One of the projects that has gained momentum in recent months is Solana. This new project seeks to develop a highly scalable blockchain that allows smart contracts to be executed at low cost.
What is Solana?
It is a new type of open source blockchain that seeks to combine different technologies. Solana’s aim is to be able to execute smart contracts and, consequently, to be able to develop next-generation dApps.
Solana was born with the idea of offering a blockchain that is easily scalable, highly secure and fully decentralized. Potentially, Solana has the capacity to support thousands of transactions. This can be achieved by including more and more nodes.
Behind Solana is Anatoly Yakovenko, who in 2017 founded this project. Yakovenko stands out for having worked at Qualcomm and having worked at Dropbox developing compression algorithms as a Software Engineer.
Yakovenko is assisted by Eric Williams and Greg Fitzgeral, who helped develop a solution to solve the scalability issues present in Bitcoin and Ethereum.
How does Solana work?
The interesting thing about Solana is that it does not have a single consensus system like Bitcoin or Ethereum. Different elements have been combined for this blockchain.
Solana is based on the Proof-of-Stake (PoS) consensus. To reinforce safety, the Tower BFT element is added. This element is a variation of Practical Byzantine Fault Tolerance (PBFT). This mechanism allows distributed networks to obtain consensus despite the existence of malicious nodes.
PBFT adds sets a unique time for the entire network. This innovative system is known as Proof-of-History (PoH). This mechanism generates a chronicle of past events in the blockchain. This generates a common record of past events used as a permanent reference.
Tower BFT leverages this synchronization to reduce the computational requirements for transaction verification. This mechanism eliminates the need for timestamp verification for transactions.
Timestamps are complex to calculate. By eliminating this element, processing time is reduced. It also requires far fewer computational resources than other blockchains.
What are Solana’s main innovations?
This consensus element reduces the need for network power for transaction processing. Greater computational and energy efficiency is achieved, as well as lower costs for building validator nodes. Additionally, it adds simplicity in scaling the network to support more transactions.
A sort of log of past events is generated. This allows you to easily track past transactions.
Adaptation of the PBFT consensus algorithm to take advantage of time synchronization. Tower BFT makes use of PoH as a kind of cryptographic clock. This allows consensus to be obtained without network overhead and transaction latency.
One of the most interesting new features is the data transmission mechanism between nodes. Turbine divides the data into smaller packets. This solves the bandwidth problem. In addition, this mechanism allows to increase the speed to settle transactions.
Its role is very important, as it drives the caching of transactions. It also allows them to be sent to the ends of the network. Validators, through this system, can execute transactions in advance.
This mechanism reduces confirmation times, generates a faster change of leader and reduces the pressure on the validators of groups of unconfirmed transactions.
Through Gulf Stream, Solana could support up to 50,000 transactions per second.
It is a highly parallelized transaction processing engine. This mechanism is used for horizontal scaling of the GPU and SSDs.
Primarily, it offers Solana the ability to obtain a more efficient execution time. Additionally, it allows transactions to run simultaneously on the same stateful blockchain.
Here we have a process in which the flow of input data is assigned to different hardware. What this mechanism offers us is the fast validation and replication of the transaction information among all the nodes of the network.
An element that facilitates the scalability that Solana aims to achieve. Cloudbreak is a data structure system optimized for simultaneous reads and writes.
It is used for data storage. All data from the Solana network are downloaded from the validators to a network of nodes called Archiver.
The interesting thing about these nodes is that they may very well be simple laptops. They are subjected to verification from time to time. This verification is done to check that the data is correct.
Solana, the end of Ethereum?
Currently, Ethereum has a major scalability problem. It currently supports 15 transactions per second. This is insufficient due to the large use of its blockchain to deploy smart contracts. Something that constantly generates saturations in the blockchain and increased fees.
Solana’s blockchain is intended to support smart contracts seamlessly. Solana would theoretically support up to 50,000 transactions per second. We are talking about supporting up to 3,000 times more transactions than Ethereum. Something that should allow the use and deployment of smart contracts without problems and with low fees.
Solana also has an average transaction validation time of between 400-800 milliseconds. We should note that the average block in Ethereum is about 30 seconds. Additionally, commissions in Solana average 0.000005 SOL.
One of Solana’s strengths is that scalability does not require second-layer solutions or blockchain fragmentation. Recall that in Ethereum, blockchain fragmentation is proposed to improve scalability. Bitcoin solves the problem through Lightning Network, a second-layer solution.
