What is Solana?
May 28, 2021 - 5 min read
Solana is a blockchain that promises to allow dApp developers to deploy crypto apps and then grow rapidly without the congestion and scalability issues that affect some other networks. In focusing on scalability, Solana seeks to provide developers with both the infrastructure and bandwidth to facilitate global adoption of their decentralized products and services.
Solana was founded in 2017 by Anatoly Yakovenko who conceived the plan for the blockchain with the goal of decreasing the amount of time it took for nodes to reach consensus and consequently enabling greater scalability for apps seeking to grow quickly. Previously a software engineer at Dropbox and Qualcomm, Yakovenko partnered with former Qualcomm colleague, Greg Fitzgerald, to build the Solana testnet, and launched in 2018. Yakovenko then raised further development funds through private sales of the SOL token. The Solana Mainnet Beta launched in March 2020 with basic smart contract and transaction capabilities.
Scalability innovation: The key to Solana’s scalability innovation lies in its verification system. Solana uses a form of proof-of-stake (PoS) that requires miners to hold amounts of SOL in order to validate transactions and add new blocks to the Solana blockchain. While proof-of-stake is more energy efficient than a proof-of-work system (that requires miners to dedicate computing power to the validation process), the time taken to validate transactions through PoS, and the sequence in which validations take place, can create efficiency drains and lead to congestion and slowdown across the network. Solana addresses those sequencing issues by employing proof-of-history (PoH).
The PoH system serves to timestamp every transaction on the blockchain prior to validation via PoS. In doing so, the Solana network creates a historical record of events on the network, establishing the order in which its transaction took place before they are added to the chain. This means that nodes on the Solana network can create blocks (informed by time-stamped transaction information) without having to coordinate with the entire network – and so reduce the time this process takes. Processing around 50,000 transactions every second, Solana claims to be the fastest blockchain in the world, adding new blocks at a rate of 2.34 seconds.
Beyond its PoH system, Solana has introduced a range of core innovations to optimize the speed and bandwidth of the network. These include:
- Turbine: A protocol that breaks data into smaller packets to better facilitate transmission between nodes on the Solana network.
- Cloudbreak: Solana’s network account database, Cloudbreak, is a data structure that optimizes concurrent reads and writes.
- Gulf Stream: A protocol that facilitates transaction caching, allowing validators to verify transactions on Solana ahead of their final approval and addition to the blockchain.
- Pipelining: A protocol that efficiently assigns input data to the hardware responsible for processing it (based on its specifications) to enable faster validation and replication across network nodes.
- Sealevel: A transaction processing engine that allows for thousands of smart contracts to be executed in parallel without slowing down network performance.
The SOL token: SOL is the native token of Solana and powers all transactions and smart contract processes on the network. SOL can be earned in exchange for validating transactions or running programs on the Solana blockchain. As part of the PoS system, users can earn passive rewards on their SOL depending on how much of it they have staked. The SOL token can also be split to facilitate micropayments. The supply of SOL has been capped at 489 million.
As Solana grows, SOL will eventually confer governance rights over the network.
Solana is an open source blockchain and provides an infrastructure and ecosystem for the deployment of decentralized apps. The speed, bandwidth, and scalability features of Solana distinguish the blockchain from some of its competitors. The SOL token is central to the function of the network: Solana offers average transaction fees of 0.000005 SOL.
With its speed and scalability advantages in mind, Solana has attracted a diverse range of developers to its ecosystem, including many with a focus on DeFi applications. Examples of dApps deployed on the Solana blockchain include:
- Serum: A highspeed decentralized exchange, supporting crosschain asset swaps.
- Raydium: An automated market maker protocol for Serum
- Oxygen: A DeFi prime brokerage protocol
- Bonfida: A data aggregator and visualizer
Solana is scheduled to launch its mainnet in 2021 with a wide range of dApps already populating the ecosystem. In order to test and strengthen the network prior to its mainnet launch, Solana is inviting teams to participate in several Hackathons. The Hackathons allow teams to experiment and leverage the Solana network for a range of projects – with prizes of up to $1 million on offer.
Solana is also working to expand its global reach. In May 2021, the network announced a $100 million investment from five funds to develop Solana’s presence in the Chinese crypto space. The funds come from Huobi, Gate Labs, NGC Ventures, the MATH Global Foundation, and Hash Key: some of the funds will be put towards infrastructure projects, company development, recruitment, and financial management, while others will be put towards growth opportunities for Solana in the Asia-Pacific region.