All about Solana

What Is Solana (SOL)?
Solana is a highly functional open source project that banks on blockchain technology’s permissionless nature to provide decentralized finance (DeFi) solutions. While the idea and initial work on the project began in 2017, Solana was officially launched in March 2020 by the Solana Foundation with headquarters in Geneva, Switzerland.

Solana is a blockchain platform created in 2017 that allows decentralized and scalable applications to operate. It is run by the Solana Foundation and was developed by Solana Labs in San Francisco. Compared to other blockchains like Ethereum, Solana processes a higher number of transactions and has lower fees. The cryptocurrency associated with Solana, named SOL, experienced a massive rise of nearly 12,000% in 2021, achieving a market cap over $75 billion. As of 2024, SOL continues to be among the largest cryptocurrencies.

Key features of Solana include its ability to process more transactions per second and its reduced fees versus other platforms. It operates on a proof-of-stake (PoS) model enhanced by a unique concept called proof-of-history (PoH), which timestamps transactions for faster verification.

The co-founder of Solana, Anatoly Yakovenko, utilized his experience in distributed systems to develop PoH. This concept allows the blockchain to achieve rapid transaction speeds, improving scalability beyond other networks like Bitcoin and Ethereum. Traditional blockchains without a unified time system faced challenges in achieving high transaction numbers.

In his 2017 white paper, Yakovenko proposed PoH as a way to reach consensus by recording the passage of time in the blockchain ledger. This eliminated the issues of nodes relying on their local clocks, ensuring participants in the network would agree on timestamps.

Solana also uses a standard for creating tokens, known as SPL Token, which is similar to Ethereum’s ERC-20 standard. Its design enables it to overcome performance limitations, leading to increased scalability and decentralization. Speculation suggests that Solana could potentially reach transaction speeds of up to 710,000 transactions per second under ideal conditions.

Solana distinguishes itself from Ethereum in several respects. Both have smart contract capabilities crucial for decentralized finance and non-fungible tokens. However, Solana’s PoH improves the PoS system further by enabling quicker transaction verification. As of September 2024, Solana can manage more than 2,400 transactions per second at a cost of about $0. 00026, while Ethereum struggles with fewer than 15 transactions per second and charges around $0. 30 per transaction.

Ethereum enjoys a leading position in the blockchain space and has undergone significant upgrades to improve its scalability and security. The future developments of Ethereum may affect Solana’s competitiveness.

The future of Solana remains uncertain despite its strong following in the trading community. Decisions on whether to buy, hold, or sell SOL depend on individual risk tolerance and investment strategies. On September 18, 2024, SOL was valued at approximately $129. Overall, Solana competes closely with Ethereum in terms of capabilities and market presence.

To learn more about this project, check out our deep dive of Solana.

The Solana protocol is designed to facilitate decentralized app (DApp) creation. It aims to improve scalability by introducing a proof-of-history (PoH) consensus combined with the underlying proof-of-stake (PoS) consensus of the blockchain.

Because of the innovative hybrid consensus model, Solana enjoys interest from small-time traders and institutional traders alike. A significant focus for the Solana Foundation is to make decentralized finance accessible on a larger scale.

Who Are the Founders of Solana?
Anatoly Yakovenko is the most important person behind Solana. His professional career started at Qualcomm, where he quickly moved up the ranks and became senior staff engineer manager in 2015. Later on, his professional path shifted, and Yakovenko entered a new position as a software engineer at Dropbox.

In 2017, Yakovenko started working on a project which would later materialize as Solana. He teamed up with his Qualcomm colleague Greg Fitzgerald, and they founded a project called Solana Labs. Attracting several more former Qualcomm colleagues in the process, the Solana protocol and SOL token were released to the public in 2020.

What Makes Solana Unique?
One of the essential innovations Solana brings to the table is the proof-of-history (PoH) consensus developed by Anatoly Yakovenko. This concept allows for greater scalability of the protocol, which in turn boosts usability.

Solana is known in the cryptocurrency space because of the incredibly short processing times the blockchain offers. Solana’s hybrid protocol allows for significantly decreased validation times for both transaction and smart contract execution. With lightning-fast processing times, Solana has attracted a lot of institutional interest as well.

The Solana protocol is intended to serve both small-time users and enterprise customers alike. One of Solana’s main promises to customers is that they will not be surprised by increased fees and taxes. The protocol is designed in such a way as to have low transaction costs while still guaranteeing scalability and fast processing.

Combined with the longstanding professional expertise creators Anatoly Yakovenko and Greg Fitzgerald bring to the project, Solana is ranked number 7 in the CoinMarketCap ranking as of September 2021.

