Solana has been making headlines recently. With NFT projects migrating from the blockchain and the price decreasing after the FTX debacle, things have been challenging for this protocol.
Here's everything you need to know about it, from how it works to the issues it's looking to solve.
Getting a blockchain to work faster and more affordably will only depend on how difficult it is to scale up the network.
Many blockchain networks have created mechanisms and tools to promote scalability, from creating Layer 2 solutions to changing their consensus protocol.
However, innovation knows no limits, and Solana is looking to bring scalability to the ecosystem. This network emerged in the blockchain world as the fastest solution to the famous trilemma of blockchain networks: scalability, decentralization, and security.
So, what's Solana?
Solana is a Layer 1 blockchain looking to drive next-generation applications to achieve greater scalability and make them accessible to everyone.
It uses PoS and Proof of History (PoH) protocol, through which the network creates a time stamp, leaving a record of all events. While other blockchains require all validators to communicate simultaneously to determine a block's validation, in Solana, each validator has a built-in clock system that speeds up the process.
In other words, Solana only requires confirmation from part of the network before continuing to validate blocks. Hence, the PoH protocol presents a desirable advance regarding network structure, speed, and scalability.
More about their consensus protocol
Solana combines Proof-of-Stake with Proof-of-History (PoH), giving it a hybrid consensus algorithm. The latter ensures that a blockchain is faster while maintaining it decentralized and safe.
All Solana events and transactions are processed using the SHA256 hash function. With this function, Solana takes an input and produces a unique output that is extremely difficult to predict.
Solana takes the output of one transaction and uses it as input for the next hash, so the sequence of transactions is now embedded in the hashed result.
This hashing process creates a long, unbroken chain of hash transactions, generating a transparent and verifiable sequence of transactions that a validator adds to a block without needing a conventional timestamp.
The hash also takes a certain amount of time to complete, so validators can easily verify how much time has passed.
Let's dive deep into the main Solana characteristics
Solana is one of the fastest blockchains in the world, with block times of 400 milliseconds, and as hardware gets faster, so does the network. Today, Solana records 65,000 transactions per second (TPS), avoiding congestion and delays.
Low cost per transaction
Its scalability allows transactions to stay under $0.01 at all times for both developers and users.
Once applications (dApps) are integrated into the network, Solana ensures project compatibility maintaining a robust global network.
Why it's so popular with NFT projects
Solana saw huge popularity in 2021, mainly due to the massive increase in its price, as a consequence of the explosive growth of NFTs on the blockchain.
People preferred it over Ethereum because it was cheaper and much faster; users could mint NFTs at little or no cost, so hundreds of projects were launched.
SOL and SPL tokens
The network's token is $SOL, mainly used for transaction payment and network governance. The maximum supply of SOL is 489,000,000.
Users can stake their SOL and earn rewards while helping keep the network secure.
Solana also has the SPL token, the standard token of the Solana blockchain. The SPL token, like ERC-20 tokens on the Ethereum network, is a smart contract with an already-established structure to facilitate implementation for future developers who want to create new Dapps on the network.
Since its inception, the Solana blockchain has fulfilled its objective: to shorten network processing times. The hybrid protocol of PoS and PoH significantly reduces the times, both for transactions and for the deployment of smart contracts.
These qualities have attracted the interest of institutional investors (sometimes to the detriment of the network, like with FTX) and many retailer investors, who enjoy the speed of transactions and low fees.