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The proof-of-stake network challenging for blockchain supremacy
Solana is no longer the new blockchain in town. Since its official mainnet launch in March 2020, the network has grown to be one of the biggest in web3. Developers have built hundreds of dapps on the platform and it’s the second-quickest growing blockchain behind Polygon.
Summary
Now in direct competition with Ethereum and BNB Chain, Solana can boast a coin market cap of around $12.9 billion. It regularly processes more than 40 million transactions every day and has more than 400,000 fee-paying daily active accounts.
To add to this, traders on Solana’s top NFT marketplace Magic Eden regularly buy and sell over $2 million worth of non-fungible tokens. Raydium, the biggest DeFi platform on the network, saw a $5.45 billion worth of cryptocurrency move through its exchange in the past 30 days.
All of this is to say that Solana is a serious player in the web3 world. So it’s worth knowing all about it if you’re interest in blockchains, NFTs, cryptocurrency and play-to-earn gaming.
What is Solana?
Solana is an open-source project implementing a new permissionless blockchain able to achieve 50,000 transactions per second.
Founded by former Qualcomm, Intel, and Dropbox engineers, Solana is aiming to capitalize on Ethereum’s gas fee woes.
The team’s other aim is to significantly speed up transactions and reduce fees. They want to do all of this while maintaining a truly decentralized netowrk.
The project was established back in 2017 by Anatoly Yakovenko, who worked at Qualcomm before founding Solana. Before that, he worked at Dropbox as a software engineer.
Accompanying him are Eric Williams and Solana’s CTO, Greg Fitzgerald. They created a brand new process of dealing with traditional throughput problems that existed in the Bitcoin and Ethereum blockchains.
To put the figure of 50,000 transactions per second given by Solana into perspective, proof-of-work (PoW) systems like Bitcoin and Ethereum support about 10 transactions per second. Proof of stake systems like Tendermint support about 1,000 transactions per second.
How does it work?
Up to now, blockchains have mostly made sacrifices to achieve their desired outcome. They’ve chosen between scale, security, and decentralization.
Solana claims to have solved this problem, employing a new consensus algorithm able to achieve fast transaction times without sacrificing security and decentralization.
The Proof-of-History (PoH) system is implemented using a mechanism that originated in the Bitcoin source code, called nLocktime. Without going into the deeper technical aspects, nLocktime post-dates transactions using block height or size, which it does rather than timestamping.
After lots of research and testing, the development team turned this into a cryptographically secure way to record the passing of time.
The entire process is aimed at creating a replicating database that maintains a high level of availability without compromising the transaction rate.
Who is Solana built for?
Solana’s stated mission is to support all high-growth and high-frequency decentralized applications (dapps) and to democratize the world’s financial systems.
At its core, Solana offers scalability to web3 platforms and is capable of supporting over 50,000 transactions per second. Furthermore, transaction costs on the network are estimated to cost approximately $10 for 1 million transactions.
Based on these aspects it would be fair to say that blockchain is set up to deal with the majority of dapps tracked by DappRadar from across various categories such as DeFi, Gaming, and NFTs.
For developers, the network offers a range of features making it a desirable option to build on. Looking past the promised faster and cheaper transactions, developers can code in C, C++, Rust, and more languages.
On top of that, there’s an ambitious roadmap of virtual machine integrations lined up.
What is the Solana cryptocurrency?
SOL is the native token of the Solana blockchain. Users need to pay with SOL in order to process their transactions on the network.
During the 2021 bull run, SOL reached an all-time high of $259.96. It did this on November 6th. Since then, it’s dropped off by a big margin from those peaks.
You can find out how much SOL is worth now by checking any online cryptocurrency price checker.
Which dapps are built on Solana?
DappRadar currently tracks 93 Solana dapps on our Rankings pages. There are 13 dapps with over 1,000 monthly users.
The top five most popular dapps that interact with the blockchain are:
Neopets Meta
Neopets Meta is a play-to-earn virtual pet game built on Solana
Magic Eden
Magic Eden is the most popular and successful secondary marketplace for Solana NFTs.
Gameta
Gameta is a blockchain platform offering users simple games. Their goal is to migrate new users to web3
OpenSea
OpenSea is the largest secondary marketplace overall, that recently started offering Solana NFT trading.
MeanFi
MeanFi is a self-custody, permissionless and trustless bank.
What events has Solana done to draw in new users?
Solana showed their intentions as early as May 2021 they held a hackathon offering a $200,000 prize pool. They also offered $200,000 in seed funding to developers.
Solana even invites you to try and break the network they are so confident in. Asking people to test the 50k transactions per the second statement by stress-testing their blockchain.
Solana’s 2022 Summer Camp: Online Hackathon is taking place between July 11th and August 16th. Participants can prizes and seed funding from a $5 million pot.
Further information for developers about funding and getting started on Solana is linked at the end of this article.
Summary
Solana solves many historical problems associated with older blockchain technology experiences and has one of the best structures for verifying transactions delivered through a more efficient consensus algorithm.
As blockchain technology progresses, we envisage the platform maintaining its place at the top table. It’s certainly one to keep an eye on as web3 technology proliferates and improves.
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