What is Solana (SOL)? - ELLIPAL

What is Solana (SOL)?

Solana is a highly functional and open-source blockchain. It implements a new, permissionless, and high-speed layer-1 blockchain to achieve its aims of scaling throughput beyond the other popular blockchains while keeping costs low. The project started in 2017 as an ICO, followed by multiple testnet phases, leading to the official launch of the main network in 2020. 

Solana uses a hybrid consensus model that combines a unique proof-of-history (PoH) algorithm with a lightning-fast, proof-of-stake (PoS) synchronization engine. With this model, the Solana network can process over 710,000 transactions per second without the need for any scaling solutions. 

Currently, Solana’s third-generation blockchain is designed to facilitate smart contracts and decentralized applications (DApp), as well as decentralized finance (DeFi) and NFTs. 

What makes Solana unique?

Solana’s innovative design aims to solve the blockchain trilemma. The trilemma is a set of three major challenges that every blockchain faces. This includes decentralization, security, and scalability. The trilemma suggests that every blockchain can only satisfy 2 of the 3 aspects, one aspect must always be sacrificed. Solana is trying to overcome the trilemma and achieve all three aspects at the same time. 

Using the combination of PoS and PoH, the hybrid solution of Solana was born.

Solana’s design solves the trilemma by having one leader node chosen by the PoS mechanism. This reduces the workload on the Solona network. It then creates a chain of transactions by hashing the output of one transaction and using it as the input for the next transaction, which is the PoH mechanism. These concepts allow better scalability and usability of the Solana network. 

What is Solana (SOL) token?

SOL is the native currency and utility token of Solana's blockchain. It provides a means of transferring value and staking. It is currently the top 10 cryptocurrencies in the world based on volume.

SOL holders usually stake the token to validate transactions through the PoS mechanism. SOL is also used to receive rewards and pay transaction fees and enable users to participate in governance.

One thing to note, however, is that around 60% of SOL tokens are controlled by Solana’s founders and the Solana Foundation. Only 38% of SOL was reserved for the community.

SOL can be bought and traded easily on most exchanges. You can find SOL on Binance, Coinbase, KuCoin, and more.

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