A Deep Dive Into: Solana

Everything You Need to Know About Solana In Under 5 Minutes

What Is Solana?

Solana is a fast, secure, and censorship-resistant blockchain that aims to provide open infrastructure required for global adoption. It supports a peak capacity of 65,000 transactions per second and 400ms block times.

The Solana Protocol is designed with facilitating decentralized app (dApp) creation in mind. It aims to improve scalability by introducing a proof-of-history (PoH) consensus mechanism which is combined with proof-of-stake consensus (PoS) within the blockchain. Confused yet? Don’t worry, we’ll break this down for you.

Pain Points Solana Sets Out To Solve

Scaling Issues

One of the biggest issues it tries to solve is scalability, as these issues continue to be a bottleneck within the crypto market. Early blockchains had a heavy reliance on the proof-of-work consensus mechanism, and this has led to major congestion issues. 

The industry leaders Bitcoin and Ethereum were designed to increase the transaction fees as the network’s congestion rose. As both Bitcoin and Ethereum continue to gain exponential adoption, we’ve seen network fees and delays on the rise.

How Does Solana Solve Them?

Proof Of History

Solana solves high fees and slow transactions  by relying on a combination of proof-of-history (PoH) and proof-of-stake (PoS) consensus mechanisms.

Proof-of-history is one of the main components when it comes to the Solana protocol and is responsible for the bulk of transaction processing. It involves a decentralized clock (SHA256 hash function), which is used as a reference for timestamping.

PoH timestamps each transaction when added to a Solana block, which is generated every 400ms. By comparison, Ethereum is 15 seconds per block, and Bitcoin is 10 minutes per block.

Proof-of-stake (PoS), is used as a monitoring tool for the PoH processes, and each sequence of blocks that are produced through it.

Solana network’s transaction throughput scales proportionally with bandwidth and hardware, using GPU cores to parallelize execution and reduce verification times. That’s right, no “Layer 2 solutions” needed with Solana.

  • Solana – 65,000 transactions per second.
  • Bitcoin – 7 transactions per second.
  • Ethereum – 12 transactions per second.
  • Cardano – 257 transactions per second.
  • Polkadot – 1,000 transactions per second.
  • Harmony One – 2,000 transactions per second.

Solana is praised by blockchain advocates for their pledge to decentralization — anyone can participate to become a validator node, regardless of how much or how little SOL they own.

Data on Solana offloads from validators to a network of nodes known as archivers. These nodes can be lightweight, and they can be subject to a check to ensure that they are storing the right data.

(Image sourced from Solana’s Whitepaper)

Tower BFT, Gulf Stream, Sealevel & More

It’s hard to talk about Solana without at least mentioning the following key mechanisms:

Tower BFT – improves responsiveness by allowing validators to vote on the state of the ledger

Gulf Stream – allows the network to forward the transactions to validators before the current block of transactions is finished with its approval. This speeds up confirmation times, and reduces memory pressure on validators from the unprocessed transaction pool.

Sealevel – provides the network with the ability to execute smart contracts in a parallel fashion. You could think of it as a way of scaling resources horizontally across GPUs and SSDs.

Fun fact: Solana is the only chain to support parallel transaction execution in a single shard.

Pipelining – a method of efficiently optimizing transaction validation. Assigns a stream of input data that is processed via sequential steps, with separate hardware taking care of each step.

Turbine – a proprietary technology that takes important data and breaks it into smaller pieces, where the packets can be sent to nodes faster while also using a lot less bandwidth.

Cloudbreak – The network’s account database. 

Archivers – Hardware-based storage mechanisms that enable faster access to network information.

The SOL Token

SOL is the native token of Solana and is used for paying transaction fees on the Solana Network. Solana tokens are burned with each transaction, and Solana token holders can stake their SOL in order to become a validator node. They are rewarded in SOL for participating.

Both of these utilities reduce the circulating supply and help with positive price pressure.

The validators receive block rewards in SOL tokens, and any SOL token that is deducted from bad actors is added to the block rewards pool instead.

The Solana Core Team

Currently, the Solana core team includes many high level executives, blockchain experts, engineers and more. Here are a few from their roster.

  • Anatoly Yakovenko: Former Software Engineer at Dropbox and Mesosphere, Senior Engineer Manager at Qualcomm Boulder, co-founder of Alescere.
  • Greg Fitzgerald: Former Senior Software Engineer at Qualcomm Boulder, System Software Engineer at Alescere.
  • Raj Gokal: Venture investor at General Catalyst, Former Director of Product at Odama Health, Entrepreneur in Residence at Rock Health, CEO and co-founder of Sano.
  • Eric Williams: Former Chief Data Officer and co-founder at Motion, VP of Data Science & analytics at Odama Health, Researcher at CERN.

Investors and Partners

Solana received investment from a range of VCs and investment firms. Some of them include:

  1. 500 Accelerator
  2. Blockchange Ventures
  3. BlockTower Capital
  4. Distributed Global
  5. CoinList
  6. Passport Capital
  7. Multicoin Capital
  8. Neo Global Capital
  9. Foundation Capital

At the time of writing, there are 126 entities in their ecosystem. Some of them include:

Funding Rounds

Seed Sale$3,170,000 raised
Founding Sale$12,630,000 raised
Validator Sale$5,700,000 raised
Strategic Sale$2,290,000 raised
Public Auction$1,760,000 raised

Token Release & Distribution

Seed Sale16.23%
Founding Sale12.92%
Validator Sale5.18%
Strategic Sale1.88%
CoinList Auction Sale1.64%
Team9.86%
Solana Foundation10.46%
Community38.89%

Security Audits

In October, 2019 Solana completed an Architectural Security Review, conducted by Kedelski Security, the cybersecurity division of the Kudelski Group.

More info here.

Competition

Some of the biggest competitors to Solana include Ethereum, Cosmos, Polkadot and Cardano.

  • Ethereum is an open-source, blockchain-based, decentralized software platform used for its own cryptocurrency, ether.
  • Cosmos is an ever-expanding ecosystem of interoperable and sovereign blockchain apps and services, built for a decentralized future
  • Polkadot is a new generation blockchain protocol that simplifies cross-chain communication and interoperability by bringing multiple blockchains into one network.
  • Cardano is a proof-of-stake blockchain platform: the first to be founded on peer-reviewed research and developed through evidence-based methods

Wrapping Up

Solana is currently one of the most advanced blockchains on the market, and the team has done well to  build a network with the potential to surpass any of our FIAT-based payment processors, as well as other cryptocurrency blockchains in terms of speed and functionality.

Many projects like Audius and Maps.me are beginning to make the switch to Solana for its performance capabilities, and we will no doubt continue to see this trend grow over time.

One potential thing to consider is that Solana’s programming language is Rust (compared to Ethereum which uses Solidity), and Solana is not an EVM-compatible chain. However, this is by design.

While Ethereum may have the strongest network effect (for now), Solana is a blockchain designed for developers who want to future proof their projects for mainstream adoption. Speed, security, scalability and decentralization — Solana has it all, and no other network comes close.

As always, do your own research before buying into highly speculative assets such as cryptocurrencies.

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