How to buy Solana (SOL) in Canada

One of the beneficiaries of this trend is SOL, the native coin of the Solana blockchain. It is currently the fifth-largest crypto, with a market cap of about $69 billion, as of Sept. 24, 2024, per CoinGecko. SOL is currently trading at $148.93, and there are nearly 469 million SOL tokens in circulation.

If you’re looking to expand your crypto exposure or add coins that are less sensitive to news headlines, SOL merits a closer look.

What is Solana?

Solana was co-founded by Anatoly Yakovenko, Greg Fitzgerald and Stephen Akridge, all former employees of U.S. chipmaker Qualcomm. Solana Labs is the company that runs the Solana blockchain. Launched in March 2020, Solana is a high-performance, open-source blockchain platform designed to support smart contracts and the creation of decentralized applications (dApps). For that reason, Solana is considered one of the strongest challengers to Ethereum, a much bigger rival with similar capabilities.

Solana runs on a hybrid protocol of proof-of-stake (PoS) and proof-of-history (PoH), a proof for verifying order and passage of time between events. Due to this unique protocol design, Solana can handle up to 50,000 to 65,000 transactions per second. Lower fees and faster transactions are sticky features that encourage users to stay within the Solana ecosystem, especially for their decentralized finance (DeFi) apps and non-fungible token (NFT) purchases, says Michael Zagari, an investment advisor with Mandeville Private Client and Zagari+Simpson.

“When it comes to gaming, finance and NFTs, having transactions processed quickly, at low fees, and an easy-to-use platform to build on top of make for a better user experience and help scale decentralized applications,” he says, adding that Solana seems to be attracting developers faster than ethereum did at the same stage of its growth cycle.

Solana’s ecosystem comprises a suite of technologies that work synergistically, including decentralized apps, DeFi projects, NFT marketplaces and lending protocols, which are built on Solana’s open infrastructure. The more users a dApp attracts, the greater its network effect and value. In the case of Solana, “the higher the demand for dApps built on its network, the stronger the demand for SOL, its native coin,” Zagari says.

Staking SOL

Investors can stake SOL to generate yield. Crypto staking means pledging or locking up crypto holdings in exchange for rewards or interest payments. Here’s an excellent primer on how it works.

You can also spend SOL on accessories while playing games built on top of the Solana protocol. “If you feel like entering the metaverse, you can use SOL tokens to purchase attire for your avatar,” says Zagari.

Solana also works as fiat money and can be used to buy NFTs and other tokens, which is indicative of its growth runway and the coin’s price appreciation potential. “With the rise of NFTs, a market that went from $80 million to $17 billion in just one year, having an asset like solana may be worth considering,” Zagari says. (Learn more about buying NFTs.)

Watch: 10 cryptocurrencies you need to know about

Buying SOL with Canadian dollars

Investors can buy Solana on a crypto trading platform. Look for one that has been approved to do business in Canada by Canadian securities regulators. A good place to start is MoneySense’s best crypto platforms and apps ranking.

Bottom line

From NFTs to DeFi and the metaverse, Solana offers many plays. However, investors should carefully consider their objectives and risk tolerance, and weigh the perils against any potential payouts. Cryptocurrencies can offer windfall-like gains, but they’re also prone to extreme volatility.

Read more about crypto:

• Mission digital: How Coinbase is reshaping Canada’s crypto landscape
• 10 common crypto scams and how to avoid them
• What is DeFi? And how can Canadians invest in it?
• What affects the price of bitcoin?
• “Which cryptocurrency should I invest in?”