Market Meditations | April 12, 2021
What is it?
Why is it so bullish?
All answered for FREE in today’s Solana ($SOL) Guide.
Read, enjoy and share with your network. Let’s all build generational wealth together.
Crypto. We managed to avoid a Bitcoin correction over the weekend and Monday is looking bullish. No one can be blamed for getting a bit distracted by some BNB action today. More on this later.
Legacy. Technology shares led U.S. stocks lower before earnings and an influx of bond supply that loom as speed bumps to a roaring rally.
A step by step on how to open an account
Deposit and withdraw funds
Place a buy or sell order and stop loss
Pay Attention to Solana
Today we’re going to review and help you interpret Solana, a project that’s generated a significant amount of hype recently. The Solana token $SOL currently sits at #20 behind VeChain with a $7.93B market cap. You might ask, however:
Is Solana important for the cryptocurrency ecosystem?
What problem is the project solving?
Is it something I should research more about?
Let’s take a look at the answers in this article.
Solana was founded in 2017 by Anatoly Yakovenko. Yakovenko played a pivotal role in the development of technology found in smartphones today. The rest of Solana’s team consists of employees from the likes of Apple, Microsoft, Google, and Dropbox.
The project has become even more popular recently due to vocal support from FTX and Alameda Research Founder Sam Bankman-Fried who built Project Serum on the Solana blockchain. Check out my Podcast with Sam if you’d like to learn more.
What is Solana’s origin story?
Described as having experienced a revelation during his self-induced caffeine dream, Yakovenko realized that one key flaw of all crypto blockchains is that there is not a singular trusted source of time.
Put simply, transactions are not time stamped which leads to inefficiency.
Leveraging his 12 years of technical experience with Qualcomm, Yakovenko began working on Solana before going on to raise $25M for the project.
At the heart of Solana’s blockchain is a decentralised clock known as Proof of History that aims to reduce the inefficiencies present with other blockchains. More on this later.
So What is Solana Exactly?
Solana is a fast, secure, scalable crypto blockchain that supports smart contracts and decentralized applications. Yakovenko’s goal was to create a trustless and distributed protocol to democratise the financial world by solving for scalability and inefficiency issues found in other chains. Solana’s recent claim to fame among traders is the narrative of a “cheaper and faster” Ethereum.
Solana’s competitors include the likes of Ethereum, Polkadot, Cosmos, Binance Smart Chain, and Cardano to name a few. There are three factors that differentiate Solana:
1️⃣Speed. Solana’s transactional capacity rivals that of the Internet. More specifically, it creates a block every 400 milliseconds enabling 50k transactions per second (TPS). Compare this to other chains: Bitcoin at 7 TPS, Ethereum at 30 TPS, Binance Smart Chain at 300 TPS, Cosmos at 10,000 TPS, etc.
2️⃣Scalability. Scales as a L1 Blockchain at the rate of Moore’s Law. More simply, Solana’s processing speeds double every two years without the need for integrating complicated L2 solutions that compromise security and stability. Whilst it costs ≈ $300,000 for every 1 million transactions, Solana’s cost for 1 million transactions is an astounding $10.
3️⃣Security. Solana has over 350 network validators. Anybody can be a network validator with no minimum staking requirements.
There are 8 core features that enable Solana’s incredible speed, scalability, and security. They include Proof of History, Tower BFT, Turbine, Gulf Stream, Sealevel, Pipeline, Cloudbreak, and Archivers. We’ll focus on the 3 most significant ones in this article.
1️⃣Proof of History
Problem: Other blockchains do not timetsmap transactions, creating inefficiency.
Solution: Solana’s “Verifiable Delay Function” allows you to create historical records proving that an event occurred during a specific moment in time. It’s a decentralised clock that allows you to timestamp transactions.
Why It Matters: It allows the system to more easily track transactions and order events sequentially thereby reducing the inefficiency.
Problem: With other blockchains, runtimes are generally single threaded (this just means one contract at a time modifies the blockchain state). This leads to latency.
Solution: Solana’s Sealevel feature makes it possible to identify all non-overlapping transactions quickly and process them simultaneously.
Why It Matters: By processing transactions simultaneously, it allows Solana’s blockchain to reduce the runtime and latency found in other chains.
Problem: Other blockchains process transactions slowly (as mentioned above).
