INTRODUCTION TO SOLANA
A killer for Ethereum?
We know how energy-consuming the use of the PoW mechanism is. Neither Bitcoin nor even Ethereum, with its PoS mechanism, turned out to be sufficiently scalable. But what if there is an even faster and safer method of reaching consensus? This method was developed and implemented in the Solana blockchain.
Solana is a project based on the blockchain protocol, focused on fast transactions and high throughput. Solana is used to create decentralized applications and smart contracts, and its users can pay their transaction fees and interact with smart contracts using SOL (native token).
Solving the problem of increasing bandwidth and scalability is important for the development of the crypto industry, so Solana and its innovations attracted the attention of users. Let’s take a closer look at how everything works.
The mechanism
So, the main innovation that Anatoly Yakovenko (the creator of Solana) and his team developed is the Proof of History mechanism
Proof of History is a kind of synchronized clock.
PoH essentially assigns a timestamp for each transaction and disables the ability for miners and bots to determine the order in which transactions are recorded in the blockchain. As Yakovenko himself says: «This provides greater security and resistance to censorship».
That is, timestamps are generated for each node using SHA256 calculations. This function takes input data and produces a unique result that is very difficult to predict. And the blockchain also uses verifiable delay functions (VDF). VDF requires a certain number of sequential actions to be performed and produces a unique result that is available for public confirmation. VDF can only be solved by using a CPU on a single core by performing a certain sequence of steps. This implementation creates a sequential hash that is used to synchronize the network. Preimage-resistant, the hash is continuously repeated, the previous output is used as the next input. The quantity and the current output signal are recorded periodically.
A verifiable transaction order is provided, which the validator adds to the block, without the need for a regular timestamp. And also, since hashing takes a certain amount of time to complete, validators can check how much time has passed.
The developers compare this to the situation when you take a photo from the cover of the New York Times, you create proof that your photo was taken after the publication of this newspaper, or you have some way to influence what the New York Times publishes. With the help of a history proof, you can create a historical record that proves that an event occurred at a certain point in time.
Of course, all this allows you to significantly speed up the time of checking transactions on the network. But that’s not all. Here are some more innovations that Solana uses for high speed and scalability:
· Tower BFT is a PoH-optimized version of practical Byzantine fault tolerance;
· Turbine is a block distribution protocol. Transactions are divided into parts so as not to transfer full blocks to nodes;
· Gulf stream is a transaction forwarding protocol without Mempool;
· Archivers store small parts of the state that are periodically checked;
· Cloudbreak optimizes multithreaded writing to disk;
· Pipeline is a transaction processing block that is necessary to optimize verification.
· Sealevel is a parallel smart contract execution environment that can process tens of thousands of contracts in parallel.
Validators (for checking and adding transactions to the blockchain) are selected depending on their share (the higher the share, the higher the probability of selection). In addition, with the help of a compatible crypto wallet, you can place your tokens with validators who process transactions on the network. The successful validator then shares some of the rewards with those who have placed a stake. This reward mechanism encourages validators and delegators to act in the interests of the network. This ensures the security of the network, since participants invest in it financially, which increases its functionality and liquidity.
SOL Token
The project token is called SOL. Users use it to pay transaction fees or when interacting with smart contracts, as well as to place tokens as part of the mechanism for confirming consensus on rates. SOL uses the SPL protocol.
SPL is a standard for Solana blockchain tokens, similar to ERC-20 in Ethereum.
The token was first launched on the Solana beta testing network in March 2020. Its price has increased almost 30 times since that moment, and now SOL is among the top 20 largest cryptocurrencies by market capitalization.
The Solana Foundation announced that a total of 489 million tokens will be issued in circulation.
Prospects and popularity of the project
The technologies used in the Solana blockchain significantly expand the range of its use. And in addition, they attract a large number of developers who are often in search of a cheaper analogue of Ethereum. To date, more than 150 projects around the world use the Solana blockchain, such as: Maps.me, Audis, Serum, Radium, Exodus, Nina, Oxygen and many others. We are sure you have heard about many of these projects. full list can be found on the official page of the project (https://solana.com/ecosystem).
This year, the team held 2 hackathons with funding up to $ 1 million. To date, the project has more than 900 active validators, more than 82 million blocks and 7 million unique SOL wallets have been created. Solana passes more than 50,000 transactions per second with a blocking time of only 400 milliseconds, while the cost of network transactions is estimated at $ 10 per 1 million transactions. The total value locked in the Solana ecosystem as of July 16, 2021 is $ 961 million!
These numbers for a relatively young project are impressive, aren’t they?
For comparison, the blocking time of Bitcoin is about 10 minutes, and Ethereum is about 15 seconds.
SAN FRANCISCO, JUNE 9, 2021 — Solana Labs announced today it has completed a private token sale of $314,159,265 led by Andreessen Horowitz and Polychain Capital with participation from 1kx, Alameda Research, Blockchange Ventures, CMS Holdings, Coinfund, CoinShares, Collab Currency, MGNR (Memetic Capital), Multicoin Capital, ParaFi Capital, Sino Global Capital, Jump Trading, and select individual investors like Boys Noize.
Solana is often referred to as the “killer of Ethereum”. On the one hand, it is not unreasonable, because the PoH mechanism significantly increases the speed in the network and scalability, even in comparison with PoS. But still, it is too early to say that Solana will displace Ethereum, and in our opinion it is not quite appropriate to say that. Anatoly Yakovenko himself said that, Solana do not oppose Ethereum, as it would be “destructive for the entire industry”.
Conclusion
Numbers, investments of large investors, a unique mechanism and technologies, all of these make the Solana project attractive and successful.
We see Solana as a prospect for the future of the crypto industry, so we are its validators. If you want to lock your SOL tokens with our validator, you can read the instructions on how to do it here:
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