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What is Solana?
03 February 14:55
By Victor Bastos, Gate.io Researcher
What is Solana?
Solana was founded by former software engineers from major tech companies Qualcomm, Intel and Dropbox at the end of 2017, while its token was officially released to the public in March of 2020.
It is a layer-1 blockchain network where developers can build projects and entire ecosystems through smart contracts. Due to its architecture, Solana is arguably the fastest blockchain platform in crypto. It processes about 65.000 transactions per second (TPS), extremely faster when compared to the other top projects.
SOL Token
SOL, built under Solana’s exclusive SPL model, has two main use cases:
- Payment for transactional fees when using the network or payment for its smart contracts.
- Staking as part of the Proof of Staking consensus mechanism. Not to be mistaken with Proof of History, which we’ll get to soon.
- Proof of History (PoH).
- BFT Tower: Solana’s safeguard system against the Practical Byzantine Fault, a consensus analysis method to make sure the network runs smoothly and is not subject to faulty mathematics.
- Gulf Stream: information transfer method without the need for mempools, which work as “waiting rooms” for crypto transactions that have not been confirmed yet. In other words, the Gulf Stream eliminates temporary intermediary memory of the network, which is the main tool for why transactions are so fast and seamless.
Proof of History is, in a nutshell, a very efficient way of reducing time spent in confirming transactions. It incorporates transaction records to prove that they really happened right before they are officially included in the blockchain.
Keywords: what is solana? solana token, smart contracts, nft marketplaces, defi, dapps, solana versus ethereum, main solana innovations, solana blockchain, what is proof of history?
[Full Article]
First things first, it’s important to define right away what is making Solana so special and attractive to crypto investors; unlike most blockchains currently in operation, the Solana network is very fast and cheap to operate on. Solana is also a highly scalable, smart contracts platform created to be used within the DeFi ecosystem.
In the project, developers are able to create financial offerings, games, NFT marketplaces and countless other functionalities in a very flexible manner. By choosing Solana as their network, crypto projects take advantage of a fast network with very low transaction fees.
The Solana token, SOL, experienced tremendous growth in 2021, after it opened its doors to DeFi and NFT applications to be built on their blockchain. Despite recent corrections experienced market-wide, Solana is still one of the most promising projects to maintain consistent growth in the digital asset class.
So what exactly is Solana, and how does it work? This article explains the main details that gave this prominent network the nickname of “Ethereum killer.”
What is Solana?
Solana was founded by former software engineers from major tech companies Qualcomm, Intel and Dropbox at the end of 2017, while its token was officially released to the public in March of 2020.
It is a layer-1 blockchain network where developers can build projects and entire ecosystems through smart contracts. Therefore, its platform works like an “app store” for crypto projects - a function that has been named dApps, or decentralized applications.
Other main current features and characteristics of Solana are:
- Its token is SOL.
- It is the second blockchain that received the most investments from Venture Capitals in 2021.
- It currently hosts over 350 dApps in its network.
- It is the fourth most utilized network for NFT marketplaces.
- It innovated blockchains by utilising Proof of History, or PoH, in its validation model. It avoids information overload in the network, as this article explains further below.
- The team’s main focus is to provide consistent scalability without sacrificing decentralization, speed, low fees or security.
SOL token
The SOL token was built on the SPL protocol, which is exclusively used in the Solana network - in the same way as the ERC-20 standard is used in the Ethereum network.
SOL has two main use cases:
- Payment for transactional fees when using the network or payment for its smart contracts.
- Staking as part of the Proof of Staking consensus mechanism. Not to be mistaken with Proof of History, which we’ll get to soon.
- Proof of History (PoH).
- BFT Tower: Solana’s safeguard system against the Practical Byzantine Fault, a consensus analysis method to make sure the network runs smoothly and is not subject to faulty mathematics.
- Turbine: information transmission protocol in its blockchain.
- Gulf Stream: information transfer method without the need for mempools, which work as “waiting rooms” for crypto transactions that have not been confirmed yet. In other words, the Gulf Stream eliminates temporary intermediary memory of the network, which is the main tool for why transactions are so fast and seamless.
- Sealevel: smart contracts parallel to SOL’s network.
- Pipelining: the area where transaction processing occurs.
- Cloudbreak: a data bank of all accounts connected to the network.
- Archivers: the storage method for the blockchain’s entire transactional history.
In order to learn what Proof of History is, it is important to understand the key points of how the Solana blockchain works when it comes to processing information and transactions:
- Transactions on Solana are all submitted through a hashing called SHA 256.
- This hash allows transactions to be mixed together and mashed randomly to improve the cryptography of the network
- The SHA 256 hash possesses a single input and a single output, which are unique to the transactions.
- The main innovation in Solana happens when the network gets the output of one transaction and uses it as the input for an upcoming transaction.
- This exclusive hashing process creates a long and uninterrupted chain of transactions, with verifiable orders.
- Through this method, a network validator adds another block to the blockchain seamlessly and without the need for a conventional “timestamp,” as utilized by Bitcoin and Ethereum’s for instance. That’s Proof of History.
Therefore Proof of History is, in a nutshell, a very efficient way of reducing time spent in confirming transactions. It incorporates transaction records to prove that they really happened right before they are officially included in the blockchain.
In Conclusion
The efficiency of the Solana network, combined with its technologies and all the interesting projects being built on it, has awakened immense interest across the crypto market. A mere look at its chart from 2021 will show that Solana was one of the fastest-growing crypto projects in the entire year, currently holding the 7th position in the global crypto market cap.
Solana’s architecture, fueled by a uniquely efficient way of verifying transactions through PoH combined with the PoS standard consensus, makes it one if not the strongest competitor against Ethereum and other smart contract platforms.
If all goes according to plan and the network continues to grow in scale while holding its most impressive features, there is nothing stopping the Solana network and its SOL token from taking increasingly larger shares from the crypto ecosystem and becoming a daily driver for dApps.
Author: Gate.io Researcher: Victor Bastos
* This article represents only the views of the researcher and does not constitute any investment suggestions.
*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.
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