How to Buy Solana (SOL)
Solana (SOL), the Solana blockchain’s native coin, has secured its place among the best-known and most valuable cryptocurrencies. During the crypto bull market of 2020-2021, the price of SOL has surged alongside other newly launched Layer 1 blockchains. Within the first six months of 2021, the SOL coin has earned holders a 100x return, which has attracted many new investors and speculators to the Solana ecosystem.
Like most cryptocurrencies, SOL has dropped sharply in price during the following 2022 crypto market crash. Nevertheless, the coin defended its position among the most valuable and promising currencies in the space and is said to have great potential due to Solana’s unique technological approach.
Thanks to Solana’s success and popularity, SOL can be purchased at most top-tier crypto exchanges such as Binance, Coinbase, Kraken, Huobi, Bitfinex, FTX, and KuCoin among many others. As SOL is the native coin of the Solana blockchain, well-known DEXs like Uniswap, PancakeSwap, and Curve running on other blockchains only offer Solana derivatives or wrapped Solana for trading.
How to Buy Solana (SOL)
The easiest way to buy Solana SOL is on centralized exchanges (CEXs). In order to purchase SOL on CEXs, an account is needed. Due to Know Your Customer regulations, basic identification has to be provided when opening an account, and if larger amounts are traded, a complete verification is necessary.
Opening an account with a CEX is straightforward and similar to that of other Fintech services. The following steps will guide you through the process.
Step 1: Choose an Exchange
When choosing your first CEX it is recommended to pick one of the large exchanges like Binance, Coinbase, Kraken, Huobi, Bitfinex, or FTX, which have a good track record and are likely to offer a reliable service in all market conditions. If you are planning to trade large quantities of crypto, comparing fees on different CEXs can save you big money.
Step 2: Open an Account
When opening an account with a CEX you will be asked to provide personal information such as name and address, scan an official public document (passport) and upload a proof of address (utility bill). Usually, this process is automated and only takes a couple of minutes.
Once the documents have been submitted, it takes 1 to 2 business days for the account to be verified and fully operational. Most CEXs let you use your account right away with only some features locked until the identification is completed. Be sure to enable 2-factor authorization and other safety features (such as delayed withdrawals and withdrawals only to whitelisted addresses) when opening the account. This ensures that unauthorized access to your account and funds is significantly more difficult.
Step 3: Fund your Account
To buy SOL, you need to fund your CEX account with U.S. dollars or your local currency, if supported. You can wire funds via wire transfer, which often is free of charge and usually takes 1 to 3 business days. Or you can top up your account with a credit card, which is faster but costs an extra 1 to 3% in fees.
Step 4: Start Trading
Once the funds have arrived in your account, you are ready to buy your first SOL coins. Usually, SOL is traded against U.S. dollars and other major cryptocurrencies like Bitcoin, Ether, USDC, and USDT. Pick the SOL/USD pair and choose ‘market order’ to purchase SOL at the current market price or ‘limit order’ to set a specific price you want to purchase at.
Alternatively, SOL can also be purchased on decentralized exchanges (DEXs). As mentioned above, you can use DEXs like Uniswap running on other blockchains to trade Ether (ETH) against a wrapped version of Solana (wSOL). For this, an Ethereum wallet stocked with Ether is needed. But wSOL cannot be staked and also bears the bridging risk. For newcomers, this option is not recommended.
Where to Buy Solana NFTs
Solana is not only known for its astronomic speed and unprecedented transaction throughput, but also for its vibrant and diverse NFT community. Like cryptocurrencies, NFTs are traded on centralized and decentralized marketplaces.
On Solana, there are a variety of marketplaces to purchase NFTs from. Some of the most popular NFT marketplaces are:
The various NFT marketplaces differ in the collections that are traded on them. Further, they have differing fee structures, license options, and incentive programs for creators. If you would like to create your own NFT on Solana and sell it on an NFT marketplace, see our guide on How to Build on Solana.
NFTs on Solana marketplaces are priced and traded in SOL. To purchase NFTs, you have to top up your Solana wallet with SOL coins (more about Solana wallets below). The easiest way to accomplish this is by sending SOL coins from a centralized exchange to your wallet. This process should only take minutes and cost a fraction of a dollar.
How to Secure your Solana (SOL) and NFTs
SOL can be held with the exchange it was bought on. Once the coins have been purchased, they can conveniently be left in the exchange account, no extra transaction to an external wallet is needed. Of course, this bears a counterparty risk. Should the exchange be hacked, go bankrupt, or be fraudulent, then the SOL coins might be lost.
If you do not want to be exposed to such risk you can alternatively store SOL in a personal wallet. Because SOL is a digital-bearer instrument just like other cryptocurrencies, the option of taking self-custody is available for everyone. Popular wallets that allow users to interact with the Solana Network and store SOL coins in self-custody are Solflare, Phantom, TrustWallet, Sollet, or Ledger. For an extensive list of all available wallets on Solana, see here.
If greater security to store SOL is sought and needed, hardware wallet provider Ledger is a popular option that is compatible with the Solana Network as well.
To set up your Solana wallet, download one of the above software wallets on your mobile phone or desktop computer. Once downloaded, the wallet will lead you through the necessary steps to set it up. Notice: In the process, a seed phrase consisting of 12 or 24 words will be revealed to you and you will be asked to write it down. Write the words down on paper and store them offline. Whoever has access to this seed phrase can control your wallet. Do NOT store them on your phone, computer, in the cloud, neither as a screenshot nor as a written list.