A network that has mainly attracted young people, offering a relatively low-cost alternative to Ethereum that has made some more representative partnerships for the crypto universe during this bear market: do you know who we are talking about? That's right from Solana!
Many people expected that Solana would suffer irreparable damage due to its connection with the SBF of FTX, one of the initial investors in the network and which was even arrested this Monday. But the fact is that the worst of the consequences of the crisis may have already passed, and it continues. And this is mainly due to his jovial and collaborative personality.
Partnerships are the main way Solana extends its reach and bridges the gap between corporations and web2 users with web3. Through them, it has managed to remain in the spotlight, which also ends up reflecting on the price of the token. But before we delve deeper into Solana's relationships, we need to make sure you know everything about her.
In this content, we explain everything you need to know about its operation and key features; and then we'll talk about the main innovations and connections she managed to make in recent months. As it should be, we also highlight some risks related to Solana and what you need to be aware of, if you decide to invest in this token.
We suggest that you continue reading, even if you are not a big fan of this network.
Remembering, this content is purely educational and does not configure investment recommendation. Do your own research before investing in any asset, and be aware that every investment has risks.
An EVM network
The second layer networks benefit from the immutability and publicity of the information contained in other networks to create their own chain of information, having the first layer as a base. Solana is an EVM network, or layer 2 of the Ethereum network. But what does that mean, and how does such a network work?
Ethereum Virtual Machine
Ethereum is probably the most important network in the world today, as it offers programmers and users a wide range of possibilities from the use of smart contracts. These contracts allow a program to be written over the network and add an almost infinite layer of complexity to the data that is transmitted over the network.
An EVM is a program that manages to execute a contract, creating a kind of photograph of the state of the Ethereum network at a given moment and adding an abstraction layer between one block and another, where a series of actions and incidents can be added, and even the modulation of parallel networks, such as Solana.
Benefits to users
Thanks to this technology, Solana benefits from the security of the Ethereum code while being able to offer users an alternative that requires a lower cost for processing operations, without leaving much to be desired in the speed of transactions. And precisely because of this, it has become a viable alternative for people who don't have a lot of money available to invest, like most young people.
The youth blockchain
The financial factor is a very important one for the choice of the younger public, but it is not the only one that makes them interested in Solana. It's hard to say if she adopted a marketing strategy aimed at this audience and then managed to become a protagonist among them, or if her personality was adapting to create more identification with her users.
In fact, it is quite likely that a mixture of these two factors happened. The fact is that not only do the users of the network seem to be mostly younger than those found in other blockchains, but innovative and disruptive initiatives have been developed there, especially with regard to partnerships.
NFTs on Solana
Solana was born to the world in 2020, amid a moment of relative prosperity in the NFT market, which was experiencing a great moment. The collections launched in Solana were successful at that time and helped her to establish herself and solidify her personality.
The projects born in the network have been responsible for bringing innovative solutions and proposals. An example of this was the y00tz collection, launched in September, responsible for making Solana break records in transaction volumes, and also inspired a new model that ended up spreading to Ethereum and other networks, where users have to apply being admitted to the project according to their skills.
Innovations and partnerships
And to stay young and keep growing, you need more than charisma, identification with young people and a good collection of NFTs. In the blockchain universe, partnerships are fundamental and some have been signed in recent months, many of them precisely at Solana.
Thanks to it, the blockchain was able to prepare itself to offer disruptive innovations, which could be the beginning of an important leap forward in the integration between the real world and crypto-assets. Below we analyze some of the most significant of these and what effects they can have on the market.
A smartphone of your own
Cell phones have now become an indispensable accessory for most people. Through it we solve most of our daily problems and it is very likely that they will continue to grow in importance, while we become more and more connected.
But the integration between cryptocurrencies and cell phones is not so simple, mainly due to security issues. Most conventional devices have features that open dangerous loopholes, which can facilitate the action of bandits. That's why those responsible for Solana came up with the idea of creating an exclusive cell phone for integration with its network.
This innovation could be a big step towards the mass adoption of blockchain, considering the importance of devices in our daily lives. It is already known that it will be called Saga and will feature a 16.7-inch screen, 512 GB of storage and a Qualcomm Snapdragon 8+ processor. Pre-sales are expected to start in early 2023 and the device should cost around $1,000 in the United States.
Geolocation x NTFs
Another novelty that drew attention was the launch of a feature that enables the creation of NFTs linked to a specific geolocation. One of the possible uses of technology is the creation of a store in a specific point of a city. Development is done by a platform called Magellan.
The technology allows a new segment and model of NFT usage to develop. Among the ideas is the possibility for a sports brand to launch NFTs that can only be purchased by users who exercise daily, the sale or airdrop of tokens related to the presence at a specific event and the creation of gamified experiences such as a treasure hunt, among many others.
Own marketplace
Another announcement by Solana was the launch of its own marketplace so that users can access Dapps for the web3. The main difference would be the non-existence of charging fees, the platform being completely free. The network hopes to attract the interest of developers and the public and become a benchmark for users regarding their user experience.
If we consider the context of the joint launch of the smartphone itself, the GeoNFTs technology and the marketplace itself, it is noted that Solana is preparing for an important step, by creating an alternative, which would combine an experience to which users are accustomed, but offering features only available on the web3.
Validators with Google Cloud
One of the most important aspects when analyzing a blockchain is its decentralization. And this is mainly due to the number of validators it has. Ethereum, for example, has something around 200 thousand validators, being one of the most decentralized networks. Solana, in turn, would only have around 1,400.
That may be about to change with the offering of a new solution. Based on a partnership with Google, the network will be able to enable the creation of cloud nodes. This would facilitate the increase in the number of validators, with a relatively lower cost and more practical, generating more security for the network and its users.
In addition to those mentioned, there are other partnerships on the way, such as one between the Asics sneaker factory to create connected products, and another with Discord (not yet confirmed), which will create the possibility of custom roles (positions) linked to the network.
But not everything is perfect
With everything you've read so far, you may have been interested in making an investment related to Solana. Well, the decision on this is up to you, but it is important to consider not only the positives, but also the negatives.
Firstly, Solana has been down a few times due to attacks. It is still relatively vulnerable when compared to Ethereum, for example, because it has a smaller number of validators, among other reasons.
The SEC itself has already stated that only bitcoin is considered a commodity and the other blockchains always come with a built-in regulatory risk, so you need to be aware.
In addition, there may still be consequences related to the unfolding of the crisis involving FTX. That's right: Sam was arrested, but this story is still far from over.
Binding with the FTX case
It is known that the CEO of FTX, Samuel Bankman-Fied (or just SBF) was one of the initial investors in Solana and that the brokerage and its sister company — Alameda Research, would have an immense volume (about 700 million dollars in SOL tokens) that would be in a vesting period, but that will eventually be released in the coming years, which could have a negative impact on the token.
Considering the context, the lies, the manipulation of information and all the scams practiced by SBF, many people fear that there are other unknown risks, since he would have great influence on the network. So far nothing concrete indicates that something bad could be discovered, but it's good to stay tuned and monitor Solana carefully.
Do your research