Despite its fairly recent launch, the Solana blockchain has accomplished several significant feats in only a few years. These feats include:
The inspiring factor behind this incredible user growth and overall network performance is the several real-world use cases of the Solana blockchain, which is the focus of this article.
Why is the Solana Blockchain Called the Ethereum’s Killer?
Blockchain technology has recorded continuous and significant growth in recent years, along with its various use cases. The most notable use case is Decentralized Finance (DeFi), with real-world examples being decentralised applications (dApps) and decentralised exchange platforms like Metamask, Uniswap, Cryptokitties, SocialX, etc., and NFTs as you can find on platforms like OpenSea.
The massive popularity decentralised finance enjoys has also inspired the launch of a wide range of games, DeFi applications, and NFT projects on the blockchain by developers. However, the fact that most of these applications run on Ethereum poses a challenge as Ethereum currently struggles to keep up with the high demand.
Solana comes in to tackle this drawback with an open-source project that deploys a high-speed, permissionless layer-1 blockchain. It is highly functional and scalable, processing significantly more transactions per second at much lower costs to solve Ethereum's scalability issues.
What is Solana?
Solana is a layer-1 blockchain developed to support the next generation of decentralised applications by leveraging new technologies. Solana uses a novel consensus mechanism known as Proof-of-History, enabling it to process transactions instantly, at significantly lower costs than Ethereum, and with much higher throughput.
Due to its unique mechanism, Solana has become a popular choice among developers looking to build decentralised applications and blockchain technology’s end users generally. Proof-of-history allows Solana to process thousands of transactions per second without needing scalability solutions. The platform is highly scalable, secure, and decentralised, and can support thousands of nodes without negatively affecting throughput, unlike Ethereum and other competing blockchains.
Finally, SOL, the native token of the Solana ecosystem, serves as a means of paying transaction fees and staking.
Real-World Use Cases of the Solana Blockchain
Solana is home to several projects that take advantage of its scalability and flexibility. Developers have been developing creative ways to use the blockchain, increasing the use cases for every end user. Here is a list of some of its use cases.
Decentralised Finance (DeFi) Solutions
Decentralised financial (DeFi) solutions provide a packed variety of online financial tools that rid you of the need for traditional banks. DeFi solutions around you include exchanges, Decentralized Cryptocurrency Exchanges (DEXs), digital wallets, and automated financial contract systems. These solutions help you to streamline your financial transactions and afford you more control over your assets.
Orca and Serum are Solana-based DEXs that allow non-custodial trading of cryptocurrencies. Solana also powers stablecoins like Saber, which provide users with a liquid option for cross-cryptocurrency margin trading.
Non-Fungible Tokens (NFTs)
Solana is an increasingly popular choice among NFT creators due to its unique features. So far, the blockchain has recorded over 21 million NFT mints, making it one of the most preferred blockchain platforms for NFT use cases. Moreover, Solana's new source wallet plans to introduce executable NFTs, making it even more appealing to creators and collectors alike. Solana's NFTs are unique as they are not EVM compatible and are programmed using Rust.
Also, the Solana blockchain facilitates the creation of NFT marketplaces, which enable creators to display their NFTs for sale. While there are not many NFT marketplaces based on the Solana blockchain available at present, Solana remains a highly favoured choice for the development of NFT marketplaces. This blockchain platform provides the benefit of significantly low network congestion.
Solana has several well-known NFT marketplaces, such as SolSea, Solanart, and DigitalEyes. Solanart enables users to trade, collect, and search for NFTs, while SolSea lets creators embed their licenses while minting NFTs. DigitalEyes showcases popular collections like Frakt and Solana Monkey Business. OpenSea, the world's largest NFT marketplace, recently announced its support for Solana-based NFTs.
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Chainers, Thug Birdz, Solana Monkey Business, and Degenerate Ape Academy are some of the famous NFT projects on Solana.
Decentralised Lending Protocols
Decentralised pending protocols are another real-world use case of the Solana blockchain. Users can leverage Solana's decentralised lending protocols to deposit or lend funds over the Solana blockchain. An example of such a protocol is Solend. It is an algorithmic protocol that operates decentralised on Solana, allowing users to lend and borrow assets while earning interest on their deposits.
Play-2-earn Gaming
Solana also enables Play-2-Earn systems in games, meaning players can earn cryptocurrencies and NFTs while playing. Solana supports several popular games, including multiplayer worlds such as Chainers and Aurory, as well as survival-puzzle games like Naga Kingdom.
Decentralised Autonomous Organizations (DAOs)
Solana's benefits could facilitate using blockchain for developing Decentralized Autonomous Organizations (DAOs). With its high transaction throughput and minimal transaction fees, Solana meets the ideal requirements for DAOs.
The Solana ecosystem currently has 140 DAOs, where every member has an active role. MonkeDAO is an example of a DAO in the Solana ecosystem. This DAO project collaborates with Solana Monkey Business and aims to provide value to community members through community-powered projects.
Scalable and Fast Global Payments with Zero Middlemen
Solana's payment processing technology enables decentralised payments to be supported on a massive scale, processing a large number of transactions quickly and affordably. With Solana Pay, developers can access a powerful toolkit to integrate high-speed payment capabilities into their applications, similar to those used on Wall Street. The toolkit ensures that auditability and confidentiality are maintained as required.
Solana's payment tools enable Web3 and crypto projects or businesses to leverage the blockchain's power at a rate comparable to traditional payment networks without the need for intermediaries and ensuring decentralisation. The cost-effectiveness and immediate settlement of transactions offer various possibilities, from on-chain rewards to loyalty programs.
A good example is ASICS, a famous Japanese brand for athletic shoes. In November 2022, the shoe brand introduced a pioneering brand loyalty program on Solana. The company utilised the scalability and usefulness of blockchain technology to create loyalty programs, which allowed them to be practical and innovative in achieving their core business objectives.
ASICS collaborated with Solana to combine physical running shoes with an NFT loyalty badge that customers could own. The loyalty badge presented a unique value proposition and could be collected, sold, or traded. Additionally, ASICS took advantage of Solana's open-source platform and low environmental impact, which made it easier for the team to implement their loyalty program without significant development efforts or negative environmental impact.
Permissioned Environments Made for You by Solana
Solana is an open-source blockchain, which may lead to doubts about its suitability for specific projects or businesses. Nevertheless, the Solana Foundation has recently launched Solana Permissioned Environments (SPEs) to cater to companies with specific requirements.
Deploying SPEs involves the creation of a customised Solana Virtual Machine that meets the specific requirements of each business. This ensures a dedicated environment using Solana protocol's advanced technology while maintaining its security, scalability, and decentralisation features. To ensure complete control of their Solana environment, companies can tailor it according to their needs by implementing features such as geofencing nodes, network authority, and security and compliance measures.
The Pyth Network, as the first SPE in Solana's framework, was created specifically for Oracle services. Using the Solana Virtual Machine, Pyth can connect to external data sources, making it an essential aggregator for facilitating real-world smart contract execution.
Pyth's need for swift data processing and minimal latency is seamlessly met by Solana's high-throughput infrastructure, which aligns perfectly with its requirements. The combination of Solana's robust security model and Pyth's dedicated Oracle services ensures secure and reliable data delivery for smart contract execution.
In Closing
The novel Proof of History consensus mechanism, lightning-fast speeds, and low costs make the Solana blockchain an appealing option for blockchain technology users. As a result, this blockchain's use cases and popularity are ever-increasing, providing developers with more opportunities to create life-changing solutions. In short, there's a Solana solution for everyone!
