Solana is the new home for dApps: should you buy SOL now?
Solana SOL/USD began in 2017 and launched in March of 2020 by the Solana Foundation. The Solana Protocol is designed to facilitate decentralized application (dApp) creation. The main goal of this is to improve the scalability through the introduction of a proof-of-history (PoH) combined with a proof-of-stake (PoS) consensus algorithm.
Solana has become very popular among investors over the past year as the value of a coin has risen from less than $1 to the $40 level today. The surge in interest is due to the fact that a lot of applications are being developed on its blockchain due to its high throughput. In fact, there are currently 157 projects launched on Solana.
But, this begs the question: is it too late to buy Solana now? Let’s take a look and potential catalysts to push the value of SOL even higher.
Should you buy SOL?
On May 12, three funds, Gate.io, Coin DCX, and BRZ, were set to put $60 million into projects that are built on the Solana blockchain in emerging markets.
On June 3, The Solana Foundation launched a $20 million fund to further the ecosystem’s expansion throughout South Korea with the blockchain fund known as ROK Capital.
On the next day, it was reported that the blockchain raised between $300 million and $450 million, which was showcased by a report on Friday by Decrypt. It states that Solana planned to close the round in March, but expanded it in response to the strong interest.
These investments will lead to an upgrade in the overall project, which has the potential to bring with it all of the projects currently running on the Solana blockchain. More users and developers that jump on board will lead to a lot more interest, liquidity, and general acceptance which will be essential for future growth.
Banking on an ecosystem
With literally hundreds of dApps being developed on the Solana blockchain as a response to its high throughput, the potential for continued growth is apparent. In the future, even Ethereum-based dApps could see value in switching to this blockchain or developing separate dApps that run on SOL as well.
When we take into consideration the fact that The Solana Foundation launched $20 million to fund South Korea’s ecosystem, and that they raised between $300 million and $450 million in funding, we can form an idea in our heads about what kind of innovation they could potentially bring to the table going forward, specifically by the end of 2021.
That being the case, at the current price of around $40, SOL could be a worthwhile investment. Taking a look at the chart shows strong support at around $25 so nervous investors could maybe buy half of their position at $40 and if it drops to $25 they can buy the second half to lower their average entry point.
Solana traded above the $50 level in May before the entire cryptocurrency environment sold off hard. But looking forward we could potentially see SOL recapture its highs once the ecosystem is improved in South Korea, and once the funds invested in the project actually start getting pumped into future innovations.
By 2022, we could even see its value sky-rocket to $100. This is due to the fact that many projects might end up using the Solana blockchain due to its various innovations and improvements over other blockchains. It could also gain widespread acceptance and hit the mainstream, which will boost its value even more.