Solana (SOL) has rapidly surged into the top blockchain projects, offering the market a truly scalable, decentralized solution with minimal fees and impressive transaction speeds. At a time when Ethereum struggles with congestion and high fees, and many new networks are trying to find their place in the Web3 ecosystem, Solana has firmly established itself among the leaders.
Since its launch in 2020, Solana (SOL) has pursued an ambitious goal — to become a blockchain capable of simultaneously meeting the needs of millions of users and developers without sacrificing speed or decentralization. This challenge — the “holy trinity” of blockchain technology (speed, security, scalability) — has long been considered nearly impossible. However, Solana (SOL) offers a unique approach, using original technical innovations and next-generation architecture.
At the peak of the DeFi and NFT boom, Solana (SOL) not only held its ground among competitors but also attracted numerous teams, investors, and enthusiasts. Its infrastructure rapidly evolved, with dozens of protocols, applications, and tools emerging, enabling Solana to become one of the key platforms in the Web3 world.
The Solana (SOL) project was launched in 2020 by engineer Anatoly Yakovenko — a specialist with extensive experience in high-performance systems. Before creating Solana, he worked at companies like Qualcomm, where he focused on optimizing operating systems and network protocols, and Dropbox, where he also contributed to the development of scalable solutions.
Yakovenko’s idea was to use precise time synchronization as a key element of a scalable and high-performance blockchain. He observed that modern telecommunications protocols handle massive volumes of data thanks to accurate time coordination. This insight inspired him to create a new concept — Proof of History (PoH).
Creation History of Solana Cryptocurrency
Unlike traditional consensus mechanisms such as Proof of Work or Proof of Stake, PoH (Proof of History) allows the sequence of events to be recorded in advance using a built-in timestamp, which significantly speeds up transaction processing and reduces network load. This approach proved revolutionary — it enabled Solana (SOL) to handle thousands of transactions per second with low fees.
Soon, other engineers joined Yakovenko, including Greg Fitzgerald and Stephen Akridge, who helped turn the idea into a full-fledged project. This led to the formation of Solana Labs — the team behind the network’s development. Since its launch, the project has attracted the attention of major investors and developers worldwide, becoming one of the fastest and most promising blockchain platforms in the industry.
How Solana Works: Proof of History and Other Innovations
Solana is a high-performance blockchain network built from the ground up to overcome the key limitations of existing networks — such as slow transaction speeds and high fees. This was achieved through a combination of several technical innovations, the most important of which is Proof of History (PoH) — a unique algorithm introduced by Anatoly Yakovenko.
Proof of History (PoH)
Proof of History is a timestamping mechanism that allows the creation of encrypted and verifiable timestamps for every event in the network. This means that each participant can verify whether a particular event occurred before or after another — without the need for lengthy validation. Thanks to PoH, Solana (SOL) eliminates the need for global time synchronization between nodes. All nodes can trust the chronological order of events without directly communicating with each other. This drastically reduces latency and enables block generation times as fast as 400 milliseconds, making Solana one of the fastest blockchain networks in the world.
Proof of Stake (PoS)
To ensure security and decentralization, Solana also uses Proof of Stake. In this model, validators are selected based on the amount of SOL tokens they and other users delegate into staking. The more tokens are staked, the higher the chance of being chosen to validate a block. This system makes attacks on the network costly and encourages honest behavior.
Solana uses Proof of Stake
Turbine
Turbine is a data partitioning protocol (SOL) that breaks data into small packets, similar to how BitTorrent works. The data is split into parts and distributed across the network through hierarchical levels. This approach helps avoid network congestion and ensures fast, scalable data transmission between nodes, especially with a large number of participants.
Sealevel
Unlike most blockchains where transactions are processed sequentially, Solana (SOL) uses Sealevel — a parallel execution mechanism for smart contracts. This means that thousands of contracts can run simultaneously if they do not affect the same resources. This approach significantly increases the network’s throughput and reduces transaction processing time.
Gulf Stream
Gulf Stream is an innovative mempool (unconfirmed transaction queue) management system. It enables validators to receive preliminary data about transactions and preemptively form future blocks. This reduces the time between blocks and increases the overall efficiency of the network.
