Solana needs no introduction as one of the biggest gainers of the 2021 bull run. Since reaching all-time highs of $260, Solana has gained massive traction and widespread popularity in the crypto world, becoming the fifth-largest cryptocurrency by market capitalization. Its meteoric rise has drawn the attention of over 9 million holders and counting in no small part to the project’s utility and remarkable functionality.

SOL bottomed out at $9 last January 2023 after the dreaded “crypto winter” of 2022. However, the Layer-1 blockchain network turned on the jets by going on another incredible run to peak at $212 last March 2024, easily doing a 20x from its absolute nadir.

After nearly fading into obscurity in the fallout of the FTX debacle in 2022, Solana has roared back to become one of the leading blockchain networks in the industry. Solana uses a unique proof-of-history consensus mechanism that enables it to validate hundreds of thousands of transactions per second, while appearing to have finally shaken off its struggles with blockchain outages.

With so many people jumping onto the Solana bandwagon, many investors are wondering whether Solana remains a good investment even as it trades at the $150 mark as of publishing time, or whether to look elsewhere for more substantial gains. While we cannot provide financial advice as what you do with your investment capital is solely your decision, in this article, we’ll take a look at its potential in the near future.

What is Solana?

Solana is a Layer-1 blockchain network whose principal goal was to solve the blockchain trilemma of security, scalability, and decentralization.

The platform was among the crop of “Ethereum Killers” that had the throughput to process hundreds of thousands of transactions per second, while reducing gas fees to negligible amounts compared to its main competitor.

Solana has since grown its ecosystem, supporting a wide array of use cases such as smart contracts, decentralized apps (dapps), decentralized finance (DeFi), non-fungible tokens (NFTs), cross-border payments, and blockchain gaming.

The L1 platform uses smart contracts written using Rust, allowing developers to create dapps and run complex agreements on its network. Solana is significantly faster in terms of throughput and offers lower gas fees than its rivals. The native token of the Solana blockchain, $SOL, turned in a scintillating 12,000% gain in 2021 as it surged to its all-time high of just under $260, ballooning to a market cap of $75 billion. As of 2024, Solana sits at a $69 billion market cap, and its resilience is a testament to its strength as an L1 platform and as a financial investment .

Who created Solana?

Solana was first conceptualized in 2017 by software developer Anatoly Yakovenko until its proper launch in 2020. To date, it is an open-source project run by the Solana Foundation based in Geneva, Switzerland, while the infrastructure and blockchain was built out by San Francisco-based Solana Labs.

How does Solana work?

The Solana blockchain leverages a proof-of-history and delegated proof-of-stake hybrid protocol that enables it to process hundreds of thousands of transactions per second without requiring the centralization that is usually required to pull off such a feat. For instance, payment processors such as Visa or MasterCard run a vast network of computers to maintain processing speeds on par. Bitcoin, meanwhile, processes transactions much more slowly to retain its decentralized nature.

Since the ultimate goal of blockchain technology is to provision distributed, decentralized networks, Solana aims to combine the best of both worlds by attempting to process transactions at speeds similar to a centralized payments processor like Visa or MasterCard while hewing to the principles of decentralization as set forth by Bitcoin.

Its enhanced processing speed enables greater scalability since its environmental footprint and monetary costs of running the network’s systems are much lower.

The speed at which blocks are added to the Solana blockchain requires heightened security; this is where the proof-of-history algorithm comes to the forefront. Solana’s PoH algorithm timestamps each block using a cryptographic method generating a reliable ordering of transactions recorded to the ledger. This enables the near-instant finality of hundreds of thousands transactions per second, while maintaining the security of the Solana blockchain in the process.

The platform’s native $SOL token is staked and used as the collateral to process transactions on the network. This includes conventional buying, selling, and swapping tokens issued under the SPL token standard, analogous to Ethereum’s ERC-20 standard, as well as enabling participating in the platform\s decentralized finance ecosystem and minting non-fungible tokens.

What is the $SOL token?

Solana’s native $SOL token is categorized as a Layer-1 infrastructure token. These types of tokens underpin and enhance the functionality, efficiency, and security of the Solana network and the smart contracts that comprise its ecosystem. As a Layer-1 token, $SOL particularly seeks to pay the network transaction fees associated with interacting with apps on the Solana blockchain. $SOL holders can also stake their token with Solana validator nodes to earn passive income rewards, as well as transaction fees from Solana users.

$SOL tokenomics

There are currently 468,614,259 (80.1%) $SOL tokens in circulation as of September 2024, but there is no cap on the maximum supply.

