Solana is described as a web-scale blockchain that offers fast, secure, scalable marketplaces and decentralized apps. Today, the system supports 50,000 TPS (Transactions per second) coupled with 400ms Block Times.
The Solana software’s overarching aim is to demonstrate there is a probable set of algorithms using the integration to develop a blockchain. Thus, this would enable transaction throughput to scale effectively with network bandwidth that is satisfying all properties and functionalities of a blockchain which include security, scalability, and decentralization.
Additionally, the system can support an upper bound of 710,000 TPS operating on a standard gigabit network and 28.4 million tps functioning on a 40-gigabit network.
Solana Overview
The Solana (SOL) platform was developed and launched in 2017 by Anatoly Yakovenko. Yakovenko was working at Qualcomm before developing Solana. He has vast experience with compression algorithms after working previously as a software engineer at Dropbox.
Along with Solana’s CTO, Greg Fitzgerald and Eric Williams, they set up a new process of dealing with the traditional throughput issues that existed in the Ethereum and Bitcoin blockchains.
They wanted to develop a trustless, distributed protocol that would enable and support more scalability. The team is currently backed by experiences from the top firms in the world including Microsoft, Twitter, Dropbox, Qualcomm, Intel, Google, Apple, and many others.
The impact that the Solana ecosystem has created so far also attracted many other investors into this space like SLOW Capital, CMCC Global, Foundation Capital, Multicoin Capital, Abstract Ventures, and others.
https://youtu.be/9BFtQiVXQQY
What Consensus Method Does Solana Use?
The network has 200 physically unique nodes that support a throughput of over 50,000 TPS whenever it is running with GPUs. That makes it one of the most active and performant permissionless blockchains globally. One of the most notable challenges affecting distributed systems is the agreement in time.
Unlike bitcoin which is designed to use the proof-of-work (PoW) algorithm as a decentralized engine for the system, Solana utilizes a Poor of History (PoH) method. In the case of Proof of History, users can create some historical records that prove that an event is bound to happen within a particular moment in time
The algorithm used is a high-frequency Verifiable Delay Function that needs a particular number of sequential steps to evaluate effectively. Events and transactions that get evaluated are given a distinct hash and a count that is publicly and effectively verifiable. The count enables users to determine when each transaction or event happened, functioning entirely like a cryptographic time-stamp.
There exists a cryptographic clock within each node that keeps track of the whole network’s time and the ordering of events. This supports high throughput and increased efficiency within the Solana network.
Main Solana Innovations
Solana’s Proof of History consensus algorithm enables users to create increased efficiency and more throughput rate within the Solana network. PoH works as a clock before consensus. Therefore, having historical records of transactions or events enables the system to more readily track transactions and keep track of the ordering of all these events.
Tower BFT – PoH-optimized version of PBFT (Practical Byzantine Fault Toleration)
By description, Tower BFT is a PBFT-like consensus algorithm that is designed to benefit from the synchronized clock. The Tower BFT utilizes the PoH as its cryptographic clock that enables a consensus to be reached without the need of incurring huge messaging overhead and transaction latency.
Turbine – A Block Propagation Protocol
Analysis shows that the Turbine protocol makes it quite easy to transmit data to the blockchain nodes. Turbine can do it by breaking the data into smaller manageable packets. This strategy enables Solana to address the challenges that affect bandwidth and also grow the general capacity to settle network transactions faster.
Gulf Stream – Mempool-less Transaction Forwarding Protocol
The Gulf Stream protocol performs an integral role in pushing transaction caching and forwarding the transaction to the edge of the network. That enables the validators to execute transactions ahead of time, minimizing confirmation time, quicker leader switching, and minimal memory pressure on the validators from unconfirmed transaction pools. Hence, this protocol is what enables Solana to support 50k TPS.
Sealevel – Parallel Smart Contracts Run-Time
Sealevel is described as a hyper-parallelized transaction processing engine mainly used to scale horizontally across SSDs and GPUs. With that system already set in place, it enables Solana to acquire a more efficient runtime and also enables transactions to run simultaneously on the same state blockchains.
Pipeline – Transaction Processing Unit For Validation Optimization
Pipelining is a procedure that features a stream of input data that assigns to different hardware that are fully responsible for it. Hence, the mechanism enables transaction information to become rapidly authenticated and replicated across all nodes in the network.
Cloudbreak And Archivers
Cloudbreak is a horizontally scaled accounts database. To acquire all the needed scalability on the Solana network, it needs to use the services provided by Cloudbreak. The data structure is optimal for concurrent reads and writes across the network.
Archivers are used for data storage. The data on Solana offloads from the validators to a network of nodes that are known as Archivers. The nodes can be lightweight and they are subject to a check, quite often, to guarantee that they are storing the correct data.