Solution: Gulfstream enables validators to execute transactions ahead of time.
Why It Matter: This protocol is what allows Solana to support 50k TPS.
And there you have it. A beginner’s guide to Solana’s fundamentals. For traders, make sure to check out my YouTube video, “Realistic Solana Price Target (My SOL Target),” where I help you interpret not only more detailed Fundamentals, but also do Technical Analysis and walk you through my latest thoughts on the coin’s price action.
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BINANCE NEWS & ANALYSIS
BNB To The Moon?
Binance Coin (BNB), the native cryptocurrency of Binance Chain and exchange Binance, is starting to close in on Ether (ETH) in market capitalization. The Binance rally can be attributed to five key reasons:
1️⃣An overall uptick in the popularity of Binance Smart Chain. In recent weeks, the transaction volume on Binance Smart Chain has tripled the volume of the Ethereum blockchain.
2️⃣Strong technical momentum. With BNB breaking through $600.
3️⃣The gap between BSC and Ethereum projects. There is a huge valuation gap between BSC and Ethereum projects which could be making BSC projects compelling to the market.
4️⃣Tokenized stock trading. Binance recently announced that it has ventured into the space of tokenized stock trading. To begin with, Binance has listed Tesla stock tokens.
5️⃣Exchange tokens narratives. A common narrative spun up over the past few weeks is that the direct listing of COIN is also adding value to centralised exchange tokens.
All these reasons withstanding, time and time again the crypto markets have shown no mercy for people that try to ape into projects under the assumption that parabolic up moves will be sustained. The most recent example: earlier today.
A big green candle should not be an invitation to instantly leverage into a long position. Apply the same processes, technical and fundamental analysis as you would in any other scenario. Practise diligence and discipline before every trading decision. Everything else is noise/a distraction.
We’ll be taking a closer look at the technicals on our YouTube tomorrow. Subscribe to tune in for the analysis.
TWEET OF THE DAY
EXCHANGE NEWS & ANALYSIS
How to Get Exposure to Coinbase Stocks
We are all aware of the Coinbase Direct Listing and most of us are very excited about the exchange narrative. For all the articles about the Coinbase listing, how many explain to us how we, as ordinary investors, can get exposure? Well, you’ll have one after today.
From April 14, shares of Coinbase stock will become available for trading on the Nasdaq, bringing another part of the crypto space into mainstream finance.
The first time any retail investor will have direct access to the stock is when it comes on the exchange. Coinbase has chosen ‘COIN’ as its stock ticker. However, there are options for indirect exposure before the listing.
Prior to the listing, interested parties can trade Coinbase futures contracts using crypto exchange FTX. These are not tokenized stocks. They instead track the market capitalisation of Coinbase. After Coinbase’s first day of public trading, they will convert into the equivalent amount of tokenized Coinbase fraction stocks.
SCAN THE WEEK
On Mondays, our ‘Scan The Week’ section is designed to show our community what events and headlines we will be keeping an eye on.
Monday, 12th April
2021: The Year of NFTs, Part 2 — +1785% Return Later ?
Check out this fantastically detailed article from Ruben Merre, Founder and CEO of NGRAVE, on the state of NFTs in 2021!
Tuesday, 13th April
MM Podcast Release #62: Masterclass: Becoming a Successful Entrepreneur with Dan Held ?
Dan Held is the Head of Growth at Kraken and founder of newsletter The Held Report. He has previously managed growth at Uber and sold businesses to Blockchain.com and Kraken.
Wednesday, 14th April
Ethereum Berlin Hard Fork ?
Ethereum developers have scheduled the Berlin hard fork for April 14 at block height 12,244,000. The hard fork will facilitate live swapping Ethereum from a proof-of-work to a proof-of-stake blockchain.
Thursday, 15th April
MM Podcast Release #63: @CryptoKaleo ?
@CryptoKaleo is a popular crypto trader who has transparently traded this bull market, sharing huge gains in recent months reaching daily profits of over $2 million.
Friday, 16th April
Stater Mainnet Launch ?
The Stater Lydian lending platform for NFTs, Mainnet Update is to go live and move their product from Rinkeby to Mainnet. See the full list of updates here.
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Disclaimer: The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. We are not financial advisors. Every investment and trading move involves risk. Do your own research when making a decision.