Exploring the Solana blockchain
VALR is excited to announce the listing of Solana (SOL) on our exchange.
Solana has taken the world of crypto by the horns over the past year, soaring exponentially from its sub-$1 launch in March 2020 to a current trading range above the $200 mark. Besides the explosive growth that has seen the project rise to fifth highest by token valuation, Solana offers novel blockchain tech that allows for cheap and rapid transacting on the network.
Solana’s origins
Anatoly Yakovenko, a software engineer formerly at Qualcomm, began development on Solana in 2017. Together with colleague Greg Fitzgerald, Yakovenko began building a novel layer-1 network that aimed to solve the scaling issues at the core of Ethereum’s growing pains.
Solana’s ecosystem has received ardent backing from 29 year old FTX chief Sam Bankman-Fried, who infamously offered to buy out a notable trader’s SOL holdings back in January at a price of $3. Months later, it appears that his confidence was well placed.
Unique offerings
Solana foregoes the Proof-of-Work (PoW) consensus pioneered by the likes of Bitcoin and Ethereum, opting instead for Yakovenko’s novel Proof-of-History algorithm blended with more recently popularised Proof-of-Stake (PoS).
The network has a reported capacity of 65,000 transactions per second (TPS), with the project’s whitepaper indicating that this could increase to an upper range of 710,000 TPS with current connectivity considerations. Following rapid adoption in 2021, the network suffered a 17 hour outage in September, after buckling under the weight of a claimed 400,000 TPS.
For context, Ethereum’s current capacity maxes out at roughly 13 TPS, due to its PoW architecture. High congestion on the Ethereum network due to the rise of NFTs and DeFi on the protocol has consequently seen transaction costs rise to hundreds of dollars, rendering it inaccessible to a large segment of retail users. In contrast, Solana offers sub-cent fees, even at scale, allowing for transactions to be conducted almost instantly with near-zero costs.
With ETH 2.0 on the horizon, it remains to be seen how two of the hottest smart contract protocols in crypto fare in coming months. However, it’s undeniable that in its incredibly short lifetime, Solana has gone a long way in challenging ETH’s dominance as the go-to smart contract platform for all things crypto.
Start your Solana journey with VALR now.