Solana Starter Guide
Introduction:
Solana is a blockchain similar to Bitcoin and many other protocols. All these blockchain protocols have coins and tokens. A coin represents a value, can be traded and in Solana’s case is called Sol. On the other hand, a token is built on top of the Solana Protocol and anyone can do this. Besides using the token to trade, it can execute “smart contracts”. A smart contract can function like an insurance policy for farmers: if a flood occurs and damages crops, the smart contract automatically triggers a payout to the farmer, providing financial assistance without the need for manual claims processing or intermediaries. The software will determine when the conditions are met. These smart contracts allow for dApps, decentralized Applications, and web3 to be built on the blockchain. The benefits include no intermediate fees for payments, more accessibility to underserved communities, no single controlling entity and others.
Why Sol:
Sol uses Proof of stake and Proof of History that enables extremely efficient, fast and inexpensive transactions. This makes Solana accessible for both users and developers alike. The following dashboard displays how expensive fees can be on other protocols. On Feb 29th 2024, you would have to perform 1245 Solana transactions to pay the same amount of fees as 1 Ethereum transaction.
Getting Started:
The first step with getting started with Sol is setting up your own wallet. Some wallets are Solflare, Atomic Wallet and Phantom. The phantom wallet will be used in this guide.
The easiest way for setting your wallet is to download Phantom to your browser.
Once you download it you will be prompted to make a password and remember the 12 word secret phase. The password is to login to the phantom wallet in chrome but if your device malfunction, the 12 word secret phrase is to recover your account. It is imperative you record this secret phrase somewhere safe where you will not lose it or unwanted eyes will not see it.
Feel free to pin the wallet to your browser and you should see this when clicking on the phantom icon.
There are different ways to get money into your phantom wallet but one of the safest ways to do it will be to set up a Coinbase account. Instead of buying sol directly from Coinbase and transferring it into your wallet, buy Usdc and transfer the Usdc into your phantom wallet. Your wallet address should be listed when you hover over your account:
After you have your Usdc in your phantom wallet, it is recommended to use a swap aggregator such as, Jupiter, to convert your Usdc into Sol. This will give you a better price when you swap.
DeFi:
You just participated in your first DeFI, Decentralized Finance, activity when you swapped your Usdc into Sol using Jup. DeFi is an integral part of the Solana ecosystem and allows you to engage in various financial activities without intermediaries. Something you may have noticed is the speed and low cost at which the transfer of money happened between your Coinbase account to phantom wallet to swapping your Usdc. There are trade-offs when dealing with traditional financial institutions. You can choose speed and transfer your money but may have to pay up to $50 in fees or you can choose the low cost method of using ACH to transfer money but may have to wait up to 7 business days. The power of Solana is that you don’t have to choose between speed and low cost.
Some other DeFi activities include:
Raydium: This automated market maker allows users to earn yield by providing liquidity to various pools.
Drift: decentralized trading platform giving you the power to leverage your sol using perps
Staking:
One recommended activity is to stake sol because it helps contribute to the security and decentralization of the Solana network while earning rewards in return. Solana utilizes a proof of stake consensus mechanism, allowing SOL holders to delegate their tokens to validator nodes and earn staking rewards. To stake sol you can choose from a variety of platforms and exchanges that support Solana Staking. It is important to consider factors such as rewards, validator reputation and unstaking periods when selecting a staking provider.
NFTs:
Another activity you can participate in is exploring NFTs, Non-Fungible Tokens. Solana offers a vibrant ecosystem for creators and collectors alike. NFT marketplaces such as Solsea, Magic Eden, and Digital Eyes provide a platform for buying, selling, and minting NFTs on the Solana blockchain.
Whether you're an artist looking to showcase your work or a collector seeking unique digital assets, Solana's NFT ecosystem offers endless possibilities for creativity and exploration.
Development:
One of the most exciting aspects of the Solana ecosystem is its robust infrastructure for building decentralized applications (dApps) and smart contracts. Whether you're an experienced developer or a newcomer with coding skills, Solana development opens up opportunities to innovate and contribute to blockchain space
To begin developing on Solana, familiarize yourself with its programming language, Rust, and the Solana software development kit (SDK). The Solana SDK provides tools, libraries, and documentation to streamline the development process and build scalable applications on the Solana blockchain.
Once you're familiar with the basics of Solana development, it's time to start building your first decentralized application. You can choose from a variety of categories including creating a token, decentralized exchange or gaming platform.
Tips for safe engagement:
While navigating the Solana ecosystem, it's essential to prioritize security and smart decision-making. Here are some tips to ensure a safe and rewarding experience:
Always verify the authenticity of websites, wallets, and dApps before providing any sensitive information or funds.
Keep your wallet recovery phrase secure and never share it with anyone.
Stay informed about the latest security threats and best practices for protecting your assets.
Start with small investments and gradually increase your exposure as you gain experience and confidence in the ecosystem.
Key Platforms and communities:
Joining Solana's vibrant community is a great way to stay informed, connect with like-minded individuals, and discover new opportunities. Consider joining official Solana social media channels, community forums, and Discord servers to engage with fellow enthusiasts, developers, and projects within the ecosystem.
Staying updated:
Solana's ecosystem is constantly evolving, with new projects, updates, and developments emerging regularly. To stay updated with the latest news and trends, follow key influencers, subscribe to relevant newsletters, and participate in community discussions on social media platforms.
Conclusion:
Congratulations! You've taken your first steps into the exciting world of Solana. By following this guide and embracing the opportunities available within the ecosystem, you're well-equipped to embark on a rewarding journey of exploration and innovation. Welcome to Solana!