Thanks to its hybrid Delegated Proof-of-Stake and (DPoS) and Proof-of-History (PoH) consensus mechanism, Solana is one of the fastest, cheapest, and most scalable blockchains on the market today. Just like ETH, a cryptocurrency with the ticker SOL is the lifeblood of the Solana blockchain. The ledger keeps a record of transactions that are denominated in it or in the SOL-based tokens, fungible and NFTs alike. At its core, the value proposition of the Solana blockchain is not very different from Ethereum’s. It is a public base-layer blockchain protocol, also referred to as layer one (L1), best suited for decentralized computing and creating decentralized applications (dApps).
Real-World Use Cases
At the time of writing, Solana’s total value locked (TVL) stands at approximately $6.28 billion, with a total market cap of around $82.77 billion. Solana is in the top 10 blockchains when it comes to key performance indicators and overall user base. Here we will compare it with three of the popular blockchains in the cryptocurrency market. In this article, we will take a deeper look into the Solana cryptocurrency, its key features, how it works, its price history, and also how it compares to other blockchain networks. All examples listed in this article are for informational purposes only.
Solana’s Key Technologies
Solana Foundation is a non-profit working on promoting and supporting the project, based in Switzerland. SOL was launched in March 2020 amid the beta testnet release and has strived to become one of the leading cryptocurrencies. Over 231 companies are currently included in Solana’s ecosystem, ranging from different industries. Some to mention are AMMs (Automated Market Makers – Serum), oracles (ChainLink, Gravity, Switchboard, Band Protocol, and Nozomi), stablecoin projects, Wallets, and exchanges.
How Solana Works: Key Innovations
As of mid-2025, Solana had 1,100+ validators—and staking remains a key pillar of DeFi participation. To become one, a user must stake Solana’s native token—SOL—as collateral. The more SOL staked (either directly or through delegators), the higher the chance of being chosen to validate blocks. Solana outperforms Ethereum in terms of transaction speed and cost but lags behind in overall maturity and ecosystem size. Ethereum remains the dominant smart-contract platform, although Solana is rapidly growing in market share, functionality and community support. Solana’s low fees and fast transaction processing make it well-suited for NFT minting and trading.
- Its strength also comes from real-world integration—like Solana Pay and Saga phones—making crypto apps feel instant, mobile-ready, and practical to use every day.
- This process works by generating a historical record of transactions network nodes can easily verify, reducing the need for constant validator coordination.
- This mechanism is Solana’s underlying consensus that leverages the PoH cryptographic clock.
- Solana is a high-performance blockchain platform with unique features that offer advantages in speed, scalability, and low transaction fees.
- Solana distinguishes itself with its unique Proof of History (PoH) consensus mechanism.
This can take the form of hardware (a physical device), a browser extension, or a desktop/mobile application. The wallet will generate a keypair – a public key for interacting with the Solana network and receiving transactions. In addition, the wallet will have a private key which is used to sign any transactions to and from the owner’s wallet. The public key can be shared with anyone and works like an account number at a traditional bank. Conversely, the private key is like a bank account password and must be kept hidden and secure at all times.
These transactions include everything from validating smart contracts to using Solana as a non-fungible token (NFT) marketplace. Solana is a blockchain with striking similarities to Ethereum—in fact, it’s often referred to as an “Ethereum killer.” Like Ethereum, the SOL token can be purchased on most major exchanges. The token’s real value is in conducting transactions on the Solana new bitcoin casino off 65 new bitcoin slots of vegas no deposit codes 2020 network, which has unique advantages. People are starting to see a future with many different blockchains, each good at certain things and all working together.
Support
Solana executed another significant network upgrade to address performance issues and enhance scalability. Facilitate staking by providing grants, open source reference implementations, and community support. While investment decisions depend on individual risk tolerance and goals, today’s best performers included Solana tradeo » what do customers think of this company with 6.25% gains and Ethereum with 2.53% growth.
Proof of Stake (PoS)
Both Solana and BNB Smart Chain offer fast processing times and low transaction speeds. However, it is the higher throughput where Solana edges the latter blockchain. Allowing for a higher volume of transactions with lower latency is one of the favorite features for DeFi developers as it helps them in building more scalable applications. Solana is much faster in terms of the number of transactions it can process and has significantly lower transaction fees than rival blockchains like Ethereum. In 2024, SOL remained one of the largest cryptocurrencies by market cap.
- Unlike Ethereum, which uses additional layers to scale, Solana runs everything on one chain.
- USD Coin (USDC) traded at $0.9997 with a market value of $72.4 billion.
- Similarly, anyone should have equal and fair access to make changes to the ledger by submitting transactions at any time.
- Analytics Insight is an award-winning tech news publication that delivers in-depth insights into the major technology trends that impact the markets.
- This method significantly speeds up the network, making transaction times and fees more efficient than many other blockchains.
- This system not only boosts speed but also reduces negative impact on the environment compared to energy-intensive models like Bitcoin’s Proof of Work.
Check out our article on the top Solana decentralized exchanges to get going. Solana has experienced occasional network slowdowns and outages, raising questions about its resilience under heavy load. As with any emerging platform, these incidents highlight the challenges of scaling while maintaining decentralization and security. In 2018, Yakovenko co-founded Solana Labs with Raj Gokal and other former Qualcomm colleagues like Greg Fitzgerald and Stephen Akridge to bring this vision to life. Solana Labs remains a core contributor to the Solana protocol’s development.
One of its highlights is the NFT market, which outshines even Ethereum and Bitcoin in most metrics (users, royalties, collections, etc.). In 2023, Solana released the first crypto-centric mobile phone Saga, to mixed reviews and reactions from the community. Despite that, by December 2023, it sold out, and in January 2024 a new wave of preorders for Chapter 2 began. Most recently, a newer model under the name Seeker has been revealed, addressing both capabilities and the price tag. There have been other projects with premises and scaling capabilities similar to Solana. Marlin is an open protocol that provides a high-performance programmable network infrastructure for DeFi and Web 3.0.
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These changes are aiming to improve stability, scale, and speed—the three pillars Solana is doubling down on. It’s also why Solana has gained traction how to buy bsc in active DeFi trading—in 2024, it even surpassed Ethereum in daily DEX volume. While Ethereum still leads in developer tools and market cap, Solana appeals to builders who prioritize speed.
All of this led to a wider adoption of the blockchain by hundreds of cryptocurrency projects, and now it is one of the most popular blockchain networks in the cryptocurrency world. Blockchain technology is evolving rapidly, and Solana continues to make its case as one of the most promising projects in the cryptocurrency world. With low fees for transactions and high network speeds, Solana (SOL) is becoming a central hub for new decentralized applications. At the heart of Solana’s design is its unique Proof of History (PoH) consensus mechanism, which drastically improves network efficiency and transaction speeds. Ethereum has first mover advantage, and with its massive ecosystem, it is second only to Bitcoin in terms of market capitalization. Ethereum’s 2022 upgrade, which merged its Beacon Chain and Mainnet Chain, provided the framework for its blockchain to be more scalable, secure, and sustainable.
This keeps the chain relatively decentralized while simultaneously allowing for faster, more secure computations. Ethereum, with its growing number of Layer 2 solutions, and other fast Layer 1 blockchains are always coming up with new things. A set of eight key technologies working together is what gives Solana its impressive speed. Besides the crucial Proof of History (PoH), you have Tower BFT, which is a version of Practical Byzantine Fault Tolerance specially tweaked for PoH.