What to Expect from SOL as Solana’s TVL Nears $14 Billion?

Currently, it sits in the third position after Ethereum and Binance Smart Chain (BSC). Recently, Solana has been hitting the cryptocurrency space with breaking news regarding several DeFi and NFT projects deployed on this blockchain.

Explaining Proof Of History

The reason why Solana has quickly climbed up the ranks of blockchains in the DeFi space is its efficient decentralisation mechanism involving proof of stake and proof of history. We are pretty well familiar now with proof of stake, but proof of history is a relatively new notion in the market.

Solana has leader nodes: they put timestamps on blocks in the form of hashes – which, in their turn, create a sequential temporality as each hash encrypts the events that happened since the previous timestamp and certifies the passing of a certain interval. After the leader node timestamps a block, it propagates the block’s hashed timestamp to the validator nodes, which can verify the hash and then add the block to the blockchain.

The intricate detail about it is that the timestamps allow the leader nodes to synchronise transactions with the validator nodes in smaller batches called entries. The validator nodes can verify the entries from different blocks and allow them to form blocks that will be confirmed with consensus later. This mechanism is a valid alternative to sharding and delegation of validator nodes that creates a throughput capacity of over 50,000 transactions per second.

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The biggest project launches on Solana

The native Solana token SOL has been responding quite vividly to the growth of liquidity locked in the Solana blockchain. It has recently reached a new ATH of $219.37 as per Bitfinex. The vivacious ascent of the cryptocurrency has been accompanied by rattling project launches on Solana.

In terms of decentralised finance, a key infrastructural Solana-based element is the Serum decentralised exchange that provides liquidity pools for cross-chain asset swapping. The one big distinction with Serum is that it offers an on-chain order book based on the Solana blockchain, while still offering the liquidity pool model. This distinguishes Serum from decentralised exchanges solely based on yield curves.

Another Solana-based DEX featuring an order book is Raydium. The presence of order books on Serum and Raydium creates interoperability between both these exchanges. As of writing time, cis the second Solana DeFi protocol by value locked with $1.77 billion.

Given the increasing regulatory pressure on centralised exchanges, the Solana-based DEXes can spring to new heights really quickly as the growing demand for trading volume will need satisfying. And that will surely give the SOL coin another boost.

And Solana has also been making serious buzz with its NFTs. One of them is the FTX marketplace that combines a centralised cryptocurrency exchange, an OTC service and an NFT marketplace. As for its affiliation with Solana, some of its NFTs have been minted on the Solana blockchain and can be purchased for SOL only.

As for NFT-only projects, Atlas Start deserves a special mention. It is a space online video game with a play-to-earn mechanic. This mechanic allows the players to earn Atlas Start NFTs representing some of the game’s artifacts and skins. Its team has recently released a limited FTX and Raydium-dedicated NFT series. The Raydium NFTs will be exclusively distributed among the liquidity providers on Raydium.

What to expect of SOL in the near-to-medium term?

Given the exceptional potential of the Solana blockchain and its state-of-the-art architecture, I would expect SOL to reach $340 by the simple analysis of the Fibonacci retracement on the SOL/USD chart. Speaking of the timeframe of that event happening, I believe that March 2022 can be the month by the end of which we will have seen this happening.

This is a fairly loose forecast, but the proven potential of this blockchain and the rapid expansion of the DeFi space and the growing popularity of NFTs, I strongly believe, can play to Solana’s advantage. In that case, the growth of the price of its cryptocurrency will only be inevitable.

Ethereum, BSC & Solana: Who Will Win the Race to Conquer the NFT Market?

This hardly comes as a surprise. Non-fungible tokens can represent any digital object, from artwork and collectibles to music, in-game items, and even personal data, and be easily authenticated via the distributed ledger, offering proof of ownership for their holders. This is the reason why the market is blooming with NFT platforms, marketplaces, protocols, and solutions, while retail investors, celebrities, artists, athletes, and businesses have dabbled into the exciting world of NFTs to harness its benefits.

However, in the heart of any decentralized product lies its core technology. It determines its overall stability, capabilities, and the quality of the user experience. In the case of digital assets, this is their underlying blockchain – and today we will compare the best blockchains for non-fungible tokens.

Ethereum: Largest and Highly Decentralized

Ethereum features one of the largest ecosystems and user bases among all DLT networks. It is highly decentralized, with nearly 4,000 full nodes validating the blockchain and an excellent history of resilience against internal and external threats.

With Ethereum, developers get access to numerous tools, artists get a chance to showcase their art to a big market of potential buyers, and investors get plenty of NFTs to choose from. Today, this blockchain hosts most collections, marketplaces, and dApps powered by NFTs.

However, the blockchain has its downsides, which center around limited scalability. Its ability to process only around 15 transactions per second (TPS) combined with massive user activity has led to heavy network congestion. As a result, transaction fees have been rising on Ethereum, with the average transfer costing $14.96 as of October 8, 2021. While Ethereum developers are actively working on upgrading the blockchain’s scalability with ETH 2.0, it will take many months until we see big improvements.

Binance Smart Chain: Going Low-Fee

Even though Ethereum excels in security, decentralization, and ecosystem activity, Binance Smart Chain (BSC) has managed to take advantage of its competitor’s limited scalability to gain traction. As BSC has the scalability of approximately 100 TPS, it features significantly lower transaction fees than Ethereum.

According to BscScan, a standard transfer costs $0.053, but users have to pay $0.137 and $0.423 for BEP-20 and smart contract transactions, respectively. In addition to improved scalability and lower fees, Binance Smart Chain has 3-second block times – compared to 15 seconds on Ethereum –, and features decent security.

On the flip side, decentralization is among Binance Smart Chain’s top weaknesses. In addition to being managed by Binance (which also operates the bridge between BSC and Ethereum), it only has 21 validator nodes, making it a highly centralized chain. Its thriving ecosystem has become a worthy competitor of Ethereum’s – however, what BSC lacks is decent NFT-related activity.

Solana: Young, Scalable & Secure

Solana is a rather new player in the NFT space. This highly scalable and high-speed blockchain – over 65,000 TPS and 0.4-second transaction latency – gained traction only a few months ago, but its non-fungible token industry is developing fast. According to its website, its ecosystem consists of over 120 NFT projects (out of a total of 423).

Due to its excellent scalability, the average transaction costs $0.00025 on Solana, which is by far the lowest among the three chains. It doesn’t have as many validators as Ethereum: over 1,000 nodes are responsible for validating blocks within its network. This allows Solana to maintain a high level of decentralization with limited risks of validators teaming up to gain control over the network.

Solana doesn’t sacrifice security to achieve high scalability and decentralization. Instead, the project has introduced multiple innovative features and functionalities – such as the cryptographic clock Proof of History (PoH), the mempool-less transaction forwarding protocol Gulf Stream, and the Turbine block-propagation protocol.

Summary: What Blockchain Meets Your Goals?

To sum up, all the blockchains we have explored serve as good options for NFT market participants. If you are OK with higher gas fees and limited scalability, you can leverage Ethereum to access the most popular NFT marketplaces and dApps. In case you want to cut your transaction costs and don’t mind increased centralization, Binance Smart Chain can be a good choice.

However, I believe Solana is the clear winner among the three. Even as a relatively new blockchain that only gained traction recently, Solana excels at all three important qualities of blockchains: cutting-edge security, a highly decentralized network, and excellent scalability.