Solana is a web-scale blockchain for fast, secure, scalable, decentralized apps and marketplaces.
Background :
Founder, Anatoly Yakovenko, is a software engineer with thirteen years of experience working at Qualcomm, a fortune 500 chip manufacturer. In 2017, Anatoly along with his cohorts at Qualcomm & Dropbox, Greg Fitzgerald, and CTO Eric Williams envisioned a super-fast, secure, reliable, world’s first web-scale decentralized blockchain platform that would revolutionize the crypto-verse.
What is Solana?
Solana is a platform that breaks the blockchain trilemma making it the breeding ground for all the fast-growing Decentralized Apps (Dapps), Decentralized Financial institutions (De-Fi’s), and Marketplaces. It can process up to 60,000 TPS (transactions per second) with 400 ms block times without sacrificing decentralization and security.
Since centralized clocks would not work in decentralized blockchains, Solana created its exceptional decentralized clock for its entire network to reference. Its proof-of-history (PoH) mechanism takes its proof-of-stake(PoS) consensus to the next level by time-stamping transactions.
The overachieving goal of Solana is that it is built for speed, without trade-offs.
Link: Solana Core Concepts (Community Video) At its core, what makes Solana interesting is:
1. Scalability: Solana is capable of supporting over 50,000 transactions per second while maintaining block times of 400 milliseconds.
2. Decentralization: with the use of the Turbine block propagation protocol, the platform can support thousands of nodes while remaining performant and scalable
3. Inexpensive execution: transaction costs on the network are estimated to cost 10 USD for 1 million transactions. You can even test Solanas source code, see the repositories, access mainnet, and much more from the links given below:
Solana's interoperable blockchain system is based on its 8 innovations :
Proof of History - a clock before consensus.
Tower Byzantine Fault Tolerance - a PoH-optimized version of PBFT.
Turbine - a block propagation protocol.
Gulfstream - a Mempool-less transaction forwarding protocol.
Sealevel - the world’s first parallel smart contracts run-time.
Pipelining - a transaction processing unit for validation.
Cloudbreak - a horizontally-scaled accounts database.
Archivers - for distributed ledger storage.
1. Proof- of-history
One of the biggest challenges with distributed systems is the agreement in time.
Unlike Bitcoin that uses the PoW algorithm as a decentralized clock for the system, Solana uses a Proof of History(PoH) mechanism. With PoH you can create historical records that prove that an event occurs during a specific moment in time. The algorithm is a high-frequency Verifiable Delay Function(VDF) called the SHA256.
How does the consensus work?
Transactions or events that are evaluated on the SHA256 Algorithm are given a unique hash and a count that can be publicly and effectively verified. The count allows us to know when each transaction or event occurred, functioning like a cryptographic time-stamp. Within every node, there is also a cryptographic clock that keeps track of the network’s time and the ordering of events. This allows high throughput and more efficiency within the Solana network.
Proof-Of-History sequence (Source: genesisblockhk.com/what-is-solana)
2. Tower Byzantine Fault Tolerance (TBFT)
The TBFT leverages Solana’s synchronized Proof-Of-History (PoH)clock before consensus to reduce message overload and low latency.
3. Turbine The turbine is a block propagation protocol that makes it easier to transmit data to the blockchain nodes. In a decentralized system, heavy messages require more nodes to process the data which in turn takes more time and isn't cost-effective. Turbine protocol helps break this data into small packets to avoid forks and settles transactions faster.
4. Gulfstream
The Gulf Stream protocol assumes a significant part in pushing transaction caching and forwarding it to the blockchain network. This allows the validators to execute the transactions ahead of time, reducing confirmation time, faster leader switching, and reduced memory pressure on validators from unconfirmed transaction pools. So this protocol is what allows Solana to support 50k TPS
5. Sea-level
Solana is a hyper-parallelized smart contract engine that can process all the transactions in a single shard. This makes Solana so fast in its transactions, as sea level can find all the non-overlapping transactions occurring in a block and execute them in parallel — what is called parallel execution. This engine is used to scale horizontally across GPUs and SSDs.
6. Pipelining Pipelining is a transaction processing unit for validation optimization. This quintessential process channels the stream of input data that needs to be processed by a sequence of steps and assigns different hardware responsible for each step.
Pipelining in Solana
On the Solana network, the pipeline mechanism — Transaction Processing Unit — progresses through Data Fetching at the kernel level, Signature Verification at the GPU level, Banking at the CPU level, and Writing at the kernel space. By the time the TPU starts to send blocks out to the validators, it’s already fetched in the next set of packets, verified their signatures, and begun crediting tokens.
7. Cloud break
Solana achieves scalability with no risk of sharding by organizing a database that simultaneously reads and writes transaction input. Cloudbreak establishes a data structure where transactions are processed in software that utilizes every hardware responsible for indexing data.
8. Archivers
In Solana, all the data is offloaded in a network of nodes called Archivers.
Solana’s network allows every node to replicate information from the blockchain according to the space available on their hardware. Archivers download their respective data from validators, and this data is accessible to the network.
Tokenomics
What is a SOL token?