This came on the back of an impressive bull run, where Solana price gained over 700% since mid-July 2021. The launch of the Degenerate Ape NFT collection sent SOL price to an all-time high (ATH) above $60, and it has been climbing since, largely due to higher developer activity on the Solana ecosystem, greater institutional interest, growing DeFi ecosystem, and the rise of the NFTs and gaming vertical on Solana. Solana price rose to an ATH of $216 on Sept. 9, 2021.

Solana has received much praise for its speed and performance, and has even been tipped as a rival that can compare to Ethereum and challenge the dominant smart contract platform. However, the network has been plagued by repeated outages that have impaired its price and aspirations to be the “Visa of crypto.” Furthermore, its ecosystem is accused of favoring venture capital investors with unfair tokenomics.

How Many Solana (SOL) Coins Are There in Circulation?
The Solana Foundation has announced that a total of 489 million SOL tokens will be released in circulation. At the moment, about 260 million of these have already entered the market.

The SOL token distribution is as follows: 16.23% went towards an initial seed sale, 12.92% of tokens were dedicated to a founding sale, 12.79% of SOL coins were distributed among team members and 10.46% of tokens were given to the Solana Foundation. The remaining tokens were already released for public and private sales or are still to be released to the market.

Solana price during the initial seed sale, held on April 5, 2018, was $0.04. Given the recent ATH, that represents an impressive 5400X return on investment (ROI).

How Is the Solana Network Secured?
Solana relies on a unique combination of proof-of-history (PoH) and proof-of-stake (PoS) consensus mechanisms.

Proof-of-history is the main component of the Solana protocol, as it is responsible for the bulk of transaction processing. PoH records successful operations and the time that has passed between them, thus ensuring the trustless nature of the blockchain.

The proof-of-stake (PoS) consensus is used as a monitoring tool for the PoH processes, and it validates each sequence of blocks produced by it.

The combination of two consensus mechanisms makes Solana a unique phenomenon in the blockchain industry.

Where Can You Buy Solana (SOL)?
SOL tokens can be purchased on most exchanges. One choice to trade Solana is on Binance, as it has the highest SOL/USDT trading volume, $753,103,225 as of September 2021.

Next is Coinbase, with a trading volume of $343,872,841. Other options to trade Solana include Bilaxy and Huobi Global. Of course, it is important to note that investing in cryptocurrency comes with a risk, just like any other investment opportunity.

To check Solana price live in the fiat currency of your choice, you can use CoinMarketCap’s converter feature directly on the Solana currency page, or the dedicated exchange rate converter page. Popular Solana price pairs include: SOL/USD, SOL/GBP, SOL/AUD, SOL/JPY and SOL/EUR.

What Is Solana (SOL)?

Introduction
Solana is a blockchain platform aimed at hosting decentralized and scalable applications. Founded in 2017, it is maintained by the Solana Foundation in Geneva with the blockchain developed by Solana Labs in San Francisco.

Key Points

• High Throughput: Solana can process a larger number of transactions quickly and with lower fees than competitors like Ethereum. In 2021, the Solana cryptocurrency (SOL) experienced a dramatic price increase of nearly 12,000%.
• Market Position: By 2024, SOL continues to stand among the top cryptocurrencies by market capitalization, with a value of around $129.
• Unique Technology: Solana utilizes a proof-of-stake (PoS) system improved by a proof-of-history (PoH) mechanism, which enables rapid transaction verification.
• Founder’s Background: Co-founder Anatoly Yakovenko’s experience in distributed systems led to the insight that synchronized time across the network would enhance speed, overcoming limitations seen in older blockchains like Bitcoin and Ethereum.
• Consensus Mechanism: PoH allows transactions to be timestamped quickly, enhancing overall blockchain efficiency. Instead of typical validator nodes, it employs clusters of validators working collaboratively.

Comparison with Ethereum

• Smart Contracts: Solana and Ethereum both support smart contracts, essential for applications in decentralized finance (DeFi) and non-fungible tokens (NFTs).
• Transaction Speed and Cost: Solana offers significantly superior transaction speeds (over 2,400 TPS) and lower costs ($0. 00026 per transaction) compared to Ethereum’s fewer than 15 TPS and average fees around $0. 30.
• Ethereum Upgrades: Ethereum’s 2022 update aimed to enhance scalability and security, but it’s uncertain how this will impact Solana’s growth.

Future Outlook

• Popularity: Solana has garnered considerable support among traders and investors, although its future remains uncertain.
• Investment Decision: Whether to buy, hold, or sell Solana should depend on individual market outlook, risk tolerance, and investment strategies.

Conclusion
Solana presents a blockchain offering capabilities that may rival or exceed those of Ethereum, enjoying significant popularity and holding a substantial market share with its SOL token.