If you've done a transaction on the Ethereum network lately, you'll know the price of ETH gas is killer and the network is slow. Solana (SOL) is working to change that, and many investors to herald it as the "Ethereum Killer."
After barely surviving on the peripherals of mainstream blockchain projects since it was launched, the Solana network is finally beginning to live up to the early hype.
It is now coming full square with the highest cadre of blockchain platforms like Ethereum, Binance Smart Chain, Polygon, and more.
It's no coincidence that among the most google cryptocurrency-related queries today centers on investing in the SOL token, the key fuel behind the Solana network.
Here's what to know about SOL and whether you should invest.
What Is The Solana Network?
For many years, blockchain technology was billed as the disruptive force that would transform the traditional finance industry. And despite several attempts by multiple startups to bring that narrative to life, a breakthrough never came. Not until the emergence of DeFi (Decentralized Finance).
Thanks in part to the smart contract capabilities of the Ethereum Virtual Machine, developers, for the first time, can now access tools required to build functional financial systems that are independent of intermediaries.
However, as the volume of transactions increased rapidly on Ethereum, difficulties such as the high cost of gas fees, scalability, and low throughput began to surface, investors had to seek alternatives.
Several blockchain networks have emerged for that purpose, but none more robust and flexible than the Solana network.
However, the capabilities almost went unnoticed to investors until recently when both DeFi and NFT programmers began a mass migration of sorts to the Solana network.
And with SOL tokens at the center of everything the Solana network does, investors have begun to seize the opportunity to invest in the assets.
What Makes Solana The "Ethereum-Killer"?
Since it was launched, Ethereum has constantly wielded a strong influence on the crypto space as the go-to platform for building smart contracts.
However, when it rose in popularity, traffic on the network became congested, and transaction fees soared.
Solana came into play geared with everything packed in Ethereum and more.
The platform, launched in April 2020 as a hybrid fusion of a proof of stake network and a proprietary proof of history consensus mechanism. A diversion from the proof of work model employed in platforms like Bitcoin, Ethereum, etc.).
The proof of stake consensus model allows Solana (SOL) owners to create validator nodes by staking SOL. This grants the right to add new blocks of transactions to the Solana blockchain and earn passive returns as rewards.
This approach helped lower the network's energy consumption requirements while also ensuring faster transaction speeds of up to 65,000 TPS.
A figure that greatly dwarfs the 10 TPS achievable by Ethereum.
How To Invest In Solana (SOL)
Of these options, Coinbase is the most convenient to use. And if you opt to use the Coinbase Pro version, you will enjoy cheaper fees with every transaction.
Small fees are quite significant as they can add up to substantial amounts quickly when it comes to cryptocurrency.
One other benefit you will get for choosing Coinbase is a $5 Bitcoin bonus for depositing $100 upon signing up, which might seem little but is no less generous as other platforms don't have this offer. Open A Coinbase account here >>
Buy The SOL Token
First, create an account on Coinbase.com.
Then, log in and navigate to your account dashboard, where you will locate the deposit button in the upper right section. To fund your Coinbase account, you can use any available options to move money from your bank account to the platform.
After depositing some funds, your next move should be to navigate to the trade section.
Then, select the market (currency pair) where you want to swap the SOL tokens (e.g., SOL – USD). Place a buy order and input how much SOL you plan to purchase. After that, hit the buy button.
Now, when you have your SOL, you don't want it lying around. Here are some of the possible ways you can reinvest the tokens.
Staking SOL tokens can be one of the best ways to invest in the project. The daily passive income may seem too small for some, but it does grow speedily into tangible revenue.
For beginners, staking is one of the easiest investment methods because it is easy to pick up and tends to be a more stable investment than trading it in the volatile market.
To start, get a wallet like SolFlare and transfer your Solana (SOL) into the wallet (you will be required to create a staking account). It's highly recommended you do this with a Ledger Wallet securing your keys.
After that, you will be presented with a list of validators. Select a validator, delegate your SOL holdings to them, and then wait on your investment returns.
The other option is becoming a validator.
On the network, validators are rewarded with SOL when they approve transactions.
Becoming a validator is an aspect that is the best fit for those with network operations experience (and some coding experience). However, if you are savvy with running a node, becoming a validator on the Solana blockchain might be the most rewarding option for you.
Is It Too Late To Invest In SOL?
In the ongoing battle of blockchains networks, the SOL token seems to be taking the bigger share of the spoils.
And with more and more NFT startups continuing to favor the network as the ideal place for building and scaling GameFi projects, the platform looks well-primed to continue to stand out from its competitors.
As such, most experts think that there are yet some untapped potentials to be unlocked in the network.
However, as with all crypto assets, it is advised to treat recommendation/analytical conclusions as speculations and use that as the basis for making your decisions.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.