Pipeline
Pipeline is a system for processing data at various stages of a transaction’s lifecycle: from reception and signing to validation and writing to the block. Each stage is handled on specialized hardware threads, resembling modern processors. This allows Solana to process up to 65,000 transactions per second without compromising quality or stability. By combining these technologies, Solana offers developers and users a scalable, fast, and cost-effective platform for launching decentralized applications, DeFi projects, and NFT marketplaces.
Solana Ecosystem (SOL)
The Solana (SOL) ecosystem is rapidly growing and already includes hundreds of active applications spanning finance, digital art, gaming, and developer tools. With its high transaction processing speed and low fees, Solana has become an attractive platform for a wide variety of projects.
DeFi Projects
Solana (SOL) has established itself as a reliable foundation for decentralized finance (DeFi), providing developers with infrastructure capable of handling large numbers of transactions almost instantly.
Serum — A decentralized exchange with a full order book, built with the involvement of FTX. Despite the collapse of FTX, Serum has left a significant mark on DeFi infrastructure and proved that DEX on Solana can operate with high performance.
Raydium and Orca — Automated Market Makers (AMMs) that offer users an easy-to-use interface, fast trading, and deep liquidity. Orca also focuses on accessibility for newcomers with a user-friendly UX.
Mango Markets — A platform that combines derivatives, spot trading, lending, and margin trading into a single interface, providing users with access to advanced financial tools without intermediaries.
Due to its low cost and fast transaction speed, Solana (SOL) has become one of the leading blockchain platforms for NFTs and metaverses.
Magic Eden — The largest NFT marketplace on the Solana network, with an active community and a wide range of collections. The platform supports primary and secondary sales, as well as drops.
Solanart and Exchange.Art — Platforms specializing in digital art. While Solanart focuses on collectible projects, Exchange.Art is aimed at individual artists and the art community.
Aurory and Star Atlas — Next-generation gaming projects. Aurory is a role-playing game with turn-based battles and NFT characters, while Star Atlas is a large-scale metaverse with space battles, economy, and governance via DAO.
Solana (SOL) is actively investing in the development of Web3 infrastructure, focusing on accessibility and ease of development.
Official SDKs and APIs are provided in popular programming languages such as Rust, TypeScript, C, and others. Developers can create applications interacting with the Solana blockchain using ready-made libraries and documentation.
Frameworks for smart contracts, including Anchor, a tool that simplifies the development and testing of contracts in Rust, are available.
The Solana Foundation regularly organizes hackathons where participants can present their ideas, receive mentor support, and win funding. Grants and accelerator programs are also available to stimulate the launch of new projects and the growth of the ecosystem.
Solana blockchain
SOL Token: Economics and Use
The SOL token is the native cryptocurrency of the Solana blockchain network and performs key functions within the ecosystem:
Transaction Fees: SOL is used to pay for transaction fees and interactions with smart contracts.
Staking: SOL holders can participate in the transaction confirmation process by staking on validators and earning rewards for contributing to the security of the network.
Governance: SOL provides voting rights in the decision-making process regarding network improvements and development.
Participation in DeFi, NFT purchases, and ecosystem projects: SOL is actively used in decentralized finance applications, on platforms for trading non-fungible tokens (NFTs), and in other projects built on the Solana blockchain.
According to data from The Block, there are currently around 517.3 million SOL tokens in circulation, out of a total supply of 599.2 million tokens. Thus, about 86% of the maximum supply has already been issued.
Advantages of Solana
Reserved Tokens Distribution:
Developer Fund: A portion of the tokens is allocated to incentivize and support developers who create applications and services on the Solana platform.
Validators: Tokens are designated to reward network participants who ensure its security and stability.
Future Initiatives: Funds are reserved to finance new projects and initiatives aimed at developing the Solana ecosystem.
Thus, SOL not only serves as a means of exchange and investment but also actively participates in the governance and development of the network, ensuring its stability and innovative progress.
Advantages of Solana (SOL):
Speed: Up to 65,000 TPS with low latency.
Fees: Less than $0.01 per transaction—one of the most cost-effective solutions on the market.
Parallel Processing: The Sealevel mechanism allows smart contracts to run in parallel, unlike Ethereum, where they run sequentially.
Wide Ecosystem: NFT, DeFi, GameFi, Web3—actively developing in all areas.
