What is Solana? In-depth Analysis of Solana (SOL)

I. What is Solana?

Solana is a blockchain platform for hosting decentralized, scalable apps. It was founded in 2017 as an open-source initiative by the Solana Foundation in Geneva, with the blockchain constructed by Solana Labs in San Francisco.

Solana is quicker in terms of transaction processing capacity and offers significantly cheaper transaction costs than other blockchains such as Ethereum. The cryptocurrency that runs on the Solana blockchain, also known as Solana (SOLUSD) and trading under the ticker symbol SOL, increased nearly 12,000% in 2021 and reached a market capitalization of more than $66 billion at one point, making it the fifth-largest cryptocurrency by this metric at the time.

II. History of Solana

Anatoly Yakovenko presented a whitepaper in November 2017 detailing Proof of History, a mechanism for tracking time across computers that do not trust one another. Anatoly recognized from his past experience creating distributed systems at Qualcomm, Mesosphere, and Dropbox that a reliable clock simplifies network synchronization. When synchronization is straightforward, the resultant network can be lightning fast, limited only by network bandwidth.

Anatoly observed as blockchain systems without clocks, such as Bitcoin and Ethereum, struggled to expand past 15 transactions per second globally, despite the fact that centralized payment systems like Visa required peaks of 65,000 TPS. Without a clock, it was evident they’d never become the worldwide payment system or global supercomputer most had hoped for. Anatoly thought he had the key to integrating 40 years of distributed systems research into the realm of blockchain when he solved the difficulty of getting machines that don’t trust each other to agree on a time. The resultant cluster would be 10,000 times quicker straight out of the start, not simply 10 times faster, 100 times faster, or 1,000 times faster.

Anatoly’s codebase originated in a private codebase and was written in the C programming language. Greg Fitzgerald, a former colleague of Anatoly’s at the semiconductor giant Qualcomm Incorporated, pushed him to reimplement the project in the Rust programming language. Greg had contributed to the LLVM compiler infrastructure, which is used by both the Clang C/C++ compiler and the Rust compiler. Greg asserted that the language’s safety guarantees would boost software productivity and that the lack of a garbage collector would allow programs to function as well as C-coded ones. Anatoly gave it a shot and just two weeks later, had migrated his entire codebase to Rust – Sold. With plans to weave all the world’s transactions together on a single, scalable blockchain, Anatoly called the project Loom.

Greg began developing the first open-source version of Anatoly’s whitepaper on February 13th, 2018. In the Loom protocol organization, the project was uploaded on GitHub under the name Silk. Greg released his initial release on February 28th, proving that 10,000 signed transactions could be validated and processed in slightly over half a second. Soon after, another former Qualcomm employee, Stephen Akridge, demonstrated that shifting signature verification to graphics processors may significantly enhance throughput. Anatoly recruited Greg, Stephen, and three other people to co-found Loom.

Around the same time, the Ethereum-based project Loom Network emerged, leaving many people perplexed as to whether they were the same project. The Loom team made the decision to rename. They adopted the name Solana as a tribute to Solana Seaside, a little beach community north of San Diego where Anatoly, Greg, and Stephen resided and surfed for three years while working at Qualcomm. On March 28th, the Solana GitHub organization was established, and Greg’s prototype Silk was renamed, Solana.

The team scaled up the system to run on cloud-based networks in June 2018 and launched a 50-node, permissioned, public testnet on July 19th, regularly sustaining bursts of 250,000 transactions per second. In a subsequent version, named v0.10 Pillbox, in December, the team published a permissioned testnet operating 150 nodes on a gigabit network and conducted soak tests processing an average of 200 thousand transactions per second with bursts exceeding 500 thousand. The project was also expanded to include on-chain applications written in C that execute simultaneously in a safe execution environment known as BPF.

III. Striking Features of Solana (SOL)

Solana can power a number of applications with a range of features:

• Currency: With a cryptocurrency wallet, you can use Solana to send or receive the coin or transfer it in exchange for goods and services.
• Smart contracts: Smart contracts are apps that automatically execute the terms of the contract when its conditions have been fulfilled.
• Non-fungible tokens (NFTs): Often associated with digital art, NFTs can be powered with Solana, allowing artists and others to sell them to consumers.
• Decentralized finance: With Solana, you can create and use permissionless payments, ones that can avoid centralized or government control.
• Digital apps: Besides its other functions, Solana supports the development of a range of other apps, including games, investing, social media, and more.
• Proof of history approach: In addition to a proof of stake approach to validate transactions, Solana timestamps them, eliminating the ability to re-order transactions to a validator’s advantage. This helps make Solana a “censorship-resistant” network.

