Since its launch in 2017, the blockchain network known as Solana has caused a stir in the cryptocurrency market. It was developed to address the scalability and speed problems that other blockchain platforms, like Bitcoin and Ethereum, were experiencing. Solana wants to process 65,000 transactions per second (tps), which is a substantial increase over the rates that other blockchain platforms that are currently processing transactions.
Solana has drawn a lot of notice recently as a result of its outstanding performance, particularly during the most recent crash of the cryptocurrency market. Solana’s value stayed largely stable while the value of the majority of cryptocurrencies dropped significantly, which has sparked a lot of discussion about the platform’s resurgence.
- This article will go over some of the factors that led to Solana’s comeback as well as what the platform’s future may contain.
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Describe solana
Solana is a decentralized blockchain framework created to support quick, safe, and scalable smart contracts and decentralized applications (dApps). Former Qualcomm software engineer Anatoly Yakovenko developed it with the goal of developing a blockchain platform that could process transactions swiftly while staying safe and decentralized.
Solana’s impressive transaction rates are made possible by the Proof of History (PoH) consensus algorithm. PoH compiles a historical record of every network transaction, which is used to confirm the legitimacy of fresh transactions. Solana can accomplish high throughput as a result of this without compromising security or diversity.
Solana’s return
Due to its outstanding performance during the most recent market crash, Solana has been getting acceptance in the cryptocurrency community. Solana’s value stayed largely stable while the majority of cryptocurrencies saw significant price declines, which has many people thinking that Solana might be the next big thing in blockchain technology.
Scalability is one factor that has allowed Solana to survive the market collapse. Solana is less prone to congestion and network delays because it is built to manage a large number of transactions. This indicates that Solana can continue to process transactions swiftly and effectively even during times of significant market volatility.
The cheap transaction fees of Solana are another factor contributing to its resurgence. Solana’s transaction fees have stayed low, in contrast to other blockchain platforms like Ethereum, which have been experiencing high transaction fees as a result of network congestion. Because of this, Solana has become a popular platform for programmers seeking to build dApps and smart contracts.
An increasing number of investors and developers have also been drawn to Solana because of its cutting-edge technology and vibrant community. In order to build a decentralized and scalable environment that can accommodate a variety of dApps and smart contracts, Solana has been able to establish itself as a platform that is dedicated to doing so.
What happens when you stake solana?
Staking Solana entails transferring SOL tokens from a digital wallet to a network validator server. The network’s security and reliability are maintained by validator nodes, which also check transactions. Stakers strengthen the security of the network by giving their SOL coins to validator nodes, and they are rewarded for their efforts.
On Solana, staking benefits are given out in SOL tokens and are based on the network’s inflation rate and the number of tokens staked. The rewards are split among the stakes according to the proportion of their staked tokens, with validators receiving a part of the rewards in exchange for their services.
Several factors make staking Solana a profitable investment option
High Rewards: With an annualized yield of roughly 8–10%, Solana’s staking rewards are presently among the highest in the sector. This implies that by holding SOL tokens and transferring them to validator nodes, stakers can generate a sizable passive income.
Low Risk: When compared to other cryptocurrency investments, staking solana is a comparatively risk-free investment. The staker retains ownership of the SOL tokens and is free to withdraw them at any moment. The validator nodes also keep the network’s security and stability, lowering the possibility of attacks and network disruptions.
Support the Network: By staking Solana, investors can help the network run smoothly and add to its expansion and advancement. Stakers contribute to the security, scalability, and decentralization of the network by transferring SOL coins to validator nodes.
How is Solana staked?
The procedure of staking Solana is simple and only requires the following actions:
Staking solana involves the purchase of SOL tokens, which are available on cryptocurrency exchanges like Binance, Coinbase, and Kraken.
Select a Validator Node: SOL token holders can select a validator server to whom they will assign their tokens. Stakeholders can select a validator node that suits their tastes after validator nodes are ranked according to their effectiveness and dependability.
Delegate SOL Tokens: By connecting their digital wallet to the Solana network and following the delegation steps, stakers can delegate their SOL tokens to the selected validator node.
Stakers can earn rewards in the shape of extra SOL tokens after the SOL tokens have been delegated. Regular payouts of rewards are made, and stakers are always free to remove their staked tokens and rewards.
