What is Solana (SOL)?
Solana is an open framework for building scalable cryptographic applications. The architecture is censorship-resistant, fast, and secure, and is designed to facilitate global adoption. To keep time on the blockchain, Solana uses an innovative process called Proof of History. PoH is not a consensus mechanism, but it plays an important role in Solana's Proof of Stake consensus mechanism.
The result of PoH and other key Solana innovations is a highly scalable network. In fact, Solana can boast a peak throughput of 50,000 transactions per second. The blockchain remains cheap and fast as it scales, with average transaction fees of $0.00025, block creation times typically less than a second, and finality times of less than a second.
Solana also maintains the ability to interoperate across ecosystem projects with a single global state, meaning there is no need to integrate with multiple shards or layer 2 solutions. Other benefits of Building on Solana include enterprise-grade flexibility and security that has been tested in popular coding languages such as C, C++, and Rust.
How does Solana work?
Historical Proof
The concept of historical proof involves proving that a message occurred before or after a known event, rather than relying on a timestamp. This is similar to how a photo of a hostage holding the latest edition of a newspaper proves that the hostage was alive after that particular newspaper was published. Solana uses Bitcoin's SHA256 mining algorithm with the addition of verifiable timestamps to create a historical record of events on the blockchain.
The hash function repeats continuously, using each previous output as the next input, i.e. the order in which transactions are recorded. This means that blockchain validators can group as many transactions as possible into each block, because other validators can sort them based on historical records after the fact. The result is a very high transaction throughput.
Sealevel For most blockchains, their throughput only applies to base token transactions. However, for Solana, the 50,000 TPS capacity also applies to smart contracts. The Ethereum and EOS virtual machines have single-threaded runtimes, meaning that the state of the blockchain can only be changed by one contract at a time. On the other hand, Solana implements Sealevel, a runtime capable of processing tens of thousands of smart contracts in parallel.
Who founded Solana? (History of Solana)
Solana was created by Solana Labs, founded in San Francisco in 2017 by a team of software engineers led by Anatoly Ykovenko. Ykovenko, along with several other members of the Solana team, spent many years working at Qualcomm, a Fortune 500 company that provides semiconductors, software and wireless technology services for phones mobile. Qualcomm is headquartered in San Diego, just south of Solana Beach in California, which inspired the cryptocurrency project's name. Although not initially interested in cryptocurrencies, Ykovenko came up with the idea of improving the efficiency of blockchains with historical proofs during a caffeine-induced fever dream. He teamed up with his Qualcomm colleague Greg Fitzgerald, now Solana's chief engineer, to work on the project. Solana released its whitepaper and internal testnet in February 2018, while the Solana mainnet and SOL token launched in 2020.
What makes Solana unique?
The main concept that sets Solana apart from all previous blockchains is historical proofs, which give it the highest throughput of any Layer 1 blockchain at the time of writing. This also applies to smart contracts thanks to Sealevel, the world's first parallel smart contract execution environment.
These are just two of the eight core innovations that give Solana its unique selling point to attract global enterprises. The others are Tower BFT, Solana's custom implementation of Practical Byzantine Fault Tolerance; Pipeline, a web-scale transaction processor; Turbine, Solana's block propagation protocol that solves the trifecta of blockchain scalability problems; Cloudbreak, the project's peer-to-peer account database; Gulf Stream, a mempool-less transaction propagation protocol; and Archivers, Solana's blockchain data storage solution.
What makes Solana valuable?
The value of the Solana network comes from the eight core innovations listed above, which allow the network to outperform most other blockchains and provide a scalable environment for global enterprises to deploy cryptocurrency applications.
The value of Solana's native SOL cryptocurrency comes from its utility. SOL can be used to secure the network through staking, as a validating node, or as a proxy. This is a beneficial option for SOL holders, as stakers receive half of the transaction fees and a majority of the new token issuance. SOL is also useful for developers and users of cryptocurrency applications in the Solana ecosystem because it pays for transaction fees. As the Solana ecosystem grows and the blockchain processes more transactions, SOL will become more valuable as demand from investors, developers, and users increases.
How many Solana (SOL) are in circulation?
There are currently a total of 465,591,160 SOL in circulation. There is no EXCHANGE. When SOL launched, it had an initial total supply of 500 million tokens, but there was no maximum supply cap. Solana's initial inflation rate is 8%, which will then decrease by 15% per year until 2031, when the long-term stable inflation rate will be 1.5%. Currently, half of the transaction fees are burned, meaning that higher transaction volumes will slow the growth of the circulating supply.
Other technical data
From the initial SOL offering, the team retained 12.79%, 10.46% went to the Solana Foundation, 12.92% was allocated to the founding sale, 16.23% to the initial seed sale, and the rest to public and private sales. Solana Labs raised $25.66 million in the initial coin offering of SOL and received an additional $314 million from private token sales including Andreessen Horowitz, Alameda Research, and ParaFi Capital..