Becoming a validator node in Solana is accessible to anyone who wants to. The only thing you will need are hardware specifications that meet the requirements. These requirements are quite affordable. By means of these quite affordable requirements, there are currently more than 1,000 validators in Solana.
Being a validator also does not require a minimum amount of SOL (Solana’s native blockchain token). Ethereum 2.0, which is the shift from consensus to proof-of-stake, requires 32 ether to enter to be a validator node.
SOL, the Solana token
Bitcoin has bitcoin as its currency, Ethereum is ether, Dogecoin the Doge and Solana has the SOL coin. This is the native token of this blockchain and has multiple uses. It is not only used for transactions, but also for deploying smart contracts or for the voting process. It can also be used for micropayments, which are called lamports.
The current outstanding amount is over 300 million SOL and, in principle, there is no limit.
Solana’s best projects
It is a dexcentralized exchange (DEX) with an order book maintained by the protocol. Serum is an innovative DEX model that differs from other decentralized exchanges.
Basically, we will have order books and Japanese candlestick charts, something that does not exist in the current DEX. This eliminates the need for pools based on the AMM system.
Currently, the best and easiest to use wallet in the Solana ecosystem. It is available for Google Chrome, Brave, Microsoft Edge and Mozilla Firefox browsers. Recently, it has been launched for iOS smartphones and should soon be available for Android.
We are talking about a non-custodial wallet, where we are the only owners of the seed phrase. Phantom allows us to store all the SPL tokens and also to access the NFTs we have acquired. Additionally, it allows us to do stacking and thus obtain passive income. Unfortunately, for the exchange of tokens, for the moment, it only supports the decentralized exchange Raydium.
It is an NFT marketplace, where creators can develop this type of tokens and auction them. In addition, it is positioned to offer a solution for metaverses.
It focuses on creators, allowing them to create a page in a comfortable and simple way. Another aspect is that creators do not need to know programming or anything about smart contracts. They simply create their designs and upload them. In addition, it allows creators to earn revenue in an automated way.
NFTs are stored in Arweave. It performs a backup of the work data for a very low fee. The costs of creation and marketing of the works are very low as it is deployed on Solana.
Let’s go now with an automated liquidity provision platform for the Solana blockchain asset exchange. It is currently among one of the most promising DEXs on this network, along with Serum.
This platform integrates a launchpad system for projects that have great potential. It integrates yield farming and liquidity pools that allow users to obtain rewards for positioning their assets.
Platform designed to offer a system of liquidity vaults to obtain the highest return on assets in the Solana blockchain. These vaults are dynamic, obtaining a quite interesting yield.
Mercurial Finance is focused on stable tokens, which play a prominent role in decentralized finance. This makes it possible to guarantee liquidity to various institutional partners for the purpose of creating markets. This platform offers a high degree of liquidity to ensure exchange within it.
In addition, this project has a grant and education system in place at DeFi.
Decentralized cross type exchange and is the first to offer leverage in Solana. Mango Markets benefits from a fast blockchain with very low commissions. It has an elegant user interface with charts and statistics. It also has an order book, which makes it very similar to a centralized exchange.
A very interesting aspect of this DEX is that it has a very low latency. Latency is the time that elapses between sending the transaction to the network and the network accepting it. Usually this type, in other DEX is usually very high, especially if it is built on Ethereum.
Why Solana is an interesting project?
We have seen in broad strokes what Solana is, how it works, the differences with other blockchains and the most interesting projects. And it is all these elements that provide the value of this new blockchain.
Although the main network was launched recently, this project has been in development since 2017. Since the launch of the mainnet and the appearance of a multitude of elements for this blockchain, its value has skyrocketed. Some innovative and interesting projects, such as those described, are the strength of this new blockchain.
Solana stands out for its scalability, supporting up to 50,000 transactions per second. Its proof-of-stake consensus combined with other elements make it ideal for the development and deployment of dApps. Ethereum, Solana’s great rival, seems to be far from competing with Solana.
One of Solana’s great strengths is that anyone can act as a validator node. It is true that specific hardware is required, but it is not particularly expensive. Solana also does not require a minimum amount to become a validator node. Ethereum, on the other hand, requires a minimum of 32 Ether to become a validator node.
Only time will tell if Solana is really able to meet the expectations generated. The project, for the moment, is in good health and more and more people are interested in the project. Serum, Only1 and Rayden are possibly the most outstanding gems within Solana.