Solana has been one of the best performing cryptocurrencies in the year 2021. The predictions are in favor of Solana and it is expectable that this digital currency might continue to escalate and grow beyond our expectations in the coming time. Solana has been rising through the ranks of altcoins and has become the fifth-largest cryptocurrency in the entire world.
As per the report of coinmarketcap, the SOL’s market capital stands at US $500.20 billion. What makes it more interesting is that it is still growing and the investors are excited about how the technology of Solana is competing with market leader Bitcoin and Ethereum.
Though cryptocurrency is still new in the market, the interest of investors is growing every passing second despite its extremely unstable nature. There are today many crypto traders who are still not sure about Solana’s success and anticipate investing in this currency. For crypto trading, I look forward to using Bitcoin trading software like https://bitcoin-motion.cloud/.
Benefits and Drawbacks of Investing In Solana
Just like every other cryptocurrency, Solana also has some pros and cons.
● Speedy Transactions and Negligible Fees
Crypto supporters have a belief that Solana is Ethereum’s biggest rival. Ethereum can process 14 transactions every second (TPS), on the other hand, Solana can perform up to 50,000 transactions per second.
● Big Future Markets
At present, Solana owns the third-largest futures open interest that is the most applicable metric in spinoffs contracts. Regardless of its sharp jump in cost value in November, its present open futures interest detained its previous positions.
● NFTs and Smart Contracts
The NFT world has gone crazy over the entire last year. The NFTs have become a high escalating industry opportunity followed by epic sales accommodated by well-known digital artists. Leveraging this growing industry, Solana stepped into the market to share the non-fungible token option. SOL is receiving market share with Solanart, the non-fungible token marketplace operating on the network. One of the most common and biggest benefits for NFT zealots using this platform is its negligible fees and rapid transactions.
● Robust Institutional Attractions for Solana’s Ecosystem
Solana’s market capitalization is greater than the doubled value of Avalanche and Terra. The year 2021 has introduced itself with resilient proofs about SOL’s developing investor community. We all know that with improving investor’s adoption comes increased institutional adoption.
● Solana Is Not Much Decentralized
Some crypto supporters believe that there is a possibility that there are not many disadvantages of investing in SOL, but unfortunately, this is the biggest feature of cryptocurrency considered as the biggest con. The ETH network has more than 200,000 validators, but the SOL ecosystem only consists of 1,000 validators till now. The more the number of validators, the safer the network.
● Lesser Projects
Ethereum’s first-mover benefit means that the network has more projects than Solana cryptocurrency. Solana is entitled to have over 350 projects on its network that includes decentralized finance, non-fungible token projects, and gaming applications. When more investors hear about cryptocurrency’s speedy transactions and almost zero transaction fees, more new projects may prefer SOL over Ethereum.
● High Prices
Cryptocurrencies got fame in the year 2020 due to several reasons and of the many reasons was to utilize them as a windbreak against high prices. The majority of virtual currencies have a hard cap on how many coins will ever exist as a whole. But SOL has no secure supply of coins till today. The manufacturers of Solana have started enhancing the annual supply of Solana tokens by 8% which describes the inflation rate will be lesser by 15% until it is 1.5% and after that, it will stop to reduce beyond the point.
● Volatile Network
Solana’s investor community is still in its embryonic period. With a smaller and shorter track of record as compared to Ethereum, investors may not simply be convinced to invest in SOL over Ethereum. The cryptocurrency’s status took a hit when the Foundation created by Solana tweeted that its network is facing some sort of volatility. Since reliability is the prime step for investing in cryptocurrency and crypt investors majorly focus on it, this drawback of Solana sets it back from its biggest rivals in the market.
Solana is a remarkable and striking cryptocurrency. Though it has tough competition with thousands of cryptocurrencies in the market, it still stands separately by displaying uninterrupted progress and potential. But investors estimate the worth that they are safe to risk and after that jump into trialing with their lucks in crypto stashes.