Key Takeaways:
- Phantom is the default wallet of the Solana blockchain.
- Phantom is also a non-custodial wallet, which means you have the sole ownership of your funds because you hold your private key.
- Solana’s Phantom wallet, NFT collections, and blockchain gaming put forward an enticing alternative to Ethereum.
Solana has made a name for itself during the first half of 2021. The hardships of Ethereum transitioning from Proof-of-Work (PoW) to Proof-of-Stake (PoS) have made it expensive to use.
This was when Solana stepped in as a deployed PoS blockchain with SOL as the native token. Solana not only has a unique Proof-of-History (PoH) working alongside PoS, but it boasts impressive performance and negligible fees.
If you want to take part in the Solana ecosystem, the best way to do it would be with a Phantom wallet. Before that, however, let’s see what Solana is all about.
Phantom Wallet’s Blockchain: SOLANA
As Ethereum relies on Layer 2 scalability solutions like Arbitrum and Polygon to help it grow. These solutions are not ideal. Solana can handle a massive throughput of up to 50,000 transactions per second (tps).
In contrast, Ethereum can only handle 15–45 on its main chain without the use of Layer 2 networks. This was made possible with a key blockchain innovation — Proof-of-History (PoH).
As its name indicates, PoH provides a record of all events that have occurred on the blockchain. This is an important efficiency upgrade compared to other PoS blockchains. Because they need validators to link between each other and verify the passage of time.
In contrast, every Solana validator has its own encoded timestamp, encrypted with SHA-256. In other words, the Solana network can ignore local clocks and take into account possible delays. As it processes transaction data.
In practice, this makes Solana work like a centralized blockchain like Binance Smart Chain. It is very fast, but security and decentralization are not compromised.
Presently, Solana has 1257 validators across 1066 RPC (Remote Procedure Call) nodes, mostly hosted in the West.
Anyone can run a validator node without having to put up a lot of money, unlike with Ethereum (32 ETH). Although, the PC requirement is above average.
As far as SOL native token goes — used for paying transaction fees across Solana’s smart contracts — a total of 489 million SOL are scheduled to be released, while around 260 million SOL are already in circulation.
Those who have been paying attention to blockchain technology could have invested in SOL to make a fortune. Since June 2021 alone, SOL outperformed ETH by five times, going from $26 to $223 on December 2nd.
In investment numbers, $1,000 worth of SOL at that time could have transformed into $8,563 barely a half a year later. On November 6, SOL reached its all-time-high (ATH) price of $258.93. Solana’s current market cap is $68.6 billion.
The cryptocurrency sandwiched between Cardano (ADA) and Tether (USDT) at fifth rank by market cap.
Solana’s Phantom Wallet
Within the Decentralized Finance (DeFi) space, gross value locked (GVL) in smart contracts is mostly held on the Ethereum blockchain, worth over $124 billion.
This is predictable, given that Solana launched five years after Ethereum in April 2019. As a result, Solana’s GVL is eight times lower, at nearly $15 billion.
To access those funds, one needs a wallet. While MetaMask has become the default wallet for EVM compatible DApps and tokens, Phantom wallet is Solana’s response to it, as another web browser extension, installable for Chrome here free of charge, but also available for Brave, Firefox, and Edge browser.
This makes Phantom a Web 3.0 wallet. Any time you visit one of the hundreds of Solana’s DApps (currently 500), you can connect the Phantom wallet within the browser and immediately start trading, just like you would use any other browser extension.
Phantom is also a non-custodial wallet, which means you have the sole ownership of your funds because you hold your private key.
Like most Solana DApps, Phantom wallet is easy on the eye and easy to use, especially after the prolific VC firm A16z poured $9 million into its development. Here are Phantom wallet’s core features:
- Supports SOL, USDC, USDT, Serum (SRM), Raydium (RAY), and other utility tokens within the Solana ecosystem
- You can exchange these tokens at Serum decentralized exchange, while Raydium is its liquidity provider and automated market maker (AMM). Just like Uniswap’s UNI, RAY utility token can be staked to passively earn fees, otherwise known as yield farming.
