Quick Facts

Approximate Market Cap$39,496,004,045
Year Established2017
FounderAnatoly Yakovenko
Symbol/AbbreviationSOL
UtilityObject

Scalability difficulties with the Ethereum Network have been a big issue for most users since the DeFi explosion.  As an alternative to Ethereum, the Binance Smart Chain (BSC) has also dominated the market. 

BSC’s approach fails to address the difficult trinity of scalability, decentralization, and security. Ethereum provides decentralization and security. BSC, on the other hand, has Scalability and Security. Neither solves the entire triad.

This is where Solana has quietly been growing momentum and support in the Crypto space.

What is Solana – Definition

Solana is an open-source blockchain that functions similarly to Ethereum. It allows rapid, secure, and scalable decentralized apps and markets.

SOL is the native cryptocurrency of the Solana network. It is usually used to execute custom programs, send transactions, and incentivize actors that support the Solana network. Staking SOL to earn extra rewards is a good way for users to earn profit.

Solana’s main goal is to prove that there is a potential collection of software algorithms that may be used to construct a blockchain. As a result, transaction throughput would grow proportionally with network capacity. It would also meet all of the blockchain’s properties: scalability, security, and decentralization.

Pros and Cons

Pros

  • Fast transactions
  • High level of scalability
  • Low transaction costs

Cons

  • Lack of transparency
  • Not decentralized enough
  • Still in development

The History

Solana’s roots may be traced back to late 2017. Anatoly Yakovenko, Solana’s creator, issued a draft whitepaper outlining a “Proof of History” (PoH). It was a revolutionary timekeeping approach for distributed systems. One of the limits of scalability in blockchains is the time necessary to achieve a consensus on the sequence of transactions.

Anatoly thought his innovative approach might streamline the transaction sorting process for blockchains. He offered the critical component that would allow crypto networks to expand well beyond their current capabilities.

The founding team initially named the project “Loom”. Later they rebranded it to Solana.

At the beginning of 2018, Solana Labs began seeking funding to develop its new crypto network. Solana started out on Mainnet Beta in March 2020.

How Solana Works

Currently available blockchains do not rely on time. They make a poor assumption about participants’ ability to keep time.

Solana solves the many traditional issues that earlier blockchain technology experienced. It displays a new structure for verifying transactions and a more efficient consensus algorithm.

Solana resolves the biggest challenges with distributed systems – the agreement in time.  While Bitcoin uses the PoW algorithm, Solana uses a Proof of History method. This system enables the creation of historical records that prove that an event occurs during a specific moment in time. It allows high throughput and more efficiency within the Solana network.

Sealevel is a data processing engine that is highly automated. It enables Solana to achieve a faster runtime while also allowing transactions to occur simultaneously on the same state blockchains. Data on Solana is delegated between validators to a network of Archivers.

The common factor running across these innovations is optimization. The team recognized every place where other chains slowed and designed solutions to each challenge.

Advantages & Disadvantages

Advantages

Fast

Solana is capable of processing 50,000 transactions per second.

Scalable

Solana achieved high levels of scalability by using the Proof of History and a number of other game-changing technologies.

Low fees

Solana has increased its market share and kept application fees incredibly cheap with billion of users worldwide.

Disadvantages

Low transparency

The Solana team’s lack of transparency regarding key elements of its business may be alarming for potential consumers and investors.

Low implementation

Many solutions are still waiting to be released on the Mainnet Beta version.

Solana in the Global Crypto Market

At a market cap of $35 billion, Solana is currently ranked eighth.

Solana has 290 million SOL coins in circulation and a total supply of 489 million. The Solana Foundation confirmed that 489 million SOL tokens would be made available for purchase. Approximately 260 million of these have already reached the market.

SOL tokens may be acquired on the majority of exchanges.

According to estimates, Solana is now the market’s fastest rising cryptocurrency. Solana’s creators have been working tirelessly to improve the product with new features on a regular basis.

FAQ

Is Solana centralized?

No. Solana has a decentralized protocol. It integrates the PoH timing mechanism into the framework of the PoS protocol.

What exactly is Solana’s mission?

Solana’s objective is to enable all high-growth and rising blockchain applications. It also aims to equalize the global financial systems.

What is the purpose of SOL?

Within the network, the SOL Token is utilized for two purposes. Users may stake $SOL with validators that run on Solana, such as Stakin, or to pay network fees for transactions and voting.