Solana is a new high-performance, permissionless, open-source blockchain project. It shares the name with the company that maintains the project located in San Francisco.
The Solana Network is built from the ground up, especially with scalability in mind. The team aims to demonstrate that when a set of software algorithms are combined to implement a Blockchain, you can avoid network collapses and bottlenecks. In this way, the system maintains performance even when its demand is skyrocketing.
Unlike many blockchain projects that choose to create blockchain algorithms with additional complexities such as 'sharding,' Solana prefers to use existing architectures and algorithms and improve them.
Solana has sought to be scalable while still offering other features already present in any blockchain project, being secure and decentralized.
As described in their white paper [PDF], the limit of transactions exceeds 710 thousand per second in a standard gigabit network and 28.4 million TPS in a 40-gigabit net. The network executes the transactions securely, allowing the programming and execution of programs or apps created in C or Rust, general-purpose programming languages.
Solana nodes check the timing and order of events without the need to witness them directly. As a result, the whole network significantly reduces message overhead.
How does Solana work?
Solana is a high-performance Blockchain. Tests conducted on the Solana testnet, with a network of 200 physically distinct nodes, supported a sustained throughput of more than 50k TPS when run with GPUs. Such numbers are only achievable using several technologies and optimizations:
Proof-of-History (PoH): A high-speed consensus protocol.
Tower BFT: an optimized version of Practical Byzantine Fault Tolerance (PBFT's) Proof of History.
Turbine: - A Bittorrent inspire protocol for block propagation.
Gulf Stream: transaction forwarding protocol without Mempool
Sealevel: A runtime for Parallel Smart Contracts.
Pipelining: a TPU (Transaction Processing Unit) to optimize block validations.
Cloudbreak: An account database that scales horizontally.
Replicators: Distributed Ledger Warehouse
Proof-of-History consensus protocol (PoH)
The Proof-of-History (PoH) mechanism imposes a time-series validation process that improves the efficiency of the Proof of Stake (PoS) consensus mechanism.
Nodes generate a new block in Solana every 400 ms (compared to about 15 seconds for Ethereum and 10 minutes for Bitcoin). It is crucial to establish the chronological order of each block. Without going into too much detail, the network uses a decentralized clock to using SHA256 hashes as a timestamp function. The clock produces a kind of "clock tick" in which each clock tick is 400 ms (instead of one second like a standard clock).
When we take a photograph of a newspaper's front page, we are creating proof that we took the picture after the publication of that newspaper. With Proof of History, you can create a historical record that proves that an event has occurred at a specific point in time.
Solana uses a PoS (not DPoS) consensus mechanism. There are multiple roles in the Solana ecosystem (leaders, validators, archivers, etc.). Unlike DPoS Blockchains, Solana does not delegate these roles among network participants. Solana nodes fulfill all the roles of the network.
Solana's leaders have the task of producing new blocks. They rotate every four blocks (1.6 seconds). A node in the leadership position puts all the transactions into the four blocks that the node is producing. The node shows these blocks, containing the transactions, to the relevant node groups named Solana Clusters. The clusters validate transactions using digital timestamps as a reference and quickly pass the records to other nodes.
Unlike other PoS cryptocurrencies, there are no minimum requirements for the staking amount to be a node on the Solana blockchain. Typically, the amount of rewards per block is proportional to the number of SOL tokens staked on the network. Although the leader selection is pseudo-random, the amount of SOL you bet also influences your probability of becoming a leader that produces blocks. Misbehaving nodes see their stake reduced and get diminished block rewards.
Another key to Solana's operation is assigning different tasks to different nodes on the network, as needed, to optimize speed. All transactions have a timestamp to ensure they are correct, meaning that a Solana Cluster could be responsible for hosting a DeFi platform like Uniswap. Another Solana Cluster could be accountable for microtransaction processing made in Decentraland's virtual world.
Developers can build smart contracts in C, and work is underway on Rust tools, Solana's flagship language for Smart Contract development.
Team and development
The Solana team developed the ecosystem in San Diego, California. Solana's team comprises former employees of Qualcomm, Google, Apple, Microsoft, and Dropbox. In addition to relying on similar database technologies used by Google and Microsoft, Solana's architecture also draws some inspiration from Filecoin, a decentralized data warehousing cryptocurrency project.
Solana's name comes from a beach located 30 km north of San Diego, where Solana, creator, Anatoly Yakovenko, has spent most of his time working in the sector of telecommunications.
Yakovenko theorized that timestamped transactions would exponentially increase the scalability of a blockchain without sacrificing its security or decentralization. He knew it was possible to build it since Google and Intel had implemented similar technologies in their databases, albeit centrally.
Solana does not currently have a defined roadmap as development has suffered several significant delays in the past. Growth continues to advance as well as alliances with important companies in the sector such as Chainlink.
Solana's team wants to reduce the block generation time to just 80 ms. They also hope to make it possible to execute cryptocurrency operations within 1 ms on decentralized exchanges built on the Solana blockchain. For context, Binance's smallest trading time frame is 1 minute.
Payments: You can use the Solana token to make payments. The transaction cost will be around $0.000001. Combined with its high transaction speed, it is perfect even for daily micro-payments.
Distributed Web Services and Storage: A decentralized, encrypted, permissionless, and secure web service and cloud storage system.
Distributed ad exchange: Ad marketing on a decentralized platform can spawn all kinds of data-driven services. But for this, the blockchain must be highly scalable. (For example, Google publishes up to 340,000 ads per second).
Solana native token: SOL
SOL is the native token of the platform. Solana designers have established a supply limit of 1 billion SOL that can be fractioned to make micropayments. You can divide each token up to 34 times. The fraction of SOL is called 'Lamport' and has an approximate value of 0.0000000000582 SOL.
Solana Key Listing in Coinbase Pro
Solana is going live on Coinbase Pro. Coinbase enabled SOL deposits starting Thursday, 20, 2021. There'll be five trading pairs available: USD, EUR, USDT, BTC, and GPB. Trading will begin on May 24, 9:00 EST. Coinbase Pro is the second American exchange to list SOL after Binance US. SOL jumped from $45.2 to $50 after Coinbase posted the announcement. It's currently the 13th biggest cryptocurrency, with a market cap of $13 billion.
PYSwap, a protocol for the DEX of shares of Tokenized Vaults, has recently announced a bridge to the Solana Blockchain. The bridge tries to expand APYSwap's cross-chain interoperability to non-EVM Blockchains. They also want to solve specific challenges when bridging Ethereum. The APYSwap bridge supports token exchange between Ethereum, Solana, Binance Smart Chain, and the Huobi ECO Chain.