What is Solana? ($SOL)
Solana is a public base-layer blockchain protocol that optimizes for speed, scalability, and building user-friendly apps. It is one of the fastest growing ecosystems in crypto, with thousands of projects spanning DeFi, NFTs, Web3 and more.
$SOL is Solana’s native and utility token that provides a means of transferring value as well as blockchain security through staking.
Solana was originally proposed in a whitepaper by Anatoly Yakovenko in November 2017. This paper described a new consensus mechanism called ‘proof of history’ which is a new timekeeping technique for distributed systems.
Anatoly built a team of former Apple engineers and Qualcomm veterans and began fundraising in 2018 as part of Solana Labs. The team raised over $20 million privately in a Series A that spanned into 2019. After its mainnet launch in March 2020, Solana raised an additional $1.76 million in a public token sale carried out by cryptocurrency auction platform CoinList.
Solana Labs remains a major contributor to the Solana network, and the Solana Foundation assists in funding continuing development and community-building initiatives.
Solana is a general-purpose, base-layer blockchain that enables the development of dApps through smart contracts just like Ethereum but is different when it comes to how it’s built.
Solana introduced a new consensus mechanism called ‘Proof of History’, a timekeeping technique for distributed systems that helps in eliminating the issue of scalability and reduces the time needed to reach consensus on transactions. It is designed to keep time between computers on a decentralized network without all the computers having to communicate about it and come to an agreement.
The Solana blockchain uses a combination of both Proof of History and delegated Proof of Stake protocols to reach consensus on transactions, making it pretty fast and capable of processing tens of thousands of transactions per second.
You can learn more about Proof of History in Yakovenko’s original article from 2018.
Solana claims a theoretical throughput of 65,000 transactions a second with near zero fees making it an enticing option for a lot of developers and crypto enthusiasts. The explosive growth that the DeFi and NFT spaces have experienced has often resulted in extremelty high gas fees on Ethereum causing crypto users to seek other options like Solana.