CoinMarketCap Alexandria takes a deep dive into Solar (SXP), a rebranded layer-one blockchain with big plans for the future.
is an open-source layer-one blockchain
for decentralized peer-to-peer payments. It runs on a delegated proof-of-stake consensus mechanism
and is governed by a DAO
. Solar’s block producers are called Delegates and secure the blockchain through a vote-based system using the native SXP coins.
Solar lays its focus on creating a community-driven blockchain, which will one day be comparable to blockchains like Ethereum
. To achieve this ambitious goal, Solar overhauled its previous ecosystem called Swipe and developed a new testnet and mainnet under the guidance of a new team, which is controlled by a DAO. In the first quarter of 2022, Solar has been able to tick off a few significant milestones on its roadmap:
- Its mainnet went operational on March 28, 2022, after several months of testing on the devnet.
- It released a new set of desktop wallets for its peer-to-peer payments system.
- Solar deployed the Solar Side Ledger Protocol, which allows users to create the Solar equivalents of ERC-20 tokens and NFTs. The SXP coin is used for transactions on this platform.
- Staking on the mainnet has been enabled.
- The first set of 53 delegates to secure the blockchain was chosen.
Future development will focus on improving governance and increasing interoperability
between Solar and other ecosystems.
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The pillar of Solar’s ecosystem is its delegated proof-of-stake blockchain called Solar Core
. It is a fork of the Ark
blockchain that promises to be fast, modular, sustainable, efficient, and fully decentralized. However, Solar differs from Ark by fully utilizing Schnorr signatures, resulting in improved privacy for users
In its dPoS consensus mechanism, 53 delegates
operate as nodes
responsible for securing and maintaining the Solar blockchain. Block production is split into rounds
. Each round consists of 53 blocks, and each delegate submits one block per round. The time of block submission
on Solar is eight seconds
, and thus considerably faster than blockchains like Bitcoin
but slower than a chain like Solana
The block reward
for each round is 530 SXP and is split according to the following formula:
Reward = ((N + X) / D) * (R / S * D)
- With the variables being:
- N = position of forging delegate at the start of the round.
- X = (53) variable, used to determine the ratio of reward between the top and bottom delegates.
- D = (53) variable, total delegates.
- R = (10) average block reward in one round S = (80) sum of ((N+X)/D) from N=1 to N=D
Thus, a delegate ranked 1 will receive at least 6,75 SXP per round, while a delegate ranked 53 will receive at least 13,25 SXP per round. Delegators also earn a share of the transaction fees. Currently, the supply of SXP is inflationary and fixed at 530 SXP per round. However, the community has the right to change this via a governance proposal in Q3 2022, which needs to be passed by voters and delegators.
As on other delegated proof-of-stake blockchains, voters elect the delegates that validate blocks. Delegates, in turn, can choose what share of the rewards they keep as commission and what is returned to the voters. Solar has no vote-escrowed mechanism, meaning the number of tokens staked to a delegator cannot be leveraged by locking in the tokens.
However, Solar nudges voters towards choosing delegates that contribute to the ecosystem through development, security improvements, marketing, or moderating. Unlike delegates that choose to sell their block rewards, long-term-oriented delegates can prevent a steady decrease in the price of SXP by prioritizing the network’s development.
Solar aims to close the gap to more established blockchains by launching several initiatives.
The Solar roadmap
outlines how the ecosystem plans to develop in 2022. For the second quarter of 2022
, Solar plans to implement several key milestones, such as:
- The release of its mobile and web wallets.
- The release of its Side Ledger Protocol software development kit.
- An alpha version of its Solar metaverse.
- A completed core audit of its blockchain framework.
- A beta version of its NFT marketplace.
These are only a few of several objectives. For the remainder of 2022, Solar will enable a governance module, issue its first grant, and launch the Solar Launchpad, among other goals.
Side Ledger Protocol
The Side Ledger Protocol (SLP) allows users to create fungible and non-fungible tokens
on the Solar blockchain, similar to the ERC standard on Ethereum. This will be possible, thanks to the Solar wallet and the software development kit, which is to be launched in the second quarter of 2022. Sending SLP tokens on Solar will be as cheap as 0.2 SXP per transaction. Fungible or non-fungible tokens can be created for only 5 SXP. Solar introduces a deflationary
dynamic to its ecosystem with this function, as sufficient activity would mean more SXP is burned than created.
Metaverse and NFT marketplace
Solar plans to launch its own metaverse and NFT marketplace that integrate SLP features and allow creators to sell digital collectibles. Solar also promises the creation of worldwide quests, mint passes for AMAs with celebrities and influencers, and the creation of additional dApps
. The metaverse and the NFT marketplace will also contribute to Solar’s deflationary dynamic by burning SXP for transaction fees.
Solar expects that with rising popularity, other projects will choose Solar as their settlement layer and deploy their own decentralized applications. Therefore, the Solar Launchpad will offer several features that benefit token holders and fledgling projects:
- A listing fee for each new decentralized application, ranging from 10 SXP to 1,000 SXP.,
- Optional KYC and audits of new projects.
- Burning of transactions fees and listing fees on the Solar Launchpad.
Current Solar wallets are a fork of Ark
repositories and are only equipped with basic functions. Thus, Solar will deploy new desktop, mobile, and browser wallets that can deliver on its planned metaverse and SLP features.
SXP is the network’s utility and governance token
. It is used to vote on governance proposals, and voters can delegate it to earn a share of the block rewards. All 480 million SXP that currently exist as ERC-20 or BEP-20 tokens are being swapped at a 1:1 ratio for SXP on the Solar mainnet, thus the total supply
of Solar will not be increased.
Solar has implemented several deflationary mechanisms to curb the growth of its supply. The Treasury smart contract
holds 40,800,000 SXP whereas the Founder’s Wallet holds 50,000,000 SXP.
Solar (SXP) is currently trading at around $1.35 as of April 8, 2022, down from its all-time high of $5.68 set in April 2021. Its 24-hour trading volume on exchanges is around $58 million, and its fully diluted market cap is around $700 million.
Solar is trying to revive a long-standing project with an interesting take on all things currently en vogue in the crypto industry: NFT
, and launchpads. Its consensus mechanism and blockchain architecture look sound and should square well with the increased awareness for “carbon-neutral” blockchains.
Whether Solar can return to previous all-time highs will depend heavily on how well it can execute on its ambitious roadmap. Many layer-one blockchains have competed for a spot at the top, but only a selected few can credibly rival Ethereum as the market leader for decentralized applications. If Solar indeed manages to deliver on its extensive plans, it could turn out to be one of the bullish surprises among L1 chains in 2022.
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