The Rise of Solana: Why This Cryptocurrency is Poised to Hit the ETF Market
As the world of cryptocurrency continues to evolve, one coin is making waves in the industry: Solana. With its high-performance blockchain platform, fast transaction speeds, and low costs, Solana is becoming increasingly attractive to developers and investors alike. But what exactly is Solana, and why is it poised to hit the ETF market?
What is Solana?
Solana is a high-performance blockchain platform that provides fast, secure, and scalable decentralized applications (dApps) and cryptocurrencies. Unlike Bitcoin, which was designed as a payment system, Solana is built for high-performance blockchain applications. Its focus on fast transaction speeds and low costs makes it attractive for developers. As reported by Binance, as of July 31, 2024, Solana’s market capitalization is USD 84.15B.
Solana’s high-performance blockchain platform
Solana’s Value Proposition
The core value propositions of Solana are its high-speed and low-cost attributes. As a blockchain platform, it is scalable, processing up to 65,000 transactions per second (TPS), significantly higher than Bitcoin (around 7 TPS) and Ethereum (about 15-30 TPS). This makes it suitable for high-frequency trading, decentralized finance (DeFi) applications, and other use cases requiring fast transaction processing. Furthermore, it is highly cost-efficient, with the cost per transaction on Solana being very low, often less than $0.01. This affordability encourages users and developers to build and transact on the network.
Solana’s Operational Framework
Solana uses a novel consensus mechanism called Proof of History (PoH) in conjunction with Proof of Stake (PoS), enhancing security and decentralization while maintaining high performance. PoH is a cryptographic clock that provides a historical record proving that an event has occurred at a specific moment in time. This helps to order transactions and blocks efficiently, allowing nodes to agree on the time and order of events without having to communicate directly. Whereas PoS utilizes validators to produce new blocks based on the number of Solana tokens they hold and are willing to “stake” as collateral. Validators process transactions and secure the network, and they are rewarded with Solana tokens for their efforts.
Solana’s novel consensus mechanism
Investing in Solana through an ETF
In the U.S., no Solana-specific ETF is currently available. At present, only two issuers have filed for a spot Solana ETF: VanEck on June 27 and 21Shares on June 28. These filings are still in the initial stages, with no tickers or fees disclosed, and limited information available. However, as reported by Reuters, Cboe Global Markets filed a request with the U.S. Securities and Exchange Commission (SEC) to list ETFs tied to the Solana cryptocurrency, requiring the agency to make a decision by March 2025.
In Canada, the story is slightly different. 3iQ, a digital asset investment fund manager, recently announced that it has filed a preliminary prospectus with the securities regulatory authorities to launch North America’s first Solana exchange-traded product, the Solana Fund (Ticker: QSOL). The fund will allow investors to gain exposure to SOL in a simplified manner, in a fund structure that is eligible for registered accounts in Canada, making it a tax-efficient, long-term investment option.
Conclusion
As the cryptocurrency landscape widens and more offerings become elevated in investors’ consciousness, their availability as investible assets will likely increase. At this juncture, Solana is entering the forefront and will become the latest digital asset offering that investors can integrate into their portfolio. With its high-performance blockchain platform, fast transaction speeds, and low costs, Solana is poised to hit the ETF market and become a major player in the world of cryptocurrency.
Solana’s high-performance blockchain platform
