Solana is a platform that seeks to provide a foundation for decentralized applications (dapps) in a way that prioritizes scalability.
With this aim, Solana is one of several competing blockchain projects such as Ethereum, Zilliqa, or Cardano that hopes to grow an ecosystem of cryptocurrency-powered products and services.
To differentiate itself, Solana introduces a combination of architectural design choices that attempts to offer faster transaction settlement times and an infrastructure that focuses on flexibility that enables developers to write and launch customizable applications in multiple programming languages.
To achieve these features, Solana’s network’s native cryptocurrency, SOL, is used to execute custom programs, send transactions, and incentivize actors that support the Solana network.
For more regular updates from the Solana team, you can bookmark Solana’s Medium page, which includes monthly newsletters, feature updates, and explainer articles.
Solana was first conceptualized by Anatoly Yakovenko in 2017 who sought a decentralized network of nodes that could match the performance of a single node.
The Solana blockchain is guided by Solana Labs as a core contributor, while also being supported by the Solana Foundation, a Swiss-based non-profit dedicated to growing the community and funding development.
Yakovenko and his team began receiving funds in 2018 as part of Solana Labs. The team privately raised over $20 million in a Series A that spanned several months into 2019. After its mainnet launch in March 2020, Solana raised an additional $1.76 million in a public token sale carried out by cryptocurrency auction platform CoinList.
Who created Solana?
Solana was first conceptualized by Anatoly Yakovenko in 2017.
How Does Solana Work?
The Solana network offers many features common to other cryptocurrency networks such as smart contracting, transaction settlement, and token issuance. However, to distinguish itself from others, Solana hopes to offer better settlement speeds and a higher capacity for transactions.
Solana Network Architecture
Solana aims to achieve scalability through it’s network design and operates with eight core components to do so:
Proof-of-History – Global clock referenced to create a common schedule across all participants
Gulf Stream – Defines when and how transactions are exchanged
Sealevel – Processing engine that assigns the order and execution of transactions
Turbine – Defines how nodes how validate transactions (also known as validators) send and receive blocks
Cloudbreak – Memory mechanism used to keep track of participant balances
Pipeline – Verifies each component of a transaction
Archivers – Network of nodes where data is off-loaded from validators and stored in perpetuity
While technologically complex and intricate, each component is meant to optimize the amount of transactions Solana can execute without sharding its chain or using a layer two network.
Solana Delegated Proof-of-Stake Consensus
To secure its blockchain, Solana created a consensus mechanism called Tower BFT that incorporates what is commonly referred to as delegated proof-of-stake (DPoS).
DPoS uses a voting and reputation system to secure the network, validate transactions and distribute newly minted SOL, meaning that anyone who owns SOL tokens (sometimes referred to as SOL coins) can help operate the network.
Each SOL token can be locked, or “staked,” by participants (“nodes”) to both participate in governance and to increase the chances of being chosen to produce blocks.
Participants can also choose to delegate their SOL to other validators, allocating votes to them while earning a portion of the block rewards.
Why Does SOL Coin Have Value?
The SOL cryptocurrency plays a key role in maintaining and operating the Solana ecosystem.
Solana rewards validators and delegators with a portion of the newly minted SOL along with transaction fees based on the amount of SOL staked, the set inflation rate, and the complexity and amount of transactions on the network.
By owning SOL tokens, users can also access the suite of projects that have been built on the Solana network.
Similar to Ethereum, Solana enables developers to run custom smart contracts and design decentralized applications (dapps) to offer digitized products and services. Examples include Serum, an order-book style decentralized exchange service, and Raydium, an automated market maker (AMM) that provides liquidity to its ecosystem.
Why Use Solana (SOL)?
Users may find Solana appealing based on its attempt to create a scalable platform for decentralized applications without implementing sharding or second-layer technologies.
Further, developers may find the platform attractive for products and services that may warrant a high volume of activity.
Investors may seek to buy SOL and add it to their portfolio should they believe the market will one day favor more scalable blockchains.
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