Popular blockchain Solana (SOL 1.79%) is really starting to separate itself from the pack. Even amid a challenging time for the overall crypto industry, Solana shows no signs of slowing down. It continues to add developers, projects, and innovative new products at an impressive rate. While Solana is currently trading nearly 90% below its all-time high from last year, it is clearly building for the future and establishing itself as a top blockchain innovator.
And other crypto developers are taking notice. On Aug. 30, the crypto-powered wireless network Helium (HNT -1.51%) announced plans to migrate its entire blockchain over to Solana. It specifically cited the fast speeds, scalability, and development potential of Solana. Helium could have easily chosen Ethereum (ETH -0.43%) or any other Layer 1 blockchain, but it picked Solana instead.
Why Helium matters for Solana
To understand why Helium could be so important for Solana, consider that Helium landed a monster $200 million venture capital (VC) financing round in February from some of the highest-profile investors in the tech world. The financing round purportedly valued Helium at $1.2 billion. Its VC backers now include Tiger Global Management, Andreessen Horowitz, and Khosla Ventures. These funds have backed some of the most famous tech start-ups in the world.
Image source: Getty Images.
So even though Helium only ranks as the No. 76 crypto in the world right now, with a market capitalization of $482 million, it is well known in Silicon Valley.
Helium's roots go back to 2013, when it first started conceptualizing the idea of a true peer-to-peer, decentralized wireless network. Since then, Helium has been building wireless networks, including an Internet of Things (IoT) network for sensors and trackers and a 5G network for tablets, all powered by its native HNT crypto token.
In August, it concluded that its existing blockchain infrastructure was insufficient for what it planned to do next, and that's why it chose Solana. It wants to hitch itself to a winner.
All the details are still being finalized, but the plan appears to be to migrate the old blockchain over to the super-fast, super-scalable Solana blockchain as soon as possible. This is sure to be incredibly difficult, which is why many people are skeptical. The price of Helium has been in free fall recently, and the crypto will have to do a lot to reassure investors. But what if it can pull this off, thanks to the $200 million in VC financing it has in the bank?
Solana's synergies with mobile
Here's where things get interesting, because Solana has been pushing aggressively into the mobile space. It has announced a new crypto phone, it has created a mobile software development kit, and it is working hard on innovations to extend crypto into mobile-first gaming and metaverse experiences. Yet much of this mobile activity appears to be happening under the radar of most investors.
And that's why I'm excited about Helium migrating to Solana. Tech investors like to talk in terms of "synergies," and there appears to be quite a bit of potential here. You have a crypto-powered wireless network migrating to a super-scalable, super-fast blockchain that has embraced the future of mobile crypto. Right now, Helium claims to have deployed more than 1 million hot spots worldwide. All of that activity will now be headed to Solana. Imagine if the IoT starts to run on top of Solana.
Always sunny for Solana?
There are several reasons to be bullish on Solana, and here are two of them. First (and most important), high-profile crypto projects are choosing it as the blockchain to build on. I like to refer to this as "voting with your feet" -- Helium presumably had plenty of options, and it chose Solana.
The same goes for all the new games, metaverse experiences, and non-fungible token projects choosing to build on Solana. Ethereum might still have more developers, but the pace of growth at Solana appears to be higher.
The second reason has to do with all the synergies we are starting to see with Solana. I don't think it has even scratched the surface of what's possible with mobile. We're supposed to get an update on the Saga phone in early 2023, and I'm super-excited already. The more people who build mobile experiences on top of Solana, the more we will start to see new synergies emerge.
Yes, Solana's price is in the dumps right now, but every time I think of what the cryptocurrency is building, it makes me very bullish on the future. Maybe a $1,000 price target for Solana is not so outlandish after all.
