Solana Review: Will It Scale Faster Than Ethereum?
Mike Harry
Jul 2023
7 min read
Fact checked
Summary: Solana takes center stage in this breakdown as we go deep into its inner workings. From its unique consensus algorithm (POH) to its lightning fast transaction speed, Solana is a one-of-a-kind monolithic blockchain. This article provides a comprehensive breakdown of why and how Solana stands out compared to other blockchains!
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Solana History
Solana was founded by Anatoly Yakovenko who was a former engineer at Qualcomm and Greg Fitzgerald, who previously worked at Apple.
Other prominent members of the team include Raj Gokal, former Vice President of Product at Google and Eric Williams, who serves as the Chief Scientist.
Solana website
The history of Solana dates back to 2017 when Yakovenko and Fitzgerald were frustrated with the limitations of existing blockchain protocols in terms of transaction throughput and scalability.
They wanted to create a platform that could handle the demands of real-world applications and provide a seamless user experience.
The Solana testnet was launched in 2019 and one year later the mainnet launched. In 2021, Solana achieved a throughput of 50,000 transactions per second.
Solana is still under development but it has the potential to be a major player in the blockchain industry. No other blockchain can currently match it's output when it comes to throughput and low fees.
In March 2020, Solana raised $1.76 million in a private token sale which was led by Multicoin Capital. Since then, Solana has raised a total of $314 million in funding from investors such as Andreessen Horowitz, Polychain Capital, and Multicoin Capital.
The platform has seen a wide range of projects being built on top of it including decentralized finance (DeFi) applications, non-fungible token (NFT) marketplaces and gaming platforms.
What is Solana?
Solana is a high-performance blockchain addressing scalability and decentralisation challenges faced by traditional blockchains.
Solana's architecture is designed to achieve high throughput and low latency. It employs a unique combination of technologies such as Proof of History (PoH), Tower BFT consensus, and a decentralized clock to bring scalability without sacrificing security.
PoH is Solana's foundational technology that provides a source of time within the network. It acts as a historical record that enables efficient and secure chronological order of events.
Solana uses a practical Byzantine Fault Tolerance (BFT) consensus algorithm known as Tower consensus. This consensus mechanism allows the network to achieve finality (block confirmation).
It enables faster block confirmation times by rotating the leadership role among validators, reducing the time required to commit transactions.
Solana also achieves higher scalability through various mechanisms such as parallel processing which allows validators to process several transactions simultaneously.
How does Solana work?
Solana is a high-performance blockchain platform designed to support decentralized applications and crypto-currencies. Below are the key concepts and technologies used in Solana:
Proof of History (PoH): Solana uses a novel timekeeping method called Proof of History, which is the backbone of the Solana protocol. Tower BFT (Byzantine Fault Tolerance): Solana uses the Tower BFT consensus algorithm, an optimized version of the classical PBFT model. Turbine: Solana uses a block propagation protocol called Turbine to handle the large amount of data that comes with high-speed transaction processing. Gulf Stream: This is Solana's mempool management protocol, which forwards transaction caches to validators before the start of the next block. Sea Level: Sea Level is Solana's parallel smart contracts runtime, which allows for simultaneous processing of transactions on different threads. Pipelining: This is a transaction processing unit for validation optimization that assigns data processing work to different hardware in the system, similar to a GPU. Cloudbreak: Cloudbreak is Solana's horizontally-scaled accounts database, which allows the network to handle a high throughput of transactions.
Solana Coin (SOL)
The native token of the Solana network is called SOL. SOL plays a vital role in the Solana ecosystem as it serves as both a utility token and a governance token.
As a utility token, SOL is used for paying transaction fees on the network and interacting with smart contracts.
SOL holders can participate in the governance of the Solana network by staking their tokens and voting on proposals and protocol upgrades.
This allows token holders to have a say in the development and direction of the platform making it a truly community-driven network.
Solana Tokenomics (SOL)
Solana has a total supply of 551,546,960 SOL tokens and a circulating supply of 400,893,153.
The distribution of SOL tokens has undergone several phases, including private sales, public sales, and community distributions.
16.23% has been allotted to the Solana Foundation, 12.3% to the Solana team, another 12.3% to the Solana ecosystem, and the majority share of 59.27% is set to be mined.
At the time of writing, the price of Solana (SOL) is $19.10 with a fully diluted market cap of $10,536,755,250 and a 24-hour trading volume of $348,193,902.
eToro USA LLC: Investments are subject to market risk. Including the possible loss of principal.
Author
Mike Harry
Mike is a passionate crypto enthusiast who bought his first Bitcoin in 2016. With a natural curiosity and a love for learning and tinkering, Mike is always trying out new DeFi applications. Mike excels at breaking down difficult concepts into easy-to-read guides for beginners.
