2021 has been a successful year for many altcoins. Among the new stars of the market, Solana deserves special attention. The SOL coin rose by 10,000% and reached an all-time high of $256 in early November. After that, the price of the coin began to decline. Is it worth it now to buy Solana on LetsExchange for the purpose of investing?
What is Solana
The Solana blockchain protocol was created to simplify the use of the DeFi system. The platform also supports non-fungible tokens, which is extremely important in the face of the growing popularity of this asset class.
Functionally, Solana resembles Ethereum, but has significantly higher throughput and energy efficiency.
Solana’s blockchain architecture uses Proof-of-Stake (PoS) and Proof-of-History (PoH) algorithms. PoH or decentralized clock makes it easy to synchronize transactions. The combination of these algorithms reduces the cost of transactions and ensures high scalability of the system.
Now Solana claims to be the fastest growing decentralized platform. Over 850 projects are already being implemented on the platform. It supports smart contracts, decentralized applications and games. Solana looks very promising and analysts agree that this platform can eventually become a strong competitor to Ethereum. Then why did the price of SOL fall?
What happened to SOL
After reaching a historical maximum, a correction began and it was expected that after its completion, the uptrend would continue. The prospect of reaching the $400 mark by the end of 2021 looked quite realistic.
However, the market decided otherwise. The collapse of Bitcoin has traditionally provoked the general fall of the cryptocurrency market, but this is only part of the problems that Solana faced.
The overall bearish market dynamics was exacerbated by a series of DDoS attacks and this shook investor confidence. Yes, the blockchain stays online, but its performance plummets. Grayscale’s report indicates that the decrease in network speed is due to vulnerabilities in the technology that Solana uses.
However, experts believe that the situation will soon change and the coin will begin to rise in price again.
Competitive advantages of Solana
One of Solana’s greatest strengths is its ability to seriously compete with Ethereum. The network provides the ability to host more complex smart contracts, and this is another significant advantage over the main competitor. The total blocking of the network covers over 40 decentralized applications and exceeds $11 billion.
In 2021, SOL entered the TOP 10 most valuable cryptocurrencies and still holds positions in the fifth line of the rating. Activity in Solana’s portfolio is growing steadily. In six months, the network’s TVL has grown 15 times, and the number of active users of platform-based dApps is about half of Ethereum users.
Solavna recently partnered with Forte and Griffin Gaming.It is expected that the result of such cooperation will be new integrated solutions for the gaming economy.
Prospects for SOL in 2022
Experts believe that SOL has good potential. A DDoS attack is an extremely unpleasant event, but it is possible that this is done intentionally before the next wave of growth.
The platform uses a unique PoH algorithm that is more efficient than PoS. The main task of the network is to fix security problems and as soon as the team manages to solve it, growth will resume. Solana swap exchange at $260 and above is a very real possibility in the first half of 2022.
In the coming years, SOL could break the four-digit barrier fairly quickly. The current price of the coin is high enough to be of interest to traders and is still quite affordable for long-term investment.
We remind you that investing in any cryptocurrency is associated with high risks. Before making a decision, study the features of the coin you are interested in and conduct your own market research.