What Is Solana (SOL)?

Solana is a blockchain platform that supports decentralized applications (dApps) and cryptocurrency transactions. Launched in 2020, it rapidly gained popularity due to its ability to process thousands of transactions per second (TPS). This makes it one of the fastest networks in blockchain.

Solana’s native cryptocurrency, SOL, powers transactions on the network, pays transaction fees, and participates in the staking process that helps secure the platform.

One key reason behind Solana's appeal is its scalability, which allows the network to handle a high volume of transactions without sacrificing speed or incurring high costs. Compared to Ethereum, Solana offers lower fees and faster processing times, which makes it attractive for developers looking to build efficient decentralized applications.

Solana’s combination of speed, low cost, and scalability has positioned it as a leading blockchain option for performance-focused users.

Learn more about Solana ETFs.

What makes Solana unique?

Solana’s uniqueness stems from its innovative combination of Proof of History (PoH) and Proof of Stake (PoS) mechanisms. PoH adds timestamps to transactions, which allows the network to process transactions faster than blockchains like Ethereum.

This system enables Solana to handle over 2,600 TPS, making it one of the fastest available blockchain platforms. This efficiency makes Solana particularly attractive to developers creating dApps that require high throughput and low transaction costs.

Solana's low fees also distinguish it from other networks like Ethereum, where transaction fees can become prohibitively expensive during peak periods. Solana's architecture allows for minimal costs—often less than a cent per transaction—making it more accessible for developers and users.

While Solana has faced challenges related to centralization and network reliability, its speed and efficiency continue to attract interest from a wide range of crypto projects.

Learn more about Solana tax.

Solana operates on a unique blend of Proof of History (PoH) and Proof of Stake (PoS) to achieve high speed and low-cost performance. PoH works by time-stamping transactions, ensuring they are processed in the correct order without the need for traditional consensus methods, which can slow down other blockchain networks. This time-stamping feature allows Solana to confirm transactions much faster than many other blockchains, giving it a significant advantage in terms of scalability.

PoS, on the other hand, ensures the network's security by allowing users to stake SOL tokens, which helps validate and secure transactions. Validators on the Solana network are responsible for verifying transactions' accuracy and adding them to the blockchain, and they are rewarded for doing so with SOL tokens.

This combination of PoH and PoS allows Solana to be fast and secure, making it a top choice for developers building decentralized applications requiring high transaction throughput.

Looking to calculate your crypto profit? Try our free crypto profit calculator.

Solana was founded in 2017 by Anatoly Yakovenko, who focused on solving the scalability issues of earlier blockchains like Ethereum. Yakovenko, who previously worked as a software engineer at Qualcomm, designed Solana to handle high transaction volumes without other networks' high costs and slower processing speeds.

The platform officially launched in 2020, and since then, it has quickly risen in prominence, becoming one of the top cryptocurrencies by market capitalization.

One of the defining moments in Solana’s history was the launch of its first major NFT project, Degenerate Ape Academy, in 2021. This helped boost the price and visibility of the Solana network.

Solana has faced its share of challenges, including network outages and criticisms of centralization. Despite these hurdles, the blockchain’s rapid rise in popularity and continuous development have cemented its place as one of the most talked-about blockchain platforms today.

Due to their roles in the blockchain space, Solana and Ethereum are often compared, but each offers distinct advantages. Solana is known for its speed, handling over 2,600 transactions per second, while Ethereum processes far fewer—around 15 TPS.

This gives Solana an edge in transaction speed and cost-efficiency, making it a preferred choice for developers looking to avoid Ethereum’s notorious gas fees. However, Ethereum has a much more mature and established ecosystem, with thousands of dApps already running on its platform.

Ethereum provides investors greater stability, given its longer history and extensive user base. To learn more, check out our writing on Solana vs Ethereum to learn more.

Looking to calculate your Ethereum profit? Try our free Ethereum profit calculator.

Solana operates on its independent blockchain network, built from the ground up to maximize scalability and efficiency. Unlike many other blockchain platforms constrained by slower consensus mechanisms, Solana’s combination of Proof of History and Proof of Stake allows it to process transactions quickly and cheaply. This makes Solana one of the most advanced networks in terms of handling large transaction volumes.

Solana’s independent network allows developers to build decentralized applications (dApps) and decentralized finance (DeFi) platforms without the performance bottlenecks that can occur on other blockchains. The network’s ability to scale efficiently has drawn interest from various projects, from NFT marketplaces to high-frequency trading platforms. Solana’s network continues to evolve as new features and upgrades are implemented to further improve its performance and reliability.

Investing in Solana depends on your risk tolerance and investment goals. The platform’s speed, low fees, and growing ecosystem have made it an attractive option for developers and investors.

However, Solana has faced criticism for network outages and concerns about centralization, which could threaten long-term stability. Still, its rapid development and widespread adoption among dApp developers make it a project with significant potential.

For those considering an investment, it is essential to evaluate whether you believe Solana’s technical advantages will continue to drive demand for the SOL token. While Solana offers many advantages over other blockchains, it also faces stiff competition from platforms like Ethereum, which has a more extensive user base and established infrastructure.

Investors should weigh these factors and consider consulting with a financial advisor.

What gives Solana value?

Solana’s value is derived from its ability to offer a fast, scalable, and low-cost environment for decentralized applications. The native SOL token is used to pay for transactions, staking, and network governance, making it a core platform component. As the Solana ecosystem grows, demand for SOL will likely increase, driving its value higher.

How many Solana (SOL) coins are there in circulation?

There are currently around 468 million SOL coins in circulation. Unlike Bitcoin, Solana does not have a capped supply but a decreasing inflation rate. This inflation rate is set to stabilize at 1.5%, with half of each transaction fee being burned to slow the growth of the circulating supply over time.

Looking to calculate your crypto taxes? Try our free crypto tax calculator.

You can buy Solana (SOL) on several major cryptocurrency exchanges, including Coinbase, Binance, and Kraken. Once you’ve purchased SOL, store it in a secure crypto wallet.

Options include hardware wallets like Ledger, which offer enhanced security, or software wallets like Phantom, which are more convenient for regular transactions. Always choose a wallet that suits your needs based on security and usability.

See our expert picks of the best Solana wallets.

Solana price

Solana’s price fluctuates depending on market conditions and developments within the blockchain ecosystem. It’s important to monitor the current price on your preferred exchange before making any investment decisions. Factors influencing Solana’s price include its adoption rate, network upgrades, and overall market sentiment.

Solana FAQs

What does Solana actually do?

Solana is a blockchain platform that enables developers to create decentralized applications (dApps) and process cryptocurrency transactions. It is designed for high-speed performance and scalability, making it ideal for projects that require fast transaction times and low fees.

Why is Solana so special?

Solana stands out due to its combination of Proof of History and Proof of Stake, which allows it to process thousands of transactions per second at a fraction of the cost compared to other blockchains. Its ability to scale efficiently makes it an attractive option for developers and users looking for fast, cost-effective solutions.

Is Solana better than Ethereum?

Solana is faster and cheaper than Ethereum, but Ethereum has a more established ecosystem and a larger user base. Whether Solana is better depends on your priorities—speed, cost-efficiency, stability, and ecosystem maturity.

Who can be a validator on Solana?

Anyone can become a validator on Solana by staking SOL tokens and running a validator node. Validators are key to securing the network and validating transactions, and they earn rewards in SOL tokens.

Learn more about Solana staking.