Consider Solana as a token that can be used to power numerous apps rather than a currency that transmits monetary value from one person to another.

IV. Core Technology of Solana (SOL) 

Solana provides a total of eight system-exclusive technologies. The advancements concentrate on how information is sent throughout a network, with the goal of making Solana as quick as data transmission. Let’s take a look at each of these significant advances one by one.

1. Proof of History

One challenge of distributed networks is finding agreement on the time and sequence in which events occurred, as nodes within the network cannot simply trust an external source of time or any timestamp that appears in a message. Solana requires all validators to constantly solve SHA256-based Verifiable Delay Functions (VDF). A VDF requires a specific number of sequential steps to evaluate, yet produces a unique output that can be efficiently and publicly verified. The VDFs can only be solved by a single CPU core applying a particular set of sequential steps. The team notes that since for a SHA256 hash function, parallel processing is impossible without a brute force attack using 2¹²⁸ cores, it is not difficult to define exactly how long it takes to apply those steps. Solana’s specific implementation uses a sequential hash that runs over itself continuously with the previous output used as the next input. With the computational output of the current function “X”, a validator will be able to calculate the output for the next function “Y”. Since the computation is universal, meaning all validators need to solve the same function “X”, and will be able to derive the output for the next function “Y” in around the same time, Solana is able to create a synchronized “clock” across the whole network.

The team also believes that the use of Application Specific Integrated Circuits (“ASICs”) would not pose a significant threat to the current PoH design, since an ASIC device would only be within 30% faster than general-purpose equipment. An attack from ASIC devices, per the Solana team, can be quickly addressed.

2. Tower Byzantine Fault Tolerance (BFT) Consensus Mechanism

Tower BFT leverages Solana’s PoH as a clock before consensus to reduce communication overhead and latency. Each time a node on the network votes on a particular fork, voting is restricted to a fixed period of hashes, which is called a slot. The current network setting has around 400ms for one slot. Every 400ms, the network has a potential rollback point, but every subsequent vote doubles the amount of time that the network would have to stall before it can unroll that vote. For instance, each validator has voted 32 times in the last 12 seconds. The vote 12 seconds ago now will have a timeout of 2³² slots or roughly 54 years. Effectively, this vote will never be rolled back by the network. Whereas the most recent vote has a timeout of 2 slots or about 800ms. As new blocks are added to the ledger, old blocks are increasingly likely to be confirmed because the number of slots old votes are committed to doubles every slot or every 400ms. Tower BTF offers finality as Once ⅔ of validators have voted on some order of events, it will be canonicalized and cannot be rolled back. The Solana mainnet is planned to operate in delegated-Proof-of-Stake (dPoS), in which token holders can participate in the block production process and earn rewards by either stake token and becoming a validator themselves, or delegating their tokens to validators they trust.

3. Turbine

Often times in a distributed system, increasing the node count will increase the amount of time necessary to propagate all the data to all nodes. Turbine is a block propagation protocol aimed to solve this issue. With Turbine, if a node were to propagate a very large message to the 1,000 peers, it would not transmit the information 1,000 times itself. Instead, the message would be broken down into very small packets, transmitting each packet to a different validator. In turn, each validator retransmits the packet to a group of peers that are called a neighborhood. Each neighborhood is responsible for transmitting a portion of its data to each neighborhood next to it. If each neighborhood is comprised of 200 nodes, a 3-level network, starting with a single leader at the root, can reach 40,000 validators in 2 hops.

To handle adversarial nodes who might choose not to rebroadcast data, the leader generates Reed-Solomon erasure codes. Erasure codes allow each validator to reconstruct the entire block without receiving all the packets. If the leader transmits 33% of the block’s packets as erasure codes, then the network can drop any 33% of the packets without losing the block. Leaders can also adjust this number dynamically based on network conditions.

4. Gulf Stream

For each block production process, the upcoming network leaders will also be determined according to their stakes. Clients and validators can forward transactions to the expected leader ahead of time. This allows validators to execute transactions ahead of time, reduce confirmation times, switch leaders faster, and reduce the memory pressure on validators from the unprocessed transaction pool.

