SOL is a native token of a high-throughput DLT-based cryptocurrency platform Solana. The company behind the platform is Solana Labs, Inc., based in San Francisco. It develops a scalable, decentralized Layer 1 blockchain network devoid of security risks that are often entailed by the sharding technology.
The platform is based on the Proof of History algorithm that delivers mathematically guaranteed proofs of time-lapse between two transactions. The algorithm of Solana enables a reliable check and verification of the timestamp on each block. Such an approach decreases the time needed to prevent the production of the same block by other participants. The goal of Solana is to produce up to 710 transactions per second on a 1GB network without partitioning of data.
Coordination between the event and synchronization of time between transactions is the basic problem that Solana aims to resolve. Coordination of events requires time and huge resources.
Sharding is one of the techniques used by developers to achieve the goal but this solution has a range of vulnerabilities, including the problem with the partitioning of the transactions. When it’s not handled well, it entails fraudulent transactions and double-spending.
A time-based approach applied to a consensus within the Solana blockchain doesn’t require all nodes of the network to confirm a transaction. The only thing that is needed is to confirm that an event A took place before an event B. To make it possible, Solana designed a new blockchain architecture with a new concept integrated into it that features better scalability and lower costs.
Coordination of time is a complicated issue and Solana brings its own unusual solution that is called Proof of History. The platform employs blockchain for trusted time coordination thus reducing expenditures on it. The procedure employed by Solana is performed faster and also helps to save time. The design of the system implies that the Proof of History sequence works together with a cryptographic hash function.
The developers usually face a lot of challenges with Layer 2 and sharding solutions. Solana has developed incredibly simple alternatives without sacrificing performance. The main challenge that holds back the industry in the opinion of Solana’s CEO is the structure of all blockchains that present single-threaded processors. This is the reason why they can make only one update at a time. Solana, instead, offers a multithreaded solution that is able to manage 50,000 TPS on a global network including 200 nodes. This is an incredible achievement taking into account that Tron and Ripple can process 2,000 TPS and 1,500 TPS correspondingly, while VISA can handle 65,000 TPS.
Solana raised a seed round in 2018 and then built a private testnet. Series A funding was needed to improve engineering and project management before launching a mainnet.
Series A investment round secured 21.5 million USD in funding with a leading investor Multicoin Capital. The list of other companies that contributed their investments include such companies as Distributed Global, Blocktower Capital, Foundation Capital, Blockchange VC, Slow Ventures, NEO Global Capital, Passport Capital, and Rockaway Ventures. The investors received SOL tokens in exchange for their investment, not equity in Solana.
The interest of investors is partly explained by the fact that the company provided a staking guarantee to shelter early investors making SOL coin redeemable 90% of the auction clearing price. The guarantee works even when users buy coins on the exchanges that listed the coin. The launch auction conducted on Coinlist in March 2020 provided 1.76 million USD in funding to the platform. In this way, the volume of capital raised by the company has reached 25.6 million USD. The platform sold 8 million SOL tokens at a rate of 0.22 USD per token via a Dutch auction. The sale ended on March 25th, 2020.
It’s necessary to create a wallet if you want to get SOL tokens on the Solana blockchain. Solana supports different kinds of wallets in the Solana native app and wallets from third parties. The Solana team recommends using Trust Wallet, Ledger Live, Ledger Nano S for common users. The advanced users can employ Command Line Wallets supporting different types of wallets to be used directly in the interface with command-line tools that should be first installed. Solana Tool Suite is offered on the site of the platform.
Solana team and partnerships
Many members of the Solana founding team are from telecom hardware giant Qualcomm.
Anatoly Yakovenko, the founder and CEO of the project, has vast experience of work, previously contributing efforts to the development of such projects as Qualcomm, Mesosphere, Brew, and Dropbox. Anatoly is a holder of 2 patents for highly efficient operating systems protocols.
Eric Williams, co-founder and Chief Scientist, is at the head of the data science division and token economics in Solana. Eric is a Berkeley graduate, where he studied particle physics. He received a PhD from Columbia when he worked in CERN (European Organization for Nuclear Research).
Stephen Akridge, co-founder and Head of Engineering, who previously worked for Salesforce, Qualcomm and Intel. His expertise in GPU optimization at Qualcomm and Intel helped to develop the GPU backend, always beating Nvidia.
It is also worth noting two other co-founders of the project Raj Gokal, Head of Operations, Product and Finance with huge experience in finance and product management and Alan Yu, co-founder and Head of Strategy, with experience of work in sales and marketing at Google.
In March 2020, the company started cooperating with Chainlink to build a price oracle that can update data in less than half a second (every 400 milliseconds) thus solving a fundamental problem in the decentralized exchange space. The problem is acute. It’s enough to remember how Ethereum’s blockchain became clogged in September 2019 due to an influx of Ethereum-based USDT transactions.