What is Solana?
What is Solana?
Solana is taking its own approach to achieving scalability, focusing on achieving speeds that rival centralized systems while being censorship-resistant and decentralized in the long run. In this article, we dive into what Solana is and what the future holds for the blockchain.
For web3 to become a reality, blockchains need to cater for a wide range of activities. While fast transaction speeds are not a core requirement in every situation, it is for things such as payment networks, gaming and trading. There is a real need for blockchains that can achieve speeds similar to that of existing networks or to quote the founding team at Solana for “decentralized network of nodes to match the performance of a single node”. Solana was created with that understanding in mind and aims to achieve high transaction rates, extremely low fees while maintaining proper security, decentralization and censorship resistance in the long run.
What is Solana?
Solana is an open source, permissionless blockchain maintained by the Solana foundation. It runs on a proof of stake consensus model which has been improved upon by the proof of history concept that was pioneered by Anatoly Yakovenko, who’s one of the co-founders of Solana. The first wave of blockchain networks such as Bitcoin and Ethereum max out at around 15 transactions per second (TPS) in their current state. Proof of history is Anatoly’s solution to the blockchain trilemma, creating a highly scalable decentralized network that’s capable of rivaling the speed of traditional payment networks such as Visa.
Proof of History
Proof of history is based on the concept that having a reliable clock between computers in a network makes synchronization simple and results in high TPS. Validators being able to verify and agree on the order of blocks in a blockchain is the whole basis of a blockchain network but it’s also what makes it slower than alternative network solutions. Proof of history offers a way for validators to keep time in a trustless system. It creates a historical record of events with their timestamps, each validator is able maintain and align their own clock, which helps them to agree on the sequence of events independently. Validators are able to rely on the ledger itself for information and decide if a transaction is valid or not independently. This allows the network to make decisions without the need for validators communication with one another. Only one validator is expected to produce ledger entries at a given time and the leader is rotated amongst the validators to minimize influence of a single validator.
Staking and running a node
The current APY for staking SOL tokens on the network is ~6.8%. Holders can delegate their tokens to any one of the 1,640 validators in the network. Staked tokens will be locked in for the duration of the current epoch, which typically last for 2-3 days. The progress of the current epoch and list of validators can be tracked on Solana Beach.
There is no strict minimum SOL requirement to run a validator but there is a relatively high hardware requirement. To find out more about the hardware requirements to run a node, check out Solana’s official documentation about the topic.
Benefits of Solana?
High speed and low fees
High speed and low fees are perhaps what Solana is most known for. With the ability to hit highs of 65,000 TPS and a theoretical limit of 710,000 TPS in the future, Solana looks to achieve parity with centralized systems.
Currently the chain processes roughly 1,900% of the number of transactions Ethereum does while users only pay a fraction of the fees. At its peak, the network processed over 4,800% of the transactions on Ethereum.