The Coronavirus pandemic and paying the gas fee on the Ethereum blockchain are two things that are two poles apart. However, the struggle to overcome both problems was the same. And that’s exactly where Solana comes into the picture. In fact, crypto billionaire Sam Bankman-Fried Solana named the next big blockchain of 2022.
In particular, Solana promises to deliver the best of Ethereum, but faster and at a fraction of the cost. However, it is important to note that 2021 also saw a significant surge in meme coins such as Dogecoin and Shiba Inu. While these coins received a lot of attention and attention, Solana remained relatively under the radar.
A look at the price trajectory
Solana gained quite a bit of notoriety as an “Ethereum killer” when it climbed from a cheap $1.5 to $230 in November 2021. At the time of writing, the coin was trading at $96.51. The bears seemed to have taken the lead for the time being. If SOL fails to bring in demand, the coin could fall further to its month-long support of $86.54.
However, if bulls take the win, the token could move high to hit a new resistance of $122. This would be one area where SOL could see investors go long. However, for an ongoing rally, $140 needs to be flipped into support. After that, the token may move up to face its four-month resistance at $172.
On the attached chart, the RSI and MACD favored the sellers. Nevertheless, consolidation in the press time price range cannot be ruled out.
Really an Ethereum Killer?
While Ethereum is slowly moving towards Proof of Stake, Solana has been using Proof of Stake consensus along with Proof of History from the start. That is, Solana is very fast and can process about 50,000 transactions per second at an average cost of $0.00025 per transaction.
In addition, smart contracts in Solana are read-only and stateless. There are currently about 400 projects on Solana. Interestingly, it has a great community of investors and developers. In fact, the founders and collaborators are very vocal and have a high interaction with the users of SOL.
All this is to say that developers have considered Solana for its technical sympathy. For example, at the time of writing, the total value locked onto Solana was $7.86 billion, with more than 50 decentralized applications built on it. This is a sign that the blockchain has huge growth potential and that investors believe in it.
Care about gas costs
While the Ethereum network has tried every trick in the book to scale better, the gas fee remains a hurdle. This is one of the main reasons why a large number of developers switched to the Solana blockchain in 2021. At the time of writing, Ethereum’s average gas fee was 43 gwei, while Solana’s was only $0.00025 per transaction.
Not all good?
While everything seems like a fairy tale to Solana, it’s important to remember that Solana isn’t as decentralized as it should be. In fact, it is very difficult to become a validator on the Solana network. The barrier to entry is very high. In addition, most coins are also kept in just a few accounts of the founders, team and VCs. Surprisingly, the public owns a very small percentage of coins.
Not to mention, Solana does not have an explicit step-by-step plan. For this reason, investors willing to go long may consider viewing the project with more skepticism. For example, the development activity looked a bit complacent at the time of writing. For now, a rally straight to $200 cannot really be expected. Retail SOL buyers can call accordingly.
This post How far can the ‘Ethereum killer’ tag go in favor of retail SOL buyers in 2022?
was published first on https://ambcrypto.com/how-far-might-the-ethereum-killer-tag-go-to-benefit-retail-sol-buyers-in-2022/