In Crypto today for counselors, Josh Olszewicz From the Canary Capital provides a deterioration of Solana – where it came from, and what is happening today.
Then, then, Alec Beckman From Psalion answers questions about Solana’s history and consideration for investors to ask an expert.
Rise by Solana: Resilience, Regulation, and the Adoption Way
Solana appeared as a terrible player in the Blockchain arena, showing the amazing -amazing stability in the face of significant challenges. Despite setbacks such as FTX collapse and network outages, Solana has again rebound, with this native token, Sol, who has experienced a huge growth since its lows in late 2022. The platform appeal has been staying with these developers, the cheap transactions, which positions it as a preferred choice for both developers and users. However, concerns about centralization continue, arising from the network’s hope of a limited number of validators and high hardware requirements. While Solana operates with a proof-of-stake consent mechanism, which offers scalability and staking yield, the legal sorting of SOL token remains a controversial issue in the United States, with the Securities and Exchange Commission to provide a specific guide.
Amid the global disruption of the covid-19 pandemic, Solana labs launched the Solana blockchain and its native token, Sol, in March 2020. Backed by leading venture capital firms including A16z, jump, multicoin capital and polychain labs, as well as the now-defunct alameda research, the platform quit High-speed, low-cost transactions, offering a compelling alternative to legacy layer 1 protocols such as Ethereum (ETH), Binance Smart Chain (BNB) and Tron (TRX). Competing platforms, such as Avalanche (Avax), Polkadot (DOT), and near the protocol (close), followed later that year, intensified the race for the intelligent dominance of the contract.
Solana operates with a proof-of-stake mechanism, allowing users to secure the network and participate in management through staking tokens. Unlike bitcoin’s proof-of-work, proof-of-stake networks like Solana rely on validators-creatures entrusted to maintaining ledger and processing transactions. Solana’s management is slightly influenced by voting with a stake stake, similar to a representative democracy, in which validators with the most staked assets have the most influential.
Solana’s early momentum was fueled by endorsements from Sam Bankman-Fried and the FTX exchange now, describing Solana as a faster and more measured alternative to Ethereum. Bankman-fried creatures invested in the ecosystem and built significant infrastructure around it. However, the collapse of FTX and Alameda research in late 2022 revealed risks to the centralization of the material. Both companies will hold significant positions in Sol, and their losses trigger a sharp seller, raising questions about the token distribution and resilience of the ecosystem.
In 2023, Solana faced further investigation when the SEC, under Chair Gary Gensler, identified Sol as a potentially unregistered security in the suits against Binance and Coinbase. Robinhood subsequently removed Sol, causing the asset to own an intense low, which was exceeded by the FTX’s collapse. However, Sol appreciated nearly 700% between October 2023 and March 2024, reflecting stable retail demand and increasing developer activity despite the ambiguity of regulation.
Water increase regulation began to move in late 2024. Robinhood announced Sol in November, citing the emerging guidance of customer policy and interest. In early 2025, the SEC, under the newly appointed seat Paul Atkins, removed its case against Coinbase and stopped the proceedings against Binance. While Solana’s classification remains unresolved, the industry expects a modified framework that may allow blockchain projects to be considered “enough decentralized,” thus obstacles to security law. The recent approval of Crypto-based ETFs is further prompts growing regulation and may provide a path to greater institutional involvement.
Despite previous setbacks, Solana appeared as a leading platform for retail activity, especially in the rapid growing sector of coin and NFT memes. Phantom, a purse in self-cust built for Solana, reported 10 million monthly active users in 2024, more than 850 million transactions, and 24 million mobile app downloads. A well -known catalyst is the launch of January 2025 of the Trump coin, which Sol’s co -starring at a full time of nearly $ 300.
Sun -day transactions
Source: Bloomberg terminal
Although network reliability concerns have been ongoing, with seven temporary blockchain outages since 2020, Solana has continued to rank the leading blockchains in terms of day -to -day active users, transactions volume, decentralized exchange activity and generation fee. However, in decentralized finances and real-world asset applications, the Ethereum remains dominant, with Solana still walking on major metrics, including the total amount locked and circulating stablecoins.
Comparison table
Source: https://www.stakingRewards.com/
From an investment perspective, SOL has a history exchanged as a high beta asset associated with Bitcoin, resembling the behavior of equality such as approach. Since late 2024, some companies have begun folding the Playbook approach, to raise capital to capture Sol for their balance sheets. While this may increase short-term demand, long-term effectiveness depends on prolonged network adoption, regulation clarity and institutional trust.
– Josh Olszewicz, Portfolio Manager, Canary Capital
Ask an expert
Q. Why are investors interested in Solana?
Solana stands for high speeds, low fees, and growing ecosystems:
- Performance -It can handle up to 65,000 transactions per second with the end of seconds, making it perfect for real-time applications such as trading, gaming, and payment.
- Cost efficiency -The fees are constantly under one cent, making it appealing for retail use cases.
- Ecosystem growth -The platforms like Jupiter (Defi) and Helium Mobile (Telecom) expand real-world use.
- Big-name backing -The partnerships with Visa and Shopify adopted Solana’s position as a serious layer-1 contender.
Through an honest community and strong momentum, Solana appeared as a high-beta play in the availability and scalability of the blockchain.
Q. What should investors watch when reviewing Solana?
Investors should observe both technical and ecosy system foundations:
- Network stability – Following a history of outages, Solana introduces Fireredancer, a new validator client designed to enhance reliability and throughput.
- On-chain metrics -Sun -day active users exceed 1 million. Defi TVL has recently exceeded $ 4 billion, driven by strong NFT volume and app use.
- Tokenomics – SOL has a decline in inflation schedule and high staking participation (~ 70% of the supply is staked).
- Regulatory momentum -ETF applications from Vaneck and 21shares are pending, and any US approval will be a significant milestone and create institutional flows in Solana.
Monitoring the activity, use, and upgrading activity is key to understanding Solana’s maintenance.
Q. What are the biggest risks of investing in Solana?
Solana carries highly reversed potential, but also significant risks:
- Previous inability – The network faces many outages between 2021 and 2023, which is offensive to investor confidence. Stability has improved, but remains under thorough investigation.
- Pressure regulation – Sol was mentioned in the SEC suits against Coinbase and Binance in 2023 as a possible unregistered security.
- Centralization concerns – A significant portion of the tokens went to the insider, and the validator set was significantly less decentralized than Ethereum’s.
- Volatility of the market -Solana is closely tied to speculative trends, such as Memecoins and NFT Booms, leading to sharp price change.
- Institutional forms – A significant increase in institutional building takes place in the Ethereum blockchain.
For all its changes, SOL has risks driven by both the basis and momentum of the narrative.
– Alec Beckman, Vice President of Growth, Psalion
Keep reading
- Stifel Financial Corp. Greenlight advisors to invest in Bitcoin for clients..
- US SEC Commissioner confirmed Peirce to include banks Crypto services.
- Discover how nearly 100 crypto exchange ranks in the most trusted industry risk assessment covering security, compliance with market regulation and quality: CoinDesk’s latest benchmark rank.
