Until recently, no one knew about the Solana (SOL) cryptocurrency, and the ambitious name of the next Ether killer sounded too pathetic. Still, Solana added 24% in price at the beginning of November 2021 and suddenly broke into the leaders of the cryptocurrency rating.
At the end of 2021, SOL was in fourth place by market cap, overtaking Cardano and XRP, and currently, ranks ninth. Today, we’ll consider the history of Solana’s creation and also give a forecast for the SOL price for 2022. Let’s get started!
When Was Solana (SOL) Launched?
Solana was created in 2017 by former Qualcomm employees Anatoly Yakovenko and Greg Fitzgerald, as well as Eric Williams, Ph.D. and data scientist. A beta version of the system appeared in 2020.
Yakovenko described the main goal of Solana in the project’s white paper — reducing the amount of time it takes for blockchain nodes to synchronize or reach consensus. High speed should help developers scale their decentralized applications (dApps) and ensure that their user base grows quickly.
To speed up the system, Solana, in particular, uses the proprietary Proof-of-History (PoH) algorithm along with Proof of Stake (PoS).
PoH allows you to record an event that has occurred even before information about a transaction is added to the blockchain. In this way, nodes on the Solana blockchain can create blocks without having to coordinate their actions with the entire network. This, in turn, reduces the amount of transaction time.
By the way, Yakovenko already had experience in creating algorithms that increase work efficiency when he was a team member of the DropBox cloud service.
Solana uses several more technologies designed to increase the speed of the blockchain. Among them are, for example, the Turbine protocol, which breaks down all information into small chunks.
What Is Solana Cryptocurrency?
The Solana cryptocurrency, which is used on the blockchain of the same name, can be obtained by confirming transactions or using programs in this ecosystem.
Users can also passively earn tokens thanks to the PoS algorithm, distributing rewards among users. Its size will depend on the amount of cryptocurrency they have accumulated — this process is called staking. The principle of operation of the new version of the Ethereum blockchain (Ethereum 2.0) is based on it.
As is the case with Bitcoin, SOL emission is limited to 489 million coins.
Read Next: What Is Solana (SOL): How to Buy Solana Crypto Instantly in 2022
Main Solana Perspectives to Know
As for the name of Ether killer, it is too early to talk about it. So, only a few dozen decentralized apps are based on Solana, while Ethereum already has several thousand of them. However, this is easily explained by the fact that Ethereum was launched in 2015.
In addition, a lot of prominent investors believe in optimistic Solana’s prospects. In early June, the startup was able to raise more than $314 million in investments. A significant part of investments was made by one of the leading investment firms of Silicon Valley, Andreessen Horowitz, one of the first investors in Skype, Facebook, Twitter, Coinbase crypto exchange, and other successful companies.
Still, Solana doesn’t strive to become an Ether killer. So, a TechCrunch interviewer found out the following:
We spoke with him yesterday, and he certainly isn’t rooting against Ethereum, saying it would be ‘devastating to the entire industry’ if Ethereum isn’t able to transition to proof-of-stake successfully, given its share of mind and market capitalization of around $500 billion.
Solana (SOL) Price Prediction
In November 2021, the Solana exchange rate was $250. Even the most optimistic forecasts did not assume such a growth in the coin’s price. With a market cap of $75 billion (according to CoinMarketCap data for November 2021), SOL broke into fourth place in the global cryptocurrency rankings. In May 2022, the cryptocurrency is in ninth place in terms of market cap.
The SOL price reached its peak in November 2021. In 2022, SOL was still unable to overcome it. In March, the cryptocurrency fell below $79 in the moment. Currently, the highest price for 2022 is $140. Then the cost of Solana rose sharply from late March to early April.
According to Trading beasts, the maximum price that SOL is able to reach in 2022 is $196.4. Gov. Capital gives the most optimistic forecast. According to their predictions, the price of Solana will increase from $448 (minimum) to $606 (maximum) by the end of 2022.
Crowd Wisdom estimates that the average value of SOL will be approximately $200 in 2022. Analysts emphasize that Solana developers still need to convince investors that there will be no more network hacks.
Let’s recall that a hacker attack on the Wormhole Bridge took place in February 2022 — a bridge that allows users to transfer their tokens from the Solana system to Ethereum and vice versa. The total amount of stolen funds amounted to $320 million.
Another problem is network outages. If Solana does not delay a new mainnet beta release, then its cost will start to rise. This is what Crowd Wisdom and CoinPedia analysts say.
One of the most pessimistic forecasts is given by TechNewsLeader — in their opinion, the price of SOL will be $112 by the end of 2022.
Conclusion
Although analysts’ predictions differ from each other, most consider Solana to be a promising cryptocurrency. After all, the cost of Solana gas is lower than that of Ethereum, and the transaction speed is more than 2.5 thousand per second.
What is your Solana price prediction? Feel free to share your price forecasts in the comments below!
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