What is Solana (SOL)?
Solana is an independent Layer 1 blockchain created as a fast and efficient network with an underlying smart contract protocol. Since its launch in 2020, the Solana network has been dubbed a competitor to Ethereum, and even nicknamed ‘The Ethereum Killer’.
The network’s scalability, combined with its low fees and high speed, makes it a leading choice for many NFT-based decentralized applications (dApps), as well as decentralized finance (DeFi) and digital blockchain-based payment ecosystems.
The Solana network focuses on high transaction throughput and short processing time, which it achieves via its Proof-of-History (PoH) technology. Solana claims to be able to process 65,000 transactions per second, making it one of the fastest in the industry.
The Solana blockchain linearly hashes transactions to create a verifiable order of all the network's activity in order to reach the aforementioned speed. Because of this, there's no need to rely on a block creator's timestamp, or for network validators to check the transaction order.
The Solana network was co-founded in 2017 by systems engineer and computer programmer Anatoly Yakovenko and current Solana COO Raj Gokal. The network operates on the PoH timing mechanism, which was implemented prior to the consensus layer that now operates on a proof-of-stake (PoS) algorithm.
Solana's native token, SOL, is primarily used for staking to support the validation process, and in transaction fees for peer-to-peer (P2P) payments. It best fulfils these functions through an unlimited token supply. However, the blockchain burns 50% of the SOL used in each transaction fee as part of the formula for maintaining its year-on-year inflationary rate.
The remaining 50% of the transaction fee is awarded to the validators of the transaction. Anyone holding enough SOL is able to become a network validator or a delegator to a validator and support the consensus process needed to run the independent blockchain. This mechanism is used to generate rewards for users who stake in support of the Solana blockchain. SOL price is updated live on Binance.
A major breach occurred on the Solana network early on August 3 2022. Decentralized wallet apps, Phantom and Slope, which both work in accordance with the Solana network, publicized the attacks on social media to inform the public.
In total, the hacks resulted in an estimated $8 million in SOL being drained from around 8,000 wallets. The affected wallets were all found to have interacted with other applications within both the iOS and Android mobile operating systems. The source of the hack and whether or not the affected wallet owners would be reimbursed remained unknown.