How to Buy Solana (SOL) in Canada

“Solana uses a combination of protocols to offer faster transaction settlement times and a scalable network design. It is often labelled an “Ethereum Killer” with significant potential.”

Solana was launched in 2020 by Anatoly Yakovenko, who began working on the project in 2017. Solana aims to provide a cheaper and faster alternative to cryptocurrencies like Ethereum, which have had difficulty scaling their networks amid industry growth. SOL is the native cryptocurrency of the Solana network and is used to power the staking process while acting as the project’s governance token.

If you are wondering how to buy SOL in Canada, Netcoins is a publicly-traded, fully regulated crypto trading platform based in Canada. With 0% funding fees, free cash withdrawals, and live customer support service seven days a week, we make it simple for Canadians to buy SOL and other cryptocurrencies.

Why Buy Solana?

Solana is a project that supports various decentralized finance projects such as smart contracts, NFTs, and decentralized applications (known as dapps). Solana’s value proposition comes from its ability to scale, which is a challenge most blockchains face. It accomplishes this by using an innovative hybrid design that leverages different blockchain protocols. 

The first protocol that Solana uses is proof-of-history, which is a proof of historical events that enables the blockchain to work and verify quickly without compromising security and decentralization. Proof-of-history acts as a timeline of transactions that enables the Solana blockchain to record events that have occurred at specific moments in time. This allows for an understanding between all network validators without the need for specific communication which leads to increased transaction speeds and security. Solana’s underlying network relies on proof-of-stake to process transactions quickly, cheaply, and in a decentralized manner. 

As the native token of the Solana network, an investment into SOL could be an investment in the future growth and success of the Solana blockchain, which has gained significant traction since its inception.

Does SOL have a supply cap? The number of SOL tokens in circulation is ever-changing and is not capped. Some factors that positively impact the supply cap (reducing tokens in circulation) are transaction fees which are used to burn coins. There is currently a proposed long-term inflation target of 1-2%.

What makes SOL unique? Solana’s combination of proof-of-history and proof-of-stake protocols allows the project to significantly increase capacity resulting in lower fees and faster transaction speeds. Solana’s ability to combine a similar product offering to Ethereum, faster transactions and lower fees makes it a favourable choice with a unique proposition.

Why is Solana Called Ethereum Killer?

Solana and Ethereum are connected through their ambitions of hosting smart contracts. Although Solana uniquely uses proof-of-history to aid with its objective of scaling, both projects use proof-of-stake as the basis of their underlying networks to process transactions.

Solana is labelled an Ethereum killer as it addresses one of the largest and most prominent issues with Ethereum; speed. Ethereum has had problems scaling its network, which has resulted in high gas fees that make it expensive to use the network. 

Other than several outages that the network has experienced, Solana has been able to scale its platform resulting in quicker and cheaper transactions seamlessly. Its aim to fix Ethereum’s problems with a more scalable solution has dubbed Solana, the Ethereum killer.

 

What Can You Do With SOL?

SOL is the native cryptocurrency of the Solana network, which can be used to pay for transactions, stake to earn yield and participate in network governance. Transaction fees on the Solana network occur whenever a transaction is processed. Examples include transferring SOL to a different wallet or buying things such as NFTs on the Solana network. Projects on the Solana blockchain keep growing as well.

Participating in SOL staking can be a lucrative way for some investors to make passive income on their investment. Staking can be accomplished by transferring SOL tokens to a wallet that supports it, such as Phantom Wallet or Solflare Wallet. SOL can also be used to participate in network governance which gives users voting power depending on how many SOL tokens they hold. This process is a little more complicated and involves setting up and running a network validator.

 

How Much SOL Can I Buy?

SOL, like other cryptocurrencies, is highly divisible. You can buy a whole SOL token or fractions of it. When opting to buy SOL, a platform like Netcoins allows you to buy whatever dollar amount of SOL tokens you’d like. Buying SOL in regular intervals (like days, weeks or months) is known as dollar-cost averaging and can be a great way to average the price you buy at. All of these options are available on Netcoins, Canada’s first publicly-owned, fully regulated cryptocurrency exchange.

Related Article: How much do I need to get started with crypto?

 

How Do I Store My SOL?

You can buy SOL tokens from crypto trading platforms, like Netcoins, and leave your SOL tokens inside the platform. However, there are much safer options to storing your SOL as leaving them in exchanges can expose them to certain risks like hacking and theft.

The safest option to keeping your SOL secure is to transfer them into a Solana wallet. A Solana wallet is a type of digital wallet that is used to send and receive SOL, similar to a Google wallet or a physical wallet.

There are four different types of Solana wallets: hardware wallets, desktop wallets, mobile wallets and web wallets.

Hardware wallets look like a USB device. They are considered to be offline wallets because they’re not connected to the internet. The fact they’re offline makes them more difficult to find and to hack. As such, they’re typically considered the safest option to store your SOL. 

Desktop wallets on the other hand are programs that store your SOL on your computer’s hard drive. Mobile wallets perform the same function as a desktop wallet but on a mobile device instead. 

Finally, a web wallet is an online service that sends and stores your SOL on your behalf anywhere, anytime. Similar to checking your email. 

Desktop, mobile and web wallets are all connected to the internet (and referred to as “hot wallets”). Like mentioned earlier, they are more susceptible to potential risks. On the other hand, hardware wallets (or “cold wallets”) are considered safer options as they are not connected to the internet. 

This is why it’s often advised that Canadians pull out their SOL from crypto trading platforms and send them directly to a hardware wallet. Only in this way, are they in full possession of their SOL and can keep them secure.

 

Why Are Investors Excited about SOL?

As the native token of Solana, SOL is heavily integrated into the project’s operations. With this in mind, any future price appreciation of an investment into SOL will depend on whether Solana reaches mainstream adoption and can compete with the likes of Ethereum.

Given the project’s proven ability to provide scalability and cheap transaction costs, the value proposition is there to attract network users and projects. The most significant variable to consider is whether the decentralized finance (DeFi) market continues to grow. 

Given DeFi’s small size compared to the global financial industry, Solana could be positioned well to take advantage of growth seen in the industry with its product offering that is on par with some of the best in the industry.

Related article: Three Ways to Make Your Cryptocurrency Work For You

This post is for informational purposes only. For proper financial advice, we recommend you speak to a financial advisor.