What Is Solana?

Last Modified:
June 3, 2024

Solana is a blockchain platform that offers speed, scalability, and low transaction costs. Launched in 2020, it was designed to solve some of the limitations of older blockchains such as Bitcoin and Ethereum. Its native cryptocurrency is SOL, which is used for paying fees, staking, and voting on future changes to the network.

Solana can be used to run decentralized applications (dApps) such as DeFi protocols, NFT marketplaces, Web3 projects, games, and social media platforms that need speed and scalability. Many projects have launched tokens on Solana because it can easily integrate with other chains and handle high transaction volumes.

The secret to Solana’s high level of performance is its unique architecture. It uses a combination of two consensus mechanisms: Proof of History (PoH) primarily for timestamping transactions allowing high scalability and Proof of Stake (PoS) for block production and finality.

POS makes Solana cheap, fast, and efficient to use. POH lets validators verify the order of transactions without constantly checking with the rest of the network, letting Solana process a maximum of up to 50,000 transactions per second. Solana can also process transactions on multiple channels simultaneously, speeding up transaction time and preventing network delays.

However, despite its many advantages, Solana has its limitations. The blockchain has experienced network outages several times since its launch. It also has tech issues that are still actively being addressed, and since it is relatively new, its ecosystem is limited compared to established blockchains like Ethereum.

As developers continue building dApps on the platform, Solana is on its way to becoming a leader in Web3 and crypto adoption.

Want to learn how other blockchain networks work? Check our other short guides!