- Can link to hardware wallets like Ledger
- Supports holding non-fungible tokens (NFTs)
- Can use it for staking SOL tokens in order to secure the network as a validator. The expected annual percentage yield (APY) is within the 5–10% range.
However, the Phantom wallet is quite a newcomer to the blockchain scene, so it is still not comprehensively tested like MetaMask with its over 10 million users. Nonetheless, Phantom’s roadmap is promising.
Notably, the built-in compatibility with Ethereum for token swaps. Most importantly, Phantom wallet users will sigh a relief when they see Solana’s drastically low transaction fees, at $0.00025.
Those who have been using Ethereum for any extended period of time know that this is a light and day difference. Lastly, Phantom wallet has undergone a code audit by Kudelski Security, one of the top blockchain firms, to test the integrity of smart contracts and wallets.
Solana’s NFT Offering
Presently, Ethereum’s single NFT marketplace, OpenSea, boasts more than half the trading volume present across all Solana’s dApps, reaping $9.4 billion in sales.
By market share, this makes OpenSea hold 60% of the total NFT marketplace.
Just like Phantom is the answer to MetaMask, so is Solanart the answer to Ethereum’s OpenSea. Other notable NFT marketplaces where you can trade NFTs are the following:
- Magic Eden — $201 million total trading volume
- Solana Monkey Business — $104 million total trading volume
- DigitalEyes Market — $103 million total trading volume
- SolSea — $16 million total trading volume
Needless to say, Solanart is the go-to Solana NFT marketplace with more trading volume than all other four combined, at $565.6 million.
As far as actual NFT collections go, by far, the most popular ones are Degenerate Ape Academy, Solana Monkey Business, Aurory, GGSG, and SolPunks.
Degenerate Ape Academy is again, you guessed it, an answer to one of the most popular NFT collections on Ethereum — Bored Apes Yacht Club. As is common now, the Degen Ape collection is generative art, based around randomly generated attributes, making 10,000 unique apes.
It is safe to say that Degen Ape Academy played a big role in making the Solana blockchain a well-known alternative to Ethereum.
Once bought, owners gain full ownership of the apes, so the devs cannot modify them or freeze the ownership in any way. At present, Degen Apes sell at an average of 37 SOL, which is around $8.4k.
In September, one of the rarest Degen Ape sold for more than $1 million, bringing in headlines and more traffic into Solanart and Solana ecosystem as a whole.
However, of more interest to prospective NFT buyers is the Diablo-like Aurory play-to-earn (P2E) game. The player moves the character in real-time when exploring the world from a bird’s-eye perspective, just like classic ARPGs.
When there is an encounter, the game enters battle mode consisting of a 3D square grid similar to King’s Bounty or Wakfu.
The NFTs are called Nefties, magical creatures akin to Axies in Axie Infinity, the king of blockchain gaming.
Outside of Nefty NFTs that can be traded on the marketplace and played in combat, Aurory has AURY utility tokens, which can be staked for extra passive dough.
AURY will also be the game’s governance token in the future, which will offer players a way to vote on the development of the game.
In fact, Aurory is Solana’s first Metaverse P2E game, having skyrocketed in value since Facebook turned Meta and announced its $10 billion investment spree into virtual space assets and games.
Still in development, AURY locked staking is poised to be highly lucrative, at around 200% APR (annual percentage rate). By all appearances, Aurory has a chance to do for Solana what Axie Infinity did to Ethereum.
Keep in mind that Bank of America listed Axie Infinity as the top-performing blockchain game in its digital assets report. Aurory may just as well repeat that success, possibly skyrocketing in value in the near future.
Taken all together, Solana’s Phantom wallet, NFT collections, and blockchain gaming put forward an enticing alternative to Ethereum. No doubt, tiny transaction fees will push its tailwinds further, while Ethereum has yet to find an anchor in its Beacon Chain.
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