneously. Most blockchains like Bitcoin and Ethereum prioritize decentralization and security at the expense of scalability. Solana takes a different approach, optimizing for scalability, which provides several advantages.
Speed and Cost Advantages
As mentioned previously, Solana utilizes a unique proof-of-history consensus mechanism that enables it to process over 50,000 transactions per second. This dwarfs Bitcoin’s 5 transactions per second and Ethereum’s 15. Faster transaction speeds allow Solana to rival the transaction times seen on traditional payment rails like Visa.
Solana’s speed translates into extremely low fees. A typical Solana transaction costs around $0.00025, compared to around $20-30 for Ethereum. This makes Solana ideal for DeFi applications, NFT minting, gaming, Web3 applications and more. Users aren’t priced out by astronomical gas fees on Solana like they are on Ethereum.
Is Solana your next investment? Research and decide.
Programming Flexibility
Solana is designed to be coding-language agnostic, supporting development in Rust, C++, Go, and more. This allows more developers to build on top of Solana without having to learn a new language.
The blockchain is built on a proof-of-history consensus that relies on a high degree of synchronization across nodes. This allows Solana to utilize GPUs and SSDs to scale horizontally across nodes, further increasing possible transaction throughput.
Overall, Solana’s architecture provides historical speed and scalability that opens new possibilities in the crypto space.
2: Growing Developer Mindshare
One of Solana’s biggest achievements has been attracting developers to build on the blockchain. Developer mindshare is hugely important for any blockchain’s success, as more dApps and use cases drive adoption and utilization.
Solana has quickly become one of the most active layer 1 blockchains in terms of developer activity. It now ranks #5 in developer activity according to Santiment, ahead of bigger market cap chains like Avalanche, Polkadot and Monero.
Much of this activity comes down to Solana’s focus on creating a welcoming and supportive environment for builders. The Solana Foundation provides grants, hackathons, incubation, and public bug bounties to accelerate development. The Solana ecosystem also includes ventures arms like Solana Ventures and investment funds like Solana Capital to financially support projects building on the blockchain.
Importantly, developers are taking advantage of Solana’s speed and low costs to build applications not possible on other chains. DeFi and NFT use cases have exploded on Solana, with ecosystems like Serum, Raydium, Bonfida, and Metaplex hosting innovative projects.
Solana is also attracting institutional projects, with FTX building the decentralized SRM exchange and derivatives protocol Project Serum on Solana. Major NFT projects like Degenerate Ape Academy have chosen Solana due to the blockchain’s speed and scalability.
As Solana continues attracting developers, its ecosystem will expand, supporting even higher demand and SOL prices. The activity seen so far in 2022 suggests developers will continue embracing Solana’s infrastructure in the coming years.
Is Solana your next investment? Research and decide.
3: Expanding Institutional Investment
In addition to grassroots developer activity, Solana is also attracting increased investment from institutions.
In June 2021, Solana Labs completed a $314 million funding round led by Andreessen Horowitz and Polychain Capital. This was the fourth largest funding round in crypto history, demonstrating strong faith from top venture capital firms.
Hedge funds and trading firms have also embraced Solana as an institutional-grade blockchain. Jump Trading and Alameda Research utilize Solana for trading products and services. Asset management giant Grayscale offers SOL investment through its Grayscale Solana Trust.
These institutional backers provide resources that can accelerate Solana’s growth. They also signal that Solana meets the technical and security standards required for institutional capital. As banks, hedge funds, and other firms continue entering crypto, their preferences will shape which blockchains and assets see the most investment. Solana’s institutional traction helps position it for this Wall Street wave of adoption.
Perhaps most importantly, the Solana Foundation still holds a large portion of SOL supply that vests over coming years. Continued partnership and integration milestones will steadily unlock new SOL into the market, providing buying pressure and upside price potential.
4: Expanding Real-World Use Cases
Is Solana your next investment? Research and decide.
The true measure of any blockchain is real-world utility and adoption. On this front, Solana is making major strides, proving its use case for speed, scalability, low costs, and innovation.
