How does the Solana (SOL) blockchain and cryptocurrency work?


The Solana (SOL) blockchain and cryptocurrency is a high-performance, decentralized blockchain and cryptocurrency that enables users to securely and efficiently transact and store digital assets. Solana’s technology is based on innovative consensus algorithms and distributed ledgers, which provide low-latency and high-throughput transactions with low transaction fees. Additionally, Solana allows for programmability and smart contract interoperability, making it suitable for a variety of use cases. In this article, we will explore how the Solana blockchain and cryptocurrency work.





What is Solana?

Solana is a project that develops a scalable blockchain protocol for creating decentralized applications and smart contracts.

Who created Solana and when?

Solana was founded by former Qualcomm employee Anatoly Yakovenko, former BREW developer Greg Fitzgerald, and Eric Williams, Ph.D. in particle physics.

In 2017, Yakovenko published a draft white paper, in which he introduced the Proof-of-History (PoH) blockchain synchronization algorithm. Later, Yakovenko, together with his former Qualcomm colleague Greg Fitzgerald, created a blockchain in the Rust programming language using PoH as an “internal clock”. In February 2018, Yakovenko and Fitzgerald published the official white paper of the project and launched the first internal testnet.

In 2018, Yakovenko and Fitzgerald founded the company now known as Solana Labs. The project team includes former programmers from Google, Microsoft, Qualcomm, Apple, Intel and Dropbox.

The founders of the project called it Loom, but later renamed it Solana to avoid confusion with the second layer solution of the Loom Network. The project is named after Solana Beach, a town thirty minutes from San Diego where Anatoly Yakovenko lives.

From April 2018 to July 2019 the project attracted more than $20 million in venture investments during several private tokensales. In the third quarter of 2020, the public test network of the Tour de SOL project was launched. In March 2020, the beta version of the main network started.

In June 2020, the project created the Solana Foundation, an organization dedicated to growing the Solana ecosystem and the adoption of decentralized technologies. Solana Labs donated 167 million SOL tokens and rights to all intellectual property to the Solana Foundation.

How does Solana work?

Solana strives to ensure that the decentralized network of nodes matches the given characteristics of a single node. To do this, the interaction of nodes must be optimized. Solana solves this problem with eight key technologies.

Proof-of-History Blockchain Synchronization Algorithm

One of the problems of cryptocurrencies is the synchronization of nodes. Synchronization speed affects the throughput of the blockchain. The faster it is, the more transactions per second the network processes. To use time synchronization, you need a clock. Cryptocurrencies have their own clocks and internal time – timestamp. It is not accurate because there is no central clock to check against. Such synchronization is not ideal: if you focus on the timestamp (time stamp), a new block may appear earlier than the previous one.

The Proof-of-History protocol is not a mechanism for reaching consensus, but a way to optimize the time spent to confirm an operation while organizing the order of transactions. It is used in tandem with Proof-of-Stake.

It is a decentralized clock that solves the synchronization problem. Proof-of-History allows you to create a chronological record that proves that an event happened at a specific point in time. PoH stands for High Frequency Verifiable Delay Function (VDF). It requires evaluation of a certain number of successive steps, but produces a unique output that can be publicly verified.

Other blockchains require the communication of validators who must agree that time has passed. Solana requires validators to keep their clocks up by constantly solving VDFs based on the SHA-256 hash function. The selection of a validator is scheduled in advance for the entire epoch, which lasts for thousands of blocks. For the work done, the validator receives a reward.

Proof-of-History keeps the network running smoothly through automatic rotation without the need for validators. PoH also allows Solana to optimize block creation time, block reproduction, throughput, and data storage in the ledger.

What is Solana (SOL)?
Timestamps Proof-of-History. Data: TheTie.
  • SHA-256 closes as quickly as possible, each output serving as the next input.
  • Chain samples are taken, the number of iterations and the state are recorded.

The recorded patterns represent the elapsed time encoded as a verifiable data structure. A chain can also be used to account for events.