The initial inflation rate for Solana is 8%, which is set to taper by 15% annually until 2031 to arrive at a final long-term inflation rate of 1.5%. The current inflation rate of Solana stands at 5.014%. The platform’s inflation indicates that non-staking $SOL holders pay stakers for delegating their tokens to secure the network. The inflation is offset by transaction fees, where half of each transaction fee is burned from the supply and the other is paid out as a block reward for the validator processing the transaction. This means that the greater the transaction volumes on Solana, the slower the circulating supply grows.

Who are the closest competitors of Solana?

Solana’s growth as a thriving Layer-1 platform with a rapidly expanding ecosystem has drawn comparisons to Ethereum, its primary competitor in the smart contract platform sector. Let’s take a look at the closest competitors of Solana as follows:

Ethereum. Ethereum is the leading smart contract platform by market capitalization, and the most widely-used blockchain for decentralized apps and DeFi by virtue of its first-mover status. While both blockchains use a proof-of-stake consensus mechanism, Solana improves on the format with its proof-of-history protocol. Solana also holds an advantage in terms of throughput and transaction fees; Ethereum can handle fewer than 15 transactions per second, and its gas fees can increase to absurd rates during times of high market congestion.
Avalanche. Distributed software platform Avalanche peaked around the same time as Solana as part of the “Ethereum Killers” that looked to solve the inherent scalability issues that Ethereum faces. Avalanche uses a proof-of-stake protocol paired with the blockchain’s own Avalanche Consensus mechanism for optimal scalability. The platform derives its success from the variety of TradFi companies tokenizing their assets on Avalanche, making it a leading smart contract platform for DeFi, gaming, and NFT applications. Like Solana, Avalanche offers low fees and near-instant transaction finality.
Polkadot. Polkadot is a multi-chain Layer-1 blockchain network created specifically to address the problem of blockchain interoperability through the creation of interconnected networks called parachains. By distributing the throughput across multiple parachains, Polkadot can handle a larger number of transactions than Ethereum. Polkadot’s ecosystem has steadily grown over the years, featuring a variety of DeFi, gaming, and enterprise applications, even if it hasn’t necessarily translated to major price movement in 2024.

$SOL price development

Solana peaked at all-time highs of $259 last November 6th 2021, at the height of the last great bull run. Since then, however, Solana spent most of 2022 on a massive decline as a result of multiple blockchain outages, overall bearish market conditions, and the collapse of FTX and Alameda Research, which were closely linked with the project. Solana bottomed out at just under $10 at the beginning of January 2023, until staging a remarkable comeback to end the year at $110—or around a 10x gain.That winning streak extended into 2024, with $SOL hitting a yearly high of $202 in March. Prices have since settled into the $140 to $150 range, with $SOL trading at $147 as of press time.

$SOL price predictions and forecasts

Let’s look at a quick rundown on $SOL price predictions and forecasts from 2024 to 2026 made by industry observers based on a selection of technical and fundamental indicators.

$SOL price prediction for 2024

According to Changelly, $SOL could see it top out at $155 by the end of the year, and remain firmly within the $140 to $150 range for the remainder. Coinpedia, on the other hand, is more optimistic of Solana’s prospects in 2024, tipping a maximum price of $350 and a minimum price of $90 for the remainder of the year.

$SOL price prediction for 2025

Changelly predicts that Solana could trade at a minimum of $140.55 in 2025 and max out at the $192.71 range, with a potential spike at the $244.87 mark if macroeconomic factors induce another bull run next year. Coinpedia pegs Solana to trade around the $209 to $580 range in 2025, with a maximum potential high of $750 should Solana outpace Ethereum in growth, and if it draws in more startups to build on its blockchain. On the other hand, if new regulations suppress prices, $209 could be the bottom for 2025.

Buy $SOL at Houdini Swap

$SOL price prediction for 2026

Changelly’s technical analysts predict Solana could trade between a low of $298.17 and a high of $357.19 at an average expected trading cost of $306, which would mean Solana could potentially break new all-time highs when 2026 rolls around. Coinpedia is more bullish with its 2026 estimates, predicting $SOL could trade between a low of $357.68 and a high of $886 at an average trading price of $624.

How to buy $SOL on Houdini Swap

Solana is among the top contenders as the next big thing in crypto. As evidenced by its remarkable turnaround and constantly growing ecosystem, Solana is a strong candidate to go on a major run in 2024 and beyond. If Solana manages to outpace Ethereum in terms of growth, $SOL could be an intriguing candidate to do anywhere between a 2x and an 8x from its current levels.

Houdini Swap offers SOL, as well 4000+ other types of cryptocurrencies, allowing you to buy, sell, swap, and trade between thousands of crypto pairs with unmatched privacy and security. Get in on Solana and experience the difference of trading privately with Houdini Swap today.
Ready to take the next step? Click the button below to buy Solana (SOL) on Houdini Swap!