What is Solana?

Solana is a blockchain platform, founded in 2017 and run by the Solana Foundation, designed to host decentralized, scalable applications. It is also a cryptocurrency that runs on the Solana blockchain. Its symbol is (SOL).

Solana blockchain, built by Solana Labs, is open source and its source code can be found in github.

Solana unlike, other blockchain networks, uses proof of history (PoH) on top of proof of stake (PoS) as their consensus protocol (see "Solana: A new architecture for a high performance blockchain"). Solana claims that, that allows an efficient and very fast validation, meaning that they can have very low transaction fees, tipically on the order of a fraction of a cent.

The computers that participate on the network are called validators (in other words a validator is a computer that helps to run the Solana network). Participants stake their own SOL to become a validator, in exchange for a chance at earning new SOL and a cut of fees. As running a validator requires significant hardware and financial resources (see "Agave Validator Requirements: Minimum SOL requirements") as well as technical expertise (see "Agave Validator Prerequisites"), it is sometimes said the Solana's validator structure favours centralization.

Solana is used for:

• DeFi (Decentralized Finance): Solana is home to numerous DeFi projects, including decentralized exchanges (DEXs), lending platforms, and yield farming protocols.
• Non-fungible tokens (NFTs): Solana is popular for minting, buying, and selling NFTs due to its low fees and fast transaction speeds.
• Web3 Applications: Solana supports a variety of decentralized apps (dApps), including games, social networks, and marketplaces.
• Payments: With its high speed and low costs, Solana is ideal for microtransactions and cross-border payments.

Solana, at the date of writing this blog, is the fifth biggest cryptocurrency with a market capitalization of over $115,000,000,000 ($115 billions).

Solana has established itself as a significant player in the blockchain space by offering high-speed, low-cost transactions and a growing ecosystem of dApps and NFTs. While it faces challenges such as centralization concerns and occasional outages, its innovations like Proof of History position it as a strong competitor in the race to become the go-to blockchain for decentralized applications.