What Is Solana (SOL) Cluster?
The Solana Cluster performs a critical role in the Solana software. By description, a cluster is a set of computers that work concurrently. They can be perceived from the outside to be a singular system.
Every Solana cluster is a group of independently owned computers that normally work simultaneously but can also work against one another. These computers help authenticate the output of the untrusted and user-submitted programs. Moreover, we can use the cluster each time a user wants to store an immutable record of events or the programmatic interpretation of these events.
Some of the use cases of the technology are to track which of the computers did work that was quite meaningful in keeping the cluster going. Another one may be to track the possession of real-world assets.
One great thing about all this is that provided that someone has a copy of the ledger, the general output of its programs can always be reproduced and will be wholly independent of the organization that issued it.
How Does Solana Work?
It starts with inputting transactions to the Leader. Leader then sequences the messages and then orders them effectively to ensure that they can be processed ideally by the other nodes. The leader then executes the transactions on the current state that stores mainly in the RAM.
Leader then publishes the transactions and signature of the final state to the Verifiers (replication nodes). Verifiers then execute similar transactions on their copies of the state and publish their signatures of the state in case it receives confirmation. The published confirmations then serve as votes for the consensus algorithm.
The Sol Token
The SOL token is the native currency that powers the Solana ecosystem. Therefore, this token can pass to nodes within the Solana cluster in exchange for running the on-chain programs or authenticating its output. Another use for SOL is to execute micropayments known as lamports.
Interestingly, the current circulating supply of SOL is 26 million. The total supply of SOL caps at around 489 million SOL. The SOL token also has more use cases enabling users to stake it to earn more rewards. Hence, staking is a great way for the users to earn profit in case they are just aiming to hold onto their tokens. The staking process works this way:
- A user moves their tokens to a wallet that supports staking
- They create staking accounts
- Every user chooses a validator from Solana’s validators
- Finally, the user delegates their stake to the validator
How To Store SOL Tokens
There are various ways that users can store their SOL tokens. They can use the Trust Wallet for mobile devices, sollet.io crypto wallet (developed by Serum Academy), and any other SPL-supporting wallets.
For anyone who wants to stake their SOL tokens, they will need to use a crypto wallet that supports staking. One can use SolFlare wallet or any Solana command-line tools. The wallets enable users to create a stake account and then delegate their SOL tokens to a validator.
Solana (SOL) has several partners in the cryptocurrency sector; most of them are the best and brightest in the crypto space. These companies include Chainlink, civic, dfuse, Project Serum, FTX, Terra, Akash, Stardust, Kin, Tempest, Formatic, and more.
How Does Solana Staking Work
Solana staking refers to the process of earning rewards wherein a Solana (SOL) coin owner (stake owner) delegates their stake to the validator. This process works like delegating cash to a bank to gain interest. By entrusting SOL coins to validators, the stakes prove their confidence in confirming transactions on the network.
How do stake owners grow their SOL coins? The inflation rate of SOL dictates the rewards, which fall as the number of transactions increases on the network. Staking SOL coins rather than keeping them in digital wallets allows SOL coin owners to earn up to an 8% Annual Percentage Yield (APY), significantly higher than most banks’ cash interest rates.
When choosing a validator, an SOL coin owner shouldn’t decide based on the validator’s stake size. Instead of delegating SOL coins into one validator, distributing the stake across multiple small operators is the best move for further decentralization.
How do validators earn money with Solana staking? They obtain money by taking a percentage from the earned rewards. Determining the validator’s commission and fees is crucial for SOL coin owners who want to delegate their stakes. Startup validators attract new stakes with zero fees, while seasoned validators may charge 10% or higher. The lower the SOL coin owner pays for the validator’s commission, the higher the reward.
Solana’s Partner Serum Gained 1500%
In recent months, Serum has been quite popular in the news gaining 1500% since its Initial Exchange Offering (IEO). The primary reason why Serum decided to build on Solana is that it provides the best of both decentralized and centralized worlds.
https://youtu.be/MykQvvtacCk
It enables crypto exchanges to become resistant to censorship, noncustodial, affordable, and highly liquid. That can only be achieved with Solana as it enables Serum to run on an on-chain central limit order book that updates after every 400 milliseconds. Solana enables Serum to achieve one of the lowest latency and gas costs, thus making it revolutionary.
The Takeaway
Solana is designed to solve most of the traditional issues that earlier blockchains could not. It displays a new structure for authenticating transactions and a highly efficient consensus algorithm.
Many experts and analysts believe that this platform will turn out to be a major competitor to Ethereum and Bitcoin. Solana is seen to display the rapid advancements in the cryptocurrency sector in the past 10 years. This platform is projected to revolutionize the global blockchain space in the coming years as it continues to develop and achieve various milestones.
