Solana (SOL): Is It The Next Ethereum?

Introduction to Solana

Solana is widely known as a high-speed single-layer blockchain providing the open infrastructure required for global adoption.

Solana builds a firm foundation for decentralized applications (dApps) including Defi and NFT projects.

Solana managed to solve the earlier blockchains’ issues related to transaction settlement speed and bandwidth by combining the Proof-of-Stake (PoS) mechanism with a new consensus called Proof-of-History (PoH) to rapidly verify transactions and new block production.  

With the capability of processing 50,000 transactions per second (TPS), the Solana blockchain has set itself apart from other existing blockchain networks such as Cardano, Ethereum, etc. which are struggling to solve the transaction throughput issue. 

About SOL token

Solana (Symbol: SOL) is the native cryptocurrency of the Solana blockchain.

SOL token plays a vital role in maintaining stability and security while providing network participants with economic incentives.

SOL token can be used for the following purposes:

• Transaction fee: SOL serves as a payment for on-chain activities, such as building smart contracts, executing transactions, etc.
• Staking: SOL holders can stake their tokens and get rewarded.
• Governance: SOL holders have the right to vote on internal improvements and future proposals submitted by the Solana community.

How Solana works

Key blockchain technologies contributing to the proper operation of the Solana platform include: 

1) Proof of History enables on-chain transaction time to be recorded instantly and correctly. 

Regardless of time zone differences, the Solana network sets a standard clock or a timestamp to facilitate the verification of transactions.

2) Tower BFT is a consensus protocol that supports the proof of history mechanism.

3) Turbines are used to break down big transactions into smaller fractions to reduce bandwidth and make the network more efficient and time-saving. 

4) Clusters: refers to a group of people who participate in verifying transactions and validating new blocks.

5) Gulf Stream: is known as the unconfirmed transactions recorded in the mempool.

6) Pipelining: allows the Solana network to process a large number of transactions at once.

7) Cloudbreak: is an accounts database with horizontal scaling that improves the data flow on storage drives.

8) Archivers function as a distributed ledger store. 

Instead of validators’ nodes, the data of Solana is fractionalized and saved on a network of nodes called Archivers.

Features of Solana

Solana stands out among other blockchain networks with the following prominent features: 

• Processing speed: Solana has a processing speed that is 3,800 times faster than Ethereum and 10,000 times faster than Bitcoin. Thanks to its hybrid protocols, Solana just takes 600 milliseconds to create a new block. 
• Scalability: Known as a high-scalability blockchain, Solana supports 50,000 transactions per second (TPS).
• Low-transaction fee: Solana offers lower transaction fees compared to similar blockchain networks, about $0.00025 per transaction.

Who is behind Solana?

Team

Founded in 2017, Solana is led by a group of experts with considerable working experience in big tech companies such as Apple, Qualcomm, Intel, Google, etc.

•  Anatoly Yakovenko: the current CEO of the Solana Foundation
•  Raj Kokal: the COO of Solana

Investors

Founded in San Francisco, Solana Labs makes a significant contribution to the Solana Network and the blockchain system. Since its launch, Solana Labs has raised $314 million in a token sale conducted by Adresseen Horowitz and Polychain in collaboration with other investors.

Outlook on Solana

The year 2021 witnessed the exponential growth of the Solana ecosystem in both quantity and quality with hundreds of new projects built on Solana. The total value locked (TVL) of the Solana platform worth $14B is only behind Ethereum and Binance Smart Chain. 

Solana’s native token, SOL, is currently sitting in the top ten cryptocurrencies by market cap. With many outstanding features such as high processing speed, a hybrid of PoS and PoH consensus, massive transaction throughput, etc., the Solana network is undoubtedly a serious contender for other prominent blockchains, proving itself a worthy investment in the long term. 

Explore all the trending topics and hottest news in the crypto market with our Blogchain.

Meanwhile, practice trading, play virtual money and earn real tokens with CryptoSim - Virtual Trading Game.