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What is Solana (SOL)? What benefits will holding SOL bring? Explore the key features of Solana’s mechanism and the tokenomics details of SOL below!
WHAT IS SOLANA (SOL)?
SOL is the native token of the Solana ecosystem, launched in 2017. Users can transfer SOL to nodes in the Solana Cluster in return for running online programs or validating their outputs.
SOL has enhanced scalability by applying the proof-of-history (PoH) consensus algorithm combined with the blockchain’s proof-of-stake (PoS) consensus algorithm. Thanks to this, the Solana network can process up to 50,000 transactions per second. This has contributed to the value of the SOL coin continuously increasing in recent times.
ROADMAP & UPDATE OF SOLANA
To overcome issues related to platform design, Solana will implement various solutions in the future.
QUIC: An alternative layer for sending and receiving transactions, improving network speed and stability.
Stake based on QoS transaction proportion: Convert from FCFS (first come, first served) transaction reception to allocation based on node stake proportion.
Priority mechanism for transactions with higher fees: Users can pay additional fees to have their transactions processed first. 50% of this fee will go to the validator and the remaining 50% will be written off. This fee will still be deducted even if the transaction is unsuccessful.
Fee partitioning: Instead of users competing globally to increase transaction fees (similar to when peak Ethereum users increase gas fees across the network), Solana will apply a fee partitioning mechanism. For example, if there are many swap transactions, the fees for the swap transactions will increase, while other fees are not affected.
With ongoing infrastructure upgrades, Solana is expected to gradually improve network stability and performance in the near future.
KEY METRICS
Name: Solana
Token: SOL
Token standard: SPL
Uses of token: Utilities, Administration
Total supply: 559,158,603 SOL
Circulating supply: 462,773,700 SOL
TOKEN SOL ALLOCATION
Seed Sale: 16.23%.
Founding Sale: 12.92%.
Validator Sale: 5.18%.
Strategic Sale: 1.88%.
Auction on CoinList: 1.64%.
Developers: 12.79%.
Solana Foundation: 10.46%.
Community Activities: 38.89%.
SOLANA PROJECT TEAM AND INVESTORS
The Solana development team includes leading experts who have worked at large companies such as Google, Apple, Intel, Twitter, Dropbox, Microsoft and many other reputable brands.
PROJECT TEAM
Solana’s founder is Anatoly Yakovenko, who had experience in distributed system design and compression algorithms at Qualcomm before joining Dropbox.
Greg Fitzgerald (CTO): Former senior software engineer at Qualcomm Boulder, and system software engineer at Alescere.
Raj Gokal, Chief Operating Officer tại General Catalyst, trước đây đã từng là Giám đốc Sản phẩm tại Odama Health và là một doanh nhân tại Rock Health, cũng như là CEO và người đồng sáng lập của Sano.
Eric Williams, Chief Scientist, was previously Chief Data Officer and Co-Founder at Motion, Vice President of Data Science & Analytics at Odama Health, and a Research Fellow at CERN.
INVESTORS
Solana Labs raised $20 million in Series A funding led by Multichain in 2019, followed by a public offering through the Coinlist Platform that raised an additional $1.76 million.
Solana Ventures the investment arm of Solana, has recently secured $314 million, signaling robust growth within the ecosystem. This funding will significantly accelerate the development of projects within Solana Labs’ ecosystem.
HOW DOES SOLANA WORK?
Solana implements a scaling solution using the PoS consensus algorithm, combined with PoH. You can imagine that Solana’s PoH is a common clock for the entire Solana Blockchain system, available and the time source is before consensus was born. Proof of History (PoH) is utilized to validate the order and timeline of events, aiming to encode unreliable time intervals into the ledger.
As for the PoS algorithm, it will be used to validate and confirm the blocks generated by the PoH generator, as illustrated below:
Explain:
(1). When users make trading orders, these orders will be transferred to Solana’s network.
(2). The PoH algorithm generator (Leader) will record the transaction time and add it to a hash in the transaction chain.
(3). These transactions will then be sent to validating nodes to check and create transaction status before being transferred back to the Leader.
The above advantages have helped Solana achieve requirements such as:
High throughput, low cost, low latency, with sufficient decentralization at the consensus layer and clear, detailed scaling solutions.
This is a powerful execution environment and development tools.
Supports reduced application complexity, segmentation, and Layer 2.
Backward compatibility becomes strong and future-proof.
CONCLUDE
What is Solana (SOL)? This is young blockchain platform but has achieved many significant achievements, making many larger blockchain projects admire it. With continuous development and daily improvements, Solana can bring many promising breakthroughs in the future.