5. Sealevel

Sealevel is a hyper-parallelized transaction processing engine designed to scale horizontally across GPUs and SSDs. Note that all other blockchains are single-threaded computers. Solana is the only chain to support parallel transaction execution (not just signature verification) in a single shard. The solution to this problem borrows heavily from an operating system driver technique called scatter-gather. Transactions specify up front what state they will read and write while executing. Sealevel is able to find all the non-overlapping transactions occurring in a block and execute them in parallel — what is called parallel execution — while optimizing how reads and writes to the state are scheduled across an array of RAID 0 SSDs.Although Sealevel itself is a VM that schedules transactions, Sealevel doesn’t actually execute transactions in the VM. Instead, Sealevel hands off transactions to be executed on hardware natively using an industry-proven bytecode called the Berkeley Packet Filter (BPF), which is designed for high-performance packet filters. This bytecode has been optimized since the early 90s and has been deployed in production in millions of switches worldwide to handle 60 million packets per second on a 40-gigabit network in a single switch.

6. Pipeline

The process of transaction validation on the Solana network makes extensive use of an optimization common in CPU design called pipelining. Pipelining is an appropriate process when there is a stream of input data that needs to be processed by a sequence of steps and there’s different hardware responsible for each. This mechanism ensures that all parts of the hardware are efficiently at work all the time.

On the Solana network, the Transaction Processing Unit (TPU) progresses through data fetching at the kernel level, signature verification at the GPU level, banking at the CPU level, and writing at the kernel space. By the time the TPU starts to send blocks out to the validators, it’s already fetched in the next set of packets, verified their signatures, and begun crediting tokens.

7. Cloudbreak

In a distributed system, memory is used to keep track of accounts and can struggle to maintain performance due to a lack of memory size and limited access speeds. Therefore Cloudbreak was designed to optimize for concurrent reads and writes spread across a RAID 0 configuration of SSDs. Each additional disk adds storage capacity available to on-chain programs, while also increasing the number of concurrent reads and writes programs can perform when executing.

8. Archivers

On Solana, data storage is offloaded from validators to a network of nodes called Archivers. Archivers do not participate in consensus. The history of the state is broken into many pieces and erasure coding. Archivers store small parts of the state. Every so often, the network will ask the Archivers to prove that they’re storing the data they are supposed to.

V. What is SOL?

1. Detailed Information about SOL

SOL is Solana’s cryptocurrency. It is Solana’s native and utility coin that allows for value transfer as well as blockchain security via staking. SOL was established in March 2020 with the goal of becoming one of the top ten cryptocurrencies hitting the market in terms of total market value.

The SOL token operating model is comparable to the Ethereum network. Despite the fact that they work similarly, Solana token holders must stake the token in order for transactions to be validated via the PoS consensus process. In addition, the Solana coin is used to gain awards and pay transaction costs, with SOL allowing users to participate in governance.

2. SOL Allocation

The SOL coin has an initial supply of 500,000,000 SOL and it is distributed to:

• Community Activities: 38.89%
• Seed Sale: 16.23%
• Founding Sale: 12.92%
• Developers: 12.79%
• Solana Foundation: 10.46%
• Strategic & Validator Sale: 7.06%
• Sale on Coinlist: 1.64%

3. SOL Token Metrics

• Ticker: SOL
• Blockchain: Solana
• Consensus: Proof of History (PoH)
• Consensus Mechanism: Tower BFT
• Token Type: Utility Token
• Token Standard: SPL
• Block time: 400 ms
• Avg Transaction Speed: 50,000-70,000 TPS
• Smallest unit: 1 Lamport = 10^-9 SOL
• Max Supply: 1,000,000,000 SOL
• Circulating Supply: 301,230,623 SOL

4. Use Cases of SOL

The SOL currency, like other blockchain networks, offers the following functionalities:

• Staking: SOL may be put into Solana nodes to participate in the validation process, after which SOL awards are awarded to stakers and node operators.
• Transaction fee: SOL is the fee used to pay for every transaction or smart contract run on the Solana blockchain. This implies that interacting with the blockchain or protocols built on Solana incurs a price. On Solana, the average transaction charge is around $0.00025.
• Governance: The Solana Foundation intends to use SOL as the Solana blockchain’s governance token. However, this utility has yet to be launched.

VI. How to earn & own SOL?

Buying Solana is fairly straightforward since there are many Crypto Exchanges that list it. Here are a few of the most popular options:

• CEXs: Binance, Coinbase, FTX, etc.
• DEXs: Saros, Saber, Raydium, Orca.

VII. Which Crypto Wallets are suitable for SOL?

Here is the list of popular and best Solana (SOL) wallets:

1. Phantom
2. Solflare
3. Ledger
4. Sollet
5. Exodus
6. Coinbase Wallet
7. Math Wallet

VIII. SOL Recent Developments

1. Solana Ongoing Developments 

Based on analytics charts, Solana’s development activities roughly quadrupled between December 1st, 2021, and March 17th, 2022. Basically, there were 1588 development operations in Solana at the beginning of December, and there are now roughly 3081.