  • A message that refers to any pattern is guaranteed to be generated after the pattern is created;
  • Messages can be chained and hashed along with the state, ensuring that the message is created before the next insertion.

This data structure guarantees the exact time and sequence of events.

What is Solana (SOL)?
Writing messages to a Proof-of-History sequence. Data: TheTie.

Tower BFT

Tower BFT is an implementation of the Practical Byzantine Fault Tolerance algorithm (PBFT). To achieve consensus, Tower BFT uses PoH as a clock to reduce computational overhead and latency.


The Turbine transaction transfer protocol solves the blockchain scalability trilemma similar to BitTorrent. Most blockchains have a fixed node bandwidth. An increase in the number of nodes leads to an increase in the time for data transfer to each of them. Turbine solves this problem by transferring data using the protocol UDP. An arbitrarily chosen path is used to transmit each user data packet.

Block creator (leader) splits the block into smaller packets (no larger than 64 KB). For example, for a 128 MB block, the leader creates 2000 64 KB packets and then sends them to different validators. Those forward packets to a new group of validators closest to them (in Solana they are called neighborhood – environment). This allows each environment, which includes 200 nodes, through the third layer network, starting with a new leader, to increase the number of participants to 40,000 validators in approximately 200 milliseconds.

gulf stream

Gulf Stream is a mempool-less transaction transfer protocol, thanks to the early definition of validators. Each Solana validator knows the order in which future leaders will change, so they can route transactions to the expected leader in advance. This allows transactions to be executed in advance and thereby reduce confirmation time, change leaders faster, and reduce memory pressure on validators from the pool of unconfirmed transactions.


The Sealevel Virtual Machine processes transactions in parallel that scale horizontally across GPUs and SSDs. Most other blockchains are single-threaded. Solana supports parallel execution of transactions and signature verification in a single shard. This is possible thanks to the operating system driver technique. scatter-collect (scatter-gather).

Transactions communicate in advance what state they will read and write as they run. Sealevel finds non-overlapping transactions in a block and schedules them for execution. The execution process implements the hardware using native Berkeley Packet Filter (BPF) bytecode.


Pipeline is a Transaction Processing Unit (TPU) used to streamline the validation process. In the process of validating transactions in the Solana blockchain, conveyor optimization method (pipelining). It is effective within a model with a stream of sequentially processed incoming data. Certain hardware equipment is responsible for operations at each stage.

With Pipeline, data is collected at the kernel level, data is verified at the GPU level, banking is at the processor level, and recording is at the kernel level.

When Pipeline sends blocks to validators, it gets access to the next set of packages, verifies their signatures, and starts accruing tokens. The parallel processing principle at the GPU level allows the Solana transaction processor to TPU work with high performance.


Cloudbreak is a horizontally scalable account database. It allows you to optimize parallel reading and writing to SSDs. Each additional drive increases the amount of memory available to on-chain programs and also increases the amount of concurrent reads and writes.

This allows you to prefetch accounts from disk and prepare the environment for transactions. Nodes can start executing transactions before they are encoded into a block. This reduces block mining time and execution delays.


Archivers is a distributed ledger repository. Storing data on a high-performance network requires centralization. If the cost of data storage is high, only highly resourced users can act as validators and participate in the consensus process. In Solana, data is stored not by validators, but by a network of nodes called archivers.

Archivers are not involved in the consensus process. The state history is divided into many fragments and error-correcting codes. Archivers store parts of the state. Solana uses Proofs of Replication (PoRep) technology borrowed from Filecoin. So far, the archivers have not been implemented, but they are provided for by the long-term roadmap of the project.

What is Solana (SOL)?
Solana’s eight key technologies. Data: TheTie.

What consensus mechanism does Solana use?

Tower BFT, a Proof-of-Stake consensus engine, uses Proof-of-History as a clock, reducing bandwidth loss and latency.

When a validator votes for a certain fork, the voting is limited to a fixed period of hashes − slot. The duration of a slot is approximately 400 milliseