Solana is a layer-1 blockchain that runs on a combination of proof-of-stake (PoS) and proof-of-history (PoH) models. This combination allows Solana to conduct 50,000 transactions per second (tps) with an average cost of $0.00025 per transaction and a sub-second finality, meaning it takes less than 1 second for transactions to become irreversible.
To put this into perspective, Ethereum can only do 15 tps with gas fees reaching up to $30-$120 on average. Moreover, it takes a minimum of 7 confirmations to become valid, which takes roughly 2 minutes if the chain isn’t congested.
Solana was founded in 2017 to solve the current problems faced by large blockchains, especially in the areas of speed, affordability, and scalability. It is currently managed by the Geneva-based Solana Foundation.
Top Projects in the Solana Ecosystem
Table of Contents.
- 1 Top Projects in the Solana Ecosystem
- 2 How Does Solana Actually Work?
- 3 What Are The Uses of SOL?
- 4 Why Are Crypto Projects Utilizing SOL Blockchain?
- 5 SOL Use Cases For The Crypto Holder
- 6 Solana – SOL Wallets
- 7 How to Buy SOL in the Philippines?
- 8 Things to Consider About SOL
Serum is a DEX made to bring down the cost and increase the speed of permissionless token swaps.
Raydium was built to be the automated market maker (AMM) and liquidity provider for Serum. It also functions as a gateway for projects interested in tapping the Solana and Serum platforms.
- Star Atlas
Star Atlas is a space-themed, strategy metaverse game set in the distant future that uses Unreal Engine 5’s Nanite, giving it breathtaking graphics that separates it from other blockchain games of the same category.
The Render Network is a network built to harness the power of GPUs and create a decentralized economy to render decentralized games, metaverses, and other digital creations.
How Does Solana Actually Work?
Solana uses the PoS consensus mechanism, combined with a mechanism developed by its creator, Anatoly Yakovenko, called PoH. But to appreciate the efficiency of these two systems, we must compare them with other consensus mechanisms like proof-of-work (PoW), which is currently being used in Bitcoin and Ethereum.
PoW makes a blockchain platform more secure and decentralized by creating blocks, which can only be made by solving complex mathematical programs. Unfortunately, this model consumes so much electricity and has limited on-chain scalability.
PoS solves the issues of excessive power usage and network congestion by eliminating the reliance on computing power and replace it with staking power. In other words, mining rewards in PoS are proportional to the number of coins staked as opposed to the hash rate generated.
Solana introduced PoH to further boost the speed of its network by creating timestamps for each transaction, which immediately verifies clock time. Each transaction’s clock time can be verified without waiting for other nodes to agree, significantly speeding up the process of the whole network.
What Are The Uses of SOL?
SOL is primarily used to fuel the Solana ecosystem, where any transaction conducted on-chain requires a small amount of SOL to be paid. SOL can also be used to stake as part of its PoS consensus mechanism.
Why Are Crypto Projects Utilizing SOL Blockchain?
Solana’s incredible 50,000 tps and $0.00025 cost per transaction allows decentralized applications to leverage the blockchain’s speed and affordability, which helps them serve their users at their full, unhindered capacity, unlike in ETH where they usually face bottlenecks. This is especially important when running applications that require high tps like games and metaverses.
Composability is an attribute of blockchains that allows different protocols with various use cases, to be interoperable, unlocking new opportunities. DeFi activities, for instance, rely on composable money legos, the combination of different protocols like Aave, Yearn, Curve, etc to offer users the highest yields possible.
SOL Use Cases For The Crypto Holder
SOL can be used for staking to earn passive income by simply transferring tokens on a wallet that supports staking, creating a stake account, choosing a validator, and delegating the stake.
SOL can be used to purchase or mint NFTs on Solana marketplaces like Solanart, DigitalEyes, Solsea, Metaplex, Magic Eden and many more.
SOL tokens can be utilized to create passive income from DeFi transactions on Solana-based platforms like Serum, Sunny Aggregator, Raydium, Mango Markets, and many more.
Solana – SOL Wallets
List of Solana Web Wallets
How to Buy SOL in the Philippines?
You can purchase SOL from Binance through P2P. This is the simplest out all the options right now. Here are the steps:
- Log in or register to Binance
- Go to its P2P page
- Find a seller of USDT for your PHP
- Transfer USDT from Binance P2P to Binance Spot
- Find SOL/USDT Pair
Here is our step-by-step guide to buy crypto using Binance P2P: How to Use Binance P2P to Buy Bitcoin, USDT in the Philippines
Things to Consider About SOL
Solana has solved two of the major problems faced by Ethereum: the slow speed and high costs of on-chain transactions. Moreover, its high composability has also made it more appealing for DeFi projects. Many crypto proponents have sworn by the mind-blowing developer talent building in the Solana ecosystem. However, note that many critics have also questioned Solana’s decentralization, considering that the blockchain was allegedly shut down due to network overload last September 14.
This article is published on BitPinas: Solana Guide and Usecases | How to Buy SOL in the Philippines