Solana is now home to over 350 projects spanning DeFi, NFTs, Web3, social, gaming, infrastructure and more. Total value locked in Solana DeFi has quickly risen to $12 billion, making it a top 5 DeFi blockchain alongside Ethereum and Binance Smart Chain.
DeFi – Serum, Raydium, Orca, Solend, Francium, Apricot Finance NFTs – Metaplex, Magic Eden, Solanart, Degenerate Ape Academy Infrastructure – Phantom, Slope Wallet, Solana Pay Social – Twitter alternative SolSocial Gaming – Star Atlas, Degenerate Ape Fight Club, Monkey Ball, SolChicks
The variety of applications being built validates Solana as a multi-purpose blockchain. Developers are taking advantage of Solana’s scalability to onboard the next billion Web3 users through experiences that would be unworkable on Ethereum.
Solana is also expanding into mobile and real-world payments via Solana Pay. Users can pay with SOL or stablecoins at point-of-sale systems with near instant settlement. Partnerships with FTX, Gate.io, Bitpay, and Wormhole bridge assets from other chains onto Solana for payments. This provides direct utility for SOL beyond just speculative trading.
As these ecosystems continue growing, they’ll drive real organic demand for SOL and increase its utility value. Solana has already proven its capabilities – now it just needs time for adoption to spread.
Is Solana your next investment? Research and decide.
5: The Road Ahead for Solana
If 2021 marked Solana’s breakthrough as an elite protocol, 2022 shows promising signs it can become a ubiquitous global settlement layer. Developer activity is accelerating, institutions are buying in, and real-world utility is expanding.
However, Solana still has its fair share of challenges and unknowns ahead that could hamper growth.
Technical Stability – While Solana prioritizes availability over decentralization, network outages in 2021 and 2022 have raised concerns. As more value flows into Solana, the blockchain needs to showcase resilience against downtime and security flaws.
Competition – Ethereum is planning a massive upgrade to Eth2 that will improve its scalability. Polkadot, Cardano, and others are also innovating on their smart contract and DApp capabilities. Solana must continue differentiating itself from rivalLayer 1 chains.
Regulatory Uncertainty – Like all cryptocurrencies, Solana faces an uncertain regulatory environment. New laws that limit cryptocurrency development or operation could negatively impact Solana’s growth trajectory.
Despite these challenges, Solana has charted an ambitious course forward that could cement its status as a blockchain leader. The team plans to introduce smart contract upgrades, launch mobile devices Solana Saga, and tokenize Web2 platforms like Twitter onto Solana. With its warchest of funding and talented developers, Solana is positioning itself for the long term.
The Verdict? Solana’s Growth Trajectory Appears Strong for 2024
When looking holistically at Solana’s progress, it’s clear the blockchain and SOL have strong potential for gains in 2024. Compared to Ethereum’s $400 billion market cap, Solana’s $41 billion valuation has substantial room to multiply in value. Its technology is world-class, developers are building furiously, adoption is booming across verticals, and institutional interest continues growing.
Of course, predicting any cryptocurrency’s price movement is challenging. The crypto markets remain highly volatile and prone to booms and busts. But Solana’s robust fundamentals suggest it could very well contend for the top performing cryptocurrency of the next bull run. Its speed, scalability, and cost advantages solve real problems that will only become more pressing as billions more users enter the crypto economy.
For cryptocurrency investors with high risk tolerance, Solana looks like a worthy contender to potentially deliver 10x or greater returns in 2024. Of course, responsible portfolio management is always recommended. But those looking to diversify into high-upside altcoins would do well to consider buying Solana before the next wave of adoption. If its current trajectory continues, Solana is primed to soar throughout the 2020s.
Conclusion:
Solana was one of the biggest crypto breakout stories of 2021, but there are signs its rally could have much further to run. With developers flocking to the chain, institutions investing heavily, and real-world adoption accelerating across NFTs, DeFi, Web3 and payments, Solana is cementing itself as a core Web3 infrastructure play for the future. While challenges remain, Solana’s ambitious roadmap combined with its uniquely scalable and fast blockchain architecture point to a bright future. For cryptocurrency investors, Solana is a compelling 2024 pick that could potentially deliver outsized returns if its ascension to a global settlement layer plays out.