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Grayscale launches Solana Trust for institutional investors



The crypto investment firm Grayscale is the largest digital asset manager in the world and manages digital assets valued at over 55 billion US dollars (as of October 29, 2021) . The company now offers another crypto investment product: the Solana Trust.


Grayscale launched the Solana Trust Fund on November 30, 2021 . With this, institutional investors can now also safely invest in the Solana Coin.


How does the Solana Trust work?

Grayscale works with the Coinbase Custody Trust Company for the custody of the coins. The trust's SOL are stored offline on hardware storage, which protects the coins from hacking. The trust also uses the CoinDesk Solana Price Index as a reference for evaluating the stored SOL, which tracks the SOL price in real time. Investors can therefore acquire shares in the trust and thus invest in SOL without having to buy or hold the coins themselves.


Grayscale was positive about SOL in the relevant press release :


“The trust invests exclusively and passively in Solana (SOL), the native token of the SOL network, a smart contract platform that was first presented in a whitepaper in 2017 . Like the Ethereum network, the Solana network is one of several projects that will advance blockchain use beyond a peer-to-peer monetary system. "


Both private and institutional investors can buy shares in the trust. The fact that the world's largest crypto investment firm is offering SOL to institutional investors shows us that the “Ethereum killer” is on the right track.


Why Solana is a real alternative to Ethereum

SOL could become one of the biggest competitors of the second largest cryptocurrency ETH, as the smart contract platform currently offers much faster and cheaper transactions than the Ethereum network. While the Ethereum network can process 15 transactions per second, the Solana network can process 50,000. An SOL transaction costs just 0.00025 USD, which is around 40,000 times cheaper than an Ethereum transaction. Ethereum could eliminate these disadvantages with the ETH 2.0 upgrade . However, it remains to be seen how long the upgrade will take and how successful it will really be.


Solana is based on the Proof-of-History (PoH) algorithm and is an alternative to pure Proof-of-Stake (PoS) and Proof-of-Work (PoW) based blockchains. The algorithm is based on a kind of cryptographic clock. Since nodes within this system do not have to communicate in order to validate a block, the system is much more efficient and faster than traditional blockchains. In addition, this mechanism significantly reduces the energy costs of the system. According to a news article from ambcrypto.com, an SOL transaction costs around 55,000 times less energy than a Bitcoin transaction and around 5000 times less than an ETH transaction. In terms of environmental protection, the relatively young cryptocurrency can also score strongly.


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