Prospects of Solana
Prospects and Forecast
In 2024–2025, Solana (SOL) continues to move confidently towards mass adoption and technological advancement. The project team focuses not only on technical improvements but also on expanding its user base through close integration with the real world and Web2 services. The main development directions include:
1. Mass Adoption in Web3
Solana aims to go beyond the world of crypto enthusiasts and become part of everyday digital life. This means:
Simplifying access for end-users through integration with mobile wallets, payment services, and Web2 applications;
Developing infrastructure for Web3 games, NFTs, social networks, and content platforms, where blockchain interactions will be “invisible” to the user;
Supporting flagship Web3 platforms and launching new partnerships with large IT companies.
2. Solana Mobile Stack and the Saga Smartphone
Solana is actively developing the mobile devices direction:
Solana Mobile Stack (SMS): An open ecosystem of tools and APIs for creating mobile Web3 applications. It includes secure key storage, decentralized identity, and password-free authentication.
Saga Smartphone: An attempt to create a next-generation crypto device with deep Web3 integration. While the initial launch was subdued, further iterations could change the market for mobile crypto devices, especially considering the growing role of smartphones in users’ lives.
Solana Mobile Stack
3. Network Stability Optimization
Performance is one of Solana’s (SOL) main advantages, but it has also been a source of criticism. In the past, the network has faced disruptions due to overloads and vulnerabilities. In the coming years, developers are focusing on:
Increasing fault tolerance;
Implementing self-healing mechanisms;
Improving validator performance and network synchronization;
Transitioning to a more flexible architecture with horizontal scalability capabilities.
4. Developer Support
Solana is focusing on expanding its community through:
New grant programs and accelerators from the Solana Foundation and partner funds;
Hosting international hackathons, workshops, and educational initiatives;
Enhancing development tools: Anchor, SDKs, documentation, and testing environments;
Developing local communities, DevRel initiatives, and Ambassador programs.
Frequently Asked Questions
1. How does Solana work on security?
Smart contract audits by third-party companies (Certik, Halborn, etc.).
Development of bug bounty programs.
Segmentation of validator roles into classes (e.g., “light clients”, “archivers”) to reduce load and improve fault tolerance.
Implementation of the QUIC protocol instead of TCP for better network traffic handling.
2. Who are Solana’s competitors and what is its position in the market?
Solana remains one of the brightest players among blockchain platforms, but it faces strong competition depending on the specific use cases and architecture. Below are key competitors and their positions in the cryptocurrency market:
Ethereum
Advantages: Ethereum is the leader in smart contracts and decentralized applications (DApps). It has the largest ecosystem and is actively developing Ethereum 2.0 with a transition to Proof of Stake (PoS), which should significantly reduce fees and increase speed.
Competition: Despite technological improvements, Ethereum remains slow and expensive, giving Solana an advantage in terms of performance and affordability for users and developers.
Avalanche, Near, Aptos, and Sui
Advantages: These Layer 1 (L1) solutions focus on high speed and low fees, making them direct competitors to Solana.
Avalanche: A very fast network with a unique Avalanche consensus, supporting interoperability and decentralized finance (DeFi).
Near Protocol: Developer-friendly with one of the easiest and fastest architectures for building DApps.
Aptos and Sui: New projects based on the Move programming language for smart contracts. These blockchains promise high scalability and performance, making them strong competitors to Solana.
Polkadot and Cosmos
Advantages: Polkadot and Cosmos are multi-chain ecosystems that focus on interoperability between different blockchains. Their goal is to improve interoperability and create a unified space for exchanging data and assets across blockchains.
Competition: Unlike Solana, which focuses on the scalability of a single blockchain, Polkadot and Cosmos offer a more flexible architecture, enabling the creation of connectable parachains.
Binance Smart Chain (BNB Chain)
Advantages: Binance Smart Chain (BSC) is supported by the largest cryptocurrency exchange, Binance, and is known for its low cost and high transaction speed. Despite its centralization, BSC has attracted a large user base and developers.
Competition: Solana and BSC compete for the same decentralized applications (DApps), but BSC is more trader-focused, while Solana targets long-term solutions for a wide range of applications.
Cardano (ADA)
Advantages: Cardano focuses on security and decentralization, using formal code verification and a scientific approach to blockchain development. This provides the platform with a high level of security and stability.
