Solana is a high-performance Layer 1 blockchain optimized for user experience, delivering fast execution speeds and low transaction costs. Today, Solana delivers 400ms block times, upwards of 2000 transactions-per-second (TPS), sub-cent transaction costs, and is home to over 120 unique applications.
Formerly known as Loom Network, Solana’s origins can be traced back to 2017, when founder Anatoly Yakovenko published his Proof-of-History whitepaper, proposing a new methodology for keeping time between computers that do not trust or know one another. With the contribution of former Qualcomm co-workers Greg Fitzgerald and Stephen Ackridge, the idea turned into reality and Solana’s mainnet-beta went live in March 2021.
Similar to Ethereum post-Merge, Solana uses a Proof-of-Stake consensus mechanism, meaning validators influence in securing the network is contingent on the amount of stake they hold. Solana uses the $SOL token to subsidize computational resources for validators, like gas fees, for delegating blockspace through staking, and proliferating the ecosystem.
What is Solana’s Vision?
In the words of Anatoly, “the goal with Solana is to have one giant global state machine with the lowest latency and lowest fees that physics will allow”.
Why Solana?
Solana’s unique architecture and key features allows for optimizations in speed, scalability, and costs. Using a monolithic architecture removes the need for liquidity fragmentation and additional developer overhead, allowing developers on Solana to focus on building high quality consumer-centric products and services.
Speed
Speed is one of the most important factors of internet applications and services today - being able to deliver information with as little latency as possible is critical for businesses with real-time data needs. However, blockchains were originally built around security and decentralization, which came at the cost of speed.
Bitcoin uses a Proof-of-Work consensus mechanism, in which miners compete to solve a cryptographic puzzle in order to produce the next block. This process is intentionally resource-intensive for security purposes - but it also means transactions can take up to 10 minutes or more to be executed.
Ethereum, which originally used Proof-of-Work before the Merge, produces transactions sequentially - or one at a time. By doing so, the network can be certain the order of transactions for everyone is the correct one. However, as a result, blocks are produced every 12 seconds.
Solana uses parallel processing to deliver its high speed and throughput. This is made possible with the Sealevel engine. Sealevel uses a multi-threaded architecture to process multiple non-conflicting transactions concurrently, allowing Solana to deliver its high speeds and throughput.
Scalability
As with any digital network, the ability to support an influx of new users and development over time is critical for blockchains.
Ethereum scalability today is largely contingent on the proliferation of rollups and other Layer 2 solutions. Rollups are intended to scale Ethereum by reducing overall network traffic and activity - they execute transactions in their own execution environment, which are then sent to Ethereum to be settled. However, the growth and advancement of rollups is still largely reliant on Ethereum’s overall success. Using a rollup requires bridging from Ethereum, which imposes complexities for new users. Furthermore, the nature of rollup sequencers has raised concerns regarding the centralization of these alternative systems.
Cosmos chains often function as their own blockchain network, and are therefore responsible for their own scalability - there is no particular blueprint or roadmap. Cosmos app-chains offer customizability that can enhance application experience, and are interconnected among each other by the IBC. However, this approach hinders adoption for newer applications which still need to bootstrap users.
On the other hand, Solana’s scalability is mostly contingent on continuous breakthroughs in hardware development. Moore’s law suggests that the number of transistors on a microchip doubles every 2 years at minimal cost, meaning hardware becomes exponentially more efficient over time. Similar to AI models, Solana’s growth and advancement over time requires continuous breakthroughs in the efficiency of compute. Furthermore, Solana has introduced key features like state compression, which allow data to be processed and stored at a fraction of the cost previously. This is already actively in use with applications like DriP, which mint (millions) of cNFTs on-chain every week.
Cost-Savings
Gas fees are a part of any blockchain network - they provide a subsidy for the computational resources exhausted by validators to secure and verify the network. However, historically speaking, service providers aim to lower costs for businesses, oftentimes engaging in a “race to zero fees” with competitors.
Ethereum has undergone numerous developments in its approach to gas. Currently under EIP-1559, Ethereum gas is calculated by a dynamic model which adjusts for network activity - as activity picks up, so does the gas fee. The fact remains that today, the costs of operations on-chain are quite high on Ethereum due to gas.
On the other hand, Solana offers exponentially lower transaction costs. It uses a uniform base fee of < $.01 for all transactions, in addition to a priority fee which the sender can opt in to. This allows for use-cases not possible on other networks - for example, Jupiter’s DCA feature, which performs multiple transactions at varying market conditions on user’s behalf. On Ethereum, a feature like this could cost the end-user hundreds of dollars in gas fees alone, whereas on Solana, this may be worth a penny at most.
Conclusion
Solana is a high-performance integrated Layer 1 blockchain. Its unique architecture and features offer enhancements in speed, scalability, and cost-savings relative to other blockchains. While other networks and ecosystems, such as Ethereum or Cosmos, provide developers with many tools and resources to choose from to custom-build their chain, Solana allows developers to focus directly on building end-user products and services.
Solana is building the most powerful global state machine possible, empowering a wide range of retail and enterprise-focused products and services that are indeed, Only Possible On Solana.
Disclaimer: None of the content in this article should be construed as financial advise. It is for information purposes only. Always do you own research.