SOL is the native asset of the Solana blockchain. It is burned to pay for fees on the Solana network. SOL can also be staked to become a blockchain node. It is used for:
Staking: Solana is in the process of enabling inflation rewards for staking the SOL token in exchange for powering and supporting the network.
Transaction fees: users can use the SOL token to pay for simple token transactions and smart-contract executions on the network.
Governance: the SOL token will be used in governance voting in the future.
How Many Solana (SOL) Coins Are There in Circulation?
The Solana Foundation has announced that a total of 489 million SOL tokens will be released in circulation. At the moment, about 270 million of these have already entered the market.
The SOL token distribution is as follows:
16.23 % - Initial seed sale
12.92% - Founding sale
12.79% - Among the team members
10.46% - Solana foundation
The remaining tokens were already released for public and private sales or are still to be released to the market.
For further information please refer: https://research.binance.com/en/projects/solana
Genesis Block Distribution (Source: ICODROPS)
Solana Funding :
Solana has gained $56.1 M in funding from 30 investors, $5 M was from seed auction. Their most recent investors are MXC exchanges, Early Stage VC, and Block Dream Fund.
Notable investors (Source: ICODROPS)
Solana Key metrics :
SOL tokens can be purchased on exchanges like Binance, which has the highest SOL/USDT trading volume, $8,947,213 as of February 2021.
SOL token current price ( 2 May , 2021 ) - $48
Market Cap - $13 B
Circulating Supply - 272 M out of 490 M
Valuation - 120 B
Solana’s Progress report :
1. The Solana project is an open-source project with 74 repositories on its Github page with 14 active contributors.
2. Solana has the main repository that is actively maintained and can be found at https://github.com/solana-labs/solana.
3. The Solana main repo has 263 releases, 108 contributors, 13,379 commits, 74 open pull requests, 13099 closed pull requests, and 74 merged pull requests.
Solana (SOL) Partnership Projects
The following are other recent Solana partnerships in the news:
1. Tether tokens USDT now Live on Solana – Link
2. Sushiswap looks to deploy Smart contracts on a Solana port – link
3. Solana launches Raydium, the first automated market maker AMM on the Solana blockchain – link
4. Serum, a decentralized derivatives exchange, is launched on the Solana blockchain considering that it can handle up to 710,000 TPS and current capacity tested to 50000tps. – link
5. The Graph network, an open API for blockchains, expands support for Solana. – link
6. Other projects like Solana beach, Oxygen, Mango markets, PsyOptions, Audacious Project, Star Atlas, Civic, Akash are also some projects by Solana .
Link: Solana Emerging Ecosystem would provide you with detailed information on some of Solana’s outstanding projects.
Solana projects & partnerships (Source: solana.com)
However, this image is just a quick summary and doesn’t, by far, include all the current projects being built. At the moment of writing, the Solana ecosystem tracker counts more than 110 different projects from exchanges to blockchains to apps. Solana’s Project Team :
Figure 7 : Solana Team (Source: ICODROPS)
Conclusion :
Solana is the world's first web-scale blockchain, however complicated - it does solve the throughput faced by the traditional blockchain technology. It is revolutionary, secure, and scalable. The platform will be a strong competitor to Ethereum 2.0, Polkadot, and Cosmos. It has shown fast advancements in mere 5 years. The platform will be something to look out for as it continues to develop!
Glossary
1. DeFi:
Decentralized finance (commonly referred to as DeFi) is a blockchain-based form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks to offer traditional financial instruments, and instead utilizes smart contracts on blockchains, the most common being Ethereum.
2. Decentralized applications (dApps) :
Dapps are digital applications or programs that exist and run on a blockchain or P2P network of computers instead of a single computer, and are outside the purview and control of a single authority.
3. Sharding :
Sharding is a database architecture pattern related to horizontal partitioning — the practice of separating one table's rows into multiple different tables, known as partitions. Each partition has the same schema and columns, but also entirely different rows
4. The blockchain trilemma :
The blockchain trilemma addresses the challenges developers face in creating a blockchain that is stable, secure and decentralized . the three core of blockchain technology - scalability, decentralization, security.
5. A “fork”
A fork is simply an occurrence of a disagreement.
6. What Is a Consensus Mechanism?
A consensus mechanism is a fault-tolerant mechanism that is used in computer and blockchain systems to achieve the necessary agreement on a single data value or a single state of the network among distributed processes or multi-agent systems, such as with cryptocurrencies. It is useful in record-keeping, among other things
7. The proof of work (PoW):
PoW is a common consensus algorithm used by the most popular cryptocurrency networks like bitcoin and litecoin. It requires a participant node to prove that the work done and submitted by them qualifies them to receive the right to add new transactions to the blockchain. However, this whole mining mechanism of bitcoin needs high energy consumption and longer processing time.
8. The proof of stake (PoS):
PoS is another common consensus algorithm that evolved as a low-cost, low-energy consuming alternative to POW algorithm. It involves allocation of responsibility in maintaining the public ledger to a participant node in proportion to the number of virtual currency tokens held by it. However, this comes with a drawback that it promotes crypto coin saving, instead of spending.