Competition: Cardano develops its ecosystem more slowly than Solana, but its emphasis on security and scientific methodology appeals to corporate clients.
Fantom
Advantages: Fantom uses a Directed Acyclic Graph (DAG) instead of a traditional blockchain, enabling high transaction speeds with low fees. This makes it competitive in DeFi and smart contracts.
Competition: Fantom and Solana share similar goals of high performance and accessibility for users, but Fantom has a smaller ecosystem and less support.
Hedera Hashgraph (HBAR)
Advantages: Hedera uses a non-blockchain architecture, based on Hashgraph (a Directed Acyclic Graph), to achieve high performance, scalability, and low fees.
Competition: This alternative technological approach ensures very fast transactions with low costs. However, unlike Solana, Hedera remains partially centralized.
Tezos
Advantages: Tezos uses a “self-updating” mechanism and focuses on creating a flexible and robust blockchain, particularly for corporate use.
Competition: Despite its smaller ecosystem, Tezos offers good tools for corporate clients and is developing innovative solutions, but Solana wins with a broader ecosystem and applications.
Bitcoin
Advantages: Although Bitcoin is not a direct competitor to Solana in the area of smart contracts and DApps, it remains the largest cryptocurrency and a major store of value.
Competition: Layer 2 solutions (e.g., Lightning Network) are used for DeFi and other applications on Bitcoin, creating indirect competition for Solana, especially in terms of scalability and transaction speed.
Summary: Solana holds a strong position among cryptocurrencies and high-performance blockchains, but its competitors are actively developing in various areas:
Ethereum remains the leader in smart contracts and DeFi.
Avalanche, Aptos, Near, and other L1 solutions compete with Solana on speed and low fees.
Polkadot and Cosmos offer unique solutions for multi-chain ecosystems.
Bitcoin maintains its leadership role as digital gold, but Layer 2 solutions create competition in scalability.
Solana remains in the top 10 cryptocurrencies by market capitalization, with its ecosystem actively developing and the community showing increasing interest from both developers and users.
3. What about Solana’s security and decentralization?
In terms of decentralization, Solana has often been criticized for several reasons:
It requires powerful hardware to run a validator (unlike Ethereum, where a node can be launched with consumer-grade hardware).
There is a relatively small number of large validators controlling a significant portion of the network.
The network has been subject to coordinated attacks and outages, raising concerns about its resilience to centralized vulnerabilities.
Solana validators must process a massive amount of data (up to 100 Gbps), which limits decentralization, as not everyone can afford such powerful equipment. The Solana network has experienced several outages, especially in 2021–2022:
The network stopped due to flood attacks (transaction flooding and NFT spam).
Restarts required manual intervention by validators, which raised questions about the decentralization of governance.
The team is actively working to improve stability:
Transaction limits have been introduced to control the number of transactions per block.
The queue prioritization mechanism has been enhanced.
The leadership protocol has been updated to make it more resilient.
Validators on Solana must handle a huge data throughput (up to 100 Gbps), which limits decentralization as not everyone can afford such equipment. Solana’s network has experienced several “downtimes,” particularly in 2021-2022, including:
Network halts due to flood attacks (transaction spam and NFT flooding).
Manual intervention from validators was required to restart the network, raising concerns about decentralization of governance.
The team is actively working on improving stability:
Restrictions on the number of transactions per block have been introduced.
The prioritization mechanism for transaction queues has been improved.
The leadership protocol has been updated to make it more resilient.
Conclusion
Solana (SOL) is an example of how technological innovations can drastically change the game in the cryptocurrency market. Despite certain challenges, the network demonstrates strong momentum, scales effectively, and becomes increasingly user- and developer-friendly. If you’re interested in cryptocurrencies, Web3, or investing in promising technologies, Solana is definitely worth keeping an eye on.
Crypto market expert. A practicing investor in financial and cryptocurrency markets with over 9 years of experience.
Specializations: cryptocurrencies, DeFi tools, crypto exchanges, and exchangers.
I participate in token sales, earn through holding, staking, and DeFi tools. I actively trade on crypto exchanges, test various cryptocurrency services, and share my knowledge with the website's readers. Always up to date with current events and well-versed in the latest trends in the cryptocurrency industry.