The rise in Solana development activity is mostly due to their eagerly anticipated mainnet debut. According to many reports, Solana intends to officially launch its mainnet in 2022. The only project left on the roadmap is the mainnet release.

Solana stated in March of last year that they will keep their project in Beta for an additional year to ensure stability. Because their announcement was made in March, the year will expire in March. As a result, Solana investors anticipate the mainnet’s introduction in March.

There are, however, other active activities, particularly Github projects. There are also suggestions for on-chain governance. The idea for on-chain governance was created to allow Sol investors to participate in project development decision-making. Solana intends to establish a trading department and an investment arm. The heart of the Solana project remains in development.

2. Solana and Decentralized Applications 

Solana raised over $314 million in a private token sale last year. The funds will be used to aid in the development of the project as well as to assist Defi. All of Solana’s developments aim to achieve a single goal: support for the Defi world.

As a result, Solana Labs Co-Founder and CEO Anatoly Yakovenko stated that their “next phase is enrolling a billion people,” and that the Solana chain is capable of scaling and supporting massive sizes. The growth of Defi within Solana will undoubtedly assist attract a large number of users in the near future.

IX. Teams, Funds & Partners of Solana (SOL)

1. Team

2. Investment Funds

3. Partners

X. Where is Solana (SOL) information to be updated?

Currently, Crypto users can fully consult, research, and analyze information about Solana (SOL) through famous media newspapers such as Nasdaq, Bloomberg, Forbes, AP News, Yahoo!Finance, CoinTelegraph, Coindesk, Kraken…

These media are constantly updated with useful information, new activities, outstanding Solana events, and related topics. Accordingly, Meta Lion Ventures continuously updates the topic of outstanding projects in Blockchain and hot events organized between Meta Lion & partners.

XI. FAQs about Solana (SOL)

• What distinguishes Solana?

Solana’s main selling points are its quick and low-cost transactions. It can purportedly process 65,000 transactions per second and has an average transaction cost of $0.00025.

Solana is able to do so because it validates transactions using proof of history, a proprietary technique. Most blockchains use either a proof-of-work or proof-of-stake consensus mechanism, with proof-of-stake being the more efficient option. Solana uses a hybrid protocol that combines proof of stake with proof of history for even faster processing.

• Who are Solana’s rivals?

Solana is viewed as a possible rival by most permissionless blockchains since it is a feasible alternative to previous smart contracts blockchains. Solana is sometimes compared to Ethereum, the first blockchain-based server platform. The platform’s key benefit is that it can handle up to 50,000 TPS, whereas Ethereum’s pace is between 15 and 45 TPS.

Solana’s rivals include SKALE Labs, 1Token, ARK, and Cindx in terms of size and development history. However, the project’s continuous innovation and design distinguish it from all other blockchains.

• How to buy SOL?

Because of its quick commercial development and expansion, Solana attracts consumers from all around the world. Every day, more crypto exchanges list SOL for trade against cash or other cryptocurrencies. SOL may be purchased on Binance, Bitfinex, FTX, Coinbase, and other exchanges. SOL is also useful for staking.

• Is Solana a good investment?

Solana certainly has promise. It has positioned itself as a quicker, cheaper alternative to Ethereum because of its speed and low expenses. It is constructing a big ecosystem of various projects and may become a popular solution for merchants using Solana Pay.

Despite significant growth, Solana’s market worth remains a fraction of Ethereum’s. It’s easy to imagine Solana growing in popularity as a cryptocurrency investment.

It’s also an advantage that you can stake Solana. You’ll receive more SOL tokens dependent on how much you stake, so if you already believe in the idea, being able to stake is an added bonus.

Nonetheless, Solana is a high-risk investment. Cryptocurrencies are very volatile, and many seemingly promising ventures fail to materialize. Only invest in Solana if you’re willing to take the risk, and don’t spend more than you can afford to lose. Also, keep in mind that long-term adjustments will have a considerably greater impact on your portfolio than weekly fluctuations.

Conclusion

As a relatively recent project, Solana has delivered on the promises of speed and scalability. Its token price has also performed well, piquing investors’ curiosity. Nonetheless, network uptake and usage are still in their early stages.

Solana addresses many of the conventional concerns that previous blockchain technologies faced. Solana demonstrates a novel structure for transaction verification as well as a more efficient consensus mechanism. The platform will undoubtedly compete with Bitcoin and Ethereum. Solana has made rapid progress in the crypto business in just ten years. The platform will undoubtedly be something to keep an eye on as it evolves.