Solana (SOL) is a blockchain that aims to revolutionize the cryptocurrency ecosystem through its scalability and technological innovations. The latter knew how to surround itself with great personalities of the ecosystem to reach the highest capitalizations of the market. By developing rapidly, the blockchain at Proof of History was able to attract many users of decentralized finance (DeFi). Find out how Solana works and what it brings to the blockchain world.
What is the Solana Protocol (SOL)?
Launched in March 2020, Solana is an open-source blockchain with the goal of facilitating access to decentralized finance.
Its execution capacity of 60,000 transactions per second makes it a project capable of supporting many applications. Its founders define it as being endowed with an original architecture making it possible to optimize the performance of the chain. The average fee for a transaction on Solana is around $0.00025.
Announced as a competitor to the Ethereum blockchain, the Solana blockchain ecosystem is growing day by day: the recent launch of Solstarter is proof of this. Now anchored in the top 10 of the most important capitalizations, the work of Anatoly Yavovenko and his team has found its audience.
This blockchain is powered by Solana Labs, a California-based company in San Francisco, and also has offices in Geneva, Switzerland.
Solana stands out thanks to an atypical architecture and transaction validation system. The developers designed a consensus model called Proof of History (PoH). Transactions are validated once they have met a time requirement. PoH helps ensure fast transaction speed and ensure blockchain security, and decentralization.
The Technology Behind the Solana blockchain
The Proof of History in Detail
A node is defined as the provider of a sequence which will serve as certification for the Proof of History. This process uses cryptography to determine an elapsed time interval between two given functions. This system is secured by checking the entry and exit times of the transaction, which are broken down into several events grouping together data.
Anatoly Yakovenko talks about the verifiable delay function. This system makes it possible to obtain a single outcome recorded and viewable by all.
The Solana protocol offers continuous sequential hashing where successive outputs lead to the inputs of subsequent steps. During these transitions, the hash data streams from one step to the next. This concerns the state, the inserted data and the count.
As long as functions are pre-imaged and collision-proof, it is impossible to create a history with an identical hash or set up a desired hash using an existing entry. Solana is able to prove that the data included in a transaction existed before it.
Proof of History references can be used for entries that themselves use this mode of transaction validation. In these situations, the user’s private key is absolutely necessary for the message signature. This security ensures that the hash was generated after the start of the transaction count.
The Proof of History verification process is quite specific: it is possible to carry out the verification in parallel while the original hash is only generated at the heart of a single CPU. Each sample can be checked individually, which makes it possible to achieve the high computational speed that characterizes the POH. We then calculate the validation time using the formula: (1/number of cores)
The Other Technologies Underlying the Solana Blockchain
The Proof of History is not the only innovation that accompanies the Solana blockchain in its conquest of the ecosystem. The developers have innovated on many points so that the network can follow a high rate of transactions without skimping on the security of the infrastructure.
Tower Byzantine Fault Tolerance, or Tower BFT, is an algorithm that uses Proof of History to help it reach consensus without having to send a stream of data between nodes.
By reducing the strain on nodes and the data, they have to process, Tower BFT significantly boosts transaction execution speed.
A block propagation protocol, Turbine is heavily inspired by the way BitTorrent works. This protocol is able to optimize the way blocks are transmitted, independent of consensus. Thus, before a new block is transmitted over the network, it is effectively subdivided into small packets.
Turbine greatly improves the scalability of the Solana blockchain, optimizing transaction processing.
A mempoolless transaction transfer protocol, Gulf Stream pushes the capabilities of the Solana blockchain even further. This protocol is at the heart of the scalability aspect of Solana, and it is thanks to it that this blockchain is able to process so many transactions.
Gulf Stream is responsible for the processing of transactions by the validators and routes all the information necessary to execute them to the network. With Gulf Stream, validators can even execute transactions ahead of time.
This technology allows Solana to do without a mempool, which is similar to a transaction waiting area, which is found on many blockchains, such as Bitcoin or Ethereum in particular.
The Solana Protocol ecosystem
Just like Ethereum, Solana has an entire ecosystem associated with its blockchain. Exchanges, decentralized applications (dApps), tools or portfolios, there are already more than 420 projects within the Solana ecosystem on the Ecosystem tab of their website.
Since its launch in March 2020, many applications have come to be built on the Solana blockchain. First, the low transaction fees and short confirmation time attract users fleeing Ethereum to its decentralized applications.
And on the developer side, the ability to develop in C, C++ and Rust, as well as the guarantee of not having to move to layer 2 in the future, thanks to Solana’s scalability promises, are very attractive features.
Solana is proving to be a good platform for decentralized finance (DeFi), especially with the arrival of USDT stablecoins from Tether in September 2020 and USDC from Circle and Coinbase the following month.
The most famous DeFi application of this blockchain is Serum. This decentralized exchange (DEX), developed by the FTX platform and Solana themselves, uses an on-chain order book, the existence of which is made possible by the speed and low costs of this blockchain.
But Serum has gone much further by implementing, for example, an inter-chain swaps functionality with Ethereum and Bitcoin, for example. It now processes volumes sometimes exceeding 50 million dollars daily.
Other innovative projects have also emerged on Solana, such as Solanart, a platform for non-fungible tokens (NFTs), or Civic and its ecosystem of decentralized identities. And many projects are deployed every week on this blockchain, in particular through Solstarter, the first platform dedicated to Initial DEX Offerings (IDO) on Solana.
Wallets and tools
To store their public and private keys of the Solana blockchain, users have the choice between several digital wallets: Phantom, Solflare and Sollet for online wallets, and Trustwallet and Exodus for mobile wallets.
The blockchain also has a complete explorer, Solanascan, like most other competing blockchains, as well as the indexer with 500 million requests per day, The Graph.
Here is a snapshot of the Solana blockchain ecosystem as of October 2021:
What is the SOL Token Used for?
The SOL token is the native token of the Solana platform, and it plays many roles within the ecosystem.
Validators are chosen based on the amount of SOL they have. Those who have the most will be selected first to certify transactions. Delegators use tokens deposited by validators to get lower fees. In exchange, they provide a commission to the latter. SOLs are also used to pay network transaction fees, which are very low.
To stake their tokens, users can go through Solflare.com, Solana’s dedicated platform, or even Phantom, one of the most widely used and popular wallets among users.
Solana’s Fundraising and its SOL Token
The Solana ICO took place from March 16 to 24, 2020, a few days after the Covid-19 crash in the cryptocurrency markets. $25,660,000 was raised during this phase.
Subsequently, Solana had other fundraisers, in particular in May 2021, to raise 100 million dollars from Huobi, Gate Labs, NGC Ventures, HashKey Group and MATH Global Foundation to develop in Asia. At the same time, in order to continue its international development strategy, Solana raised 60 million to expand to Brazil, India, Russia and Ukraine.
In addition to the desire for international ascent, Solana does not neglect technological progress and uses its most recent fundraising of 314 million dollars for the creation of an incubator. This will have the role of accompanying the most ambitious projects based on the Solana blockchain and seeking financial assistance.
With the recent activities related to non-fungible tokens, Solana has not failed to use the funds raised from two solid exchanges, OKEx and MXC, to develop NFTs.
The Solana project was co-founded by people experienced in telecommunications and data science. Here are the founding members of the Solana blockchain:
CEO and Founder: Anatoly Yakovenko is a specialist in the telecommunications sector. He has worked on distributed networks at Qualcomm, Dropbox and Mesosphere. He published Solana’s whitepaper in November 2017.
Co-founder: Stephen Akridge, recruited by Anatoly in the creation of Loom. He also worked at Qualcomm.
Co-Founder and CTO: Greg Fiztgerald joined Anatoly, with whom he previously worked for Qualcomm. At the time, he led part of the research teams. He has published many open-source projects during his career. He was the one who suggested coding the Solana project in Rust.
Co-founder and Scientific Director, Éric Williams: Doctor of Physics with a degree from Columbia University; he worked for Omada Health and is now an expert in Data Science.
Co-founder and COO: Raj Gokal. After spending ten years working in finance and as a product manager, Raj Gokal is now in charge of product and trade issues for Solana Labs.
On the Solana Labs LinkedIn page, there are nearly 100 employees attached to the protocol.
Solana has forged many partnerships. These include the stablecoins USDT and USDC. The volume of transactions executed per second attracted Tether Ltd and Centre, which have been collaborating with the California project since fall 2020.
Solana also works with exchanges such as Binance and Crypto.com. Anatoly Yakovenko’s team also rely on wallet specialists like Phantom and Ledger. The foundation highlights on its Medium page the Audius streaming platform or Whormole, a bridge between the Solana and Ethereum blockchains.
Alongside this, Solana has skyrocketed via the undisputed backing of the FTX exchange platform owned by Sam Bankman-Fried, aka SBF. Very well known on social networks, Sam was able to promote the blockchain via his various tweets. By setting up his decentralized exchange Serum on Solana, he proved the effectiveness of the latter.
How to Buy SOL?
For trading comfort, notably facilitated by the high liquidity of the platform, we recommend that you use Binance to buy and sell SOL.
Explanations for Buying SOL on Binance
- Register on Binance;
- You will receive an email and need to click on a link to verify your account
- Deposit funds on the platform;
- Click on the Market menu and look for the pair SOL/USDT;
- All you have to do is buy SOL for the amount of your choice;
- Congratulations, you are now in possession of SOL tokens.
You also have the option of using an online wallet like Phantom, designed specifically to deposit your SOL tokens. This allows access to staking, and all kinds of tokens from the Solana blockchain can be placed there. In the same vein, the Sollet wallet developed by the Serum teams has the same functionalities and works like a chrome extension.
The TrustWallet and Exodus mobile wallets also allow you to send and receive SOL.
Finally, the MetaMask wallet gives the possibility of storing SOLs in a simple and fast way.
Solana (SOL) Protocol Ratings and Reviews
The future is multi-chain, and Solana seems to have become one of the most widely used blockchains. Thanks to a new type of consensus, the Proof of History, Solana is part of this new generation that is trying the crazy bet to compete with Ethereum.
With the congestion of costs on the mother blockchain of smart contracts, the invention of Anatoly Yakovenko and his team has been able to take significant market shares in all sectors, particularly in the world of decentralized finance or, more recently, with non-fungible tokens.
Of course, Solana is not free from flaws starting with the decentralization of its protocol (only 1,080 validators in October 2021). But that’s nothing compared to the total shutdown of the latter for a day following a transaction problem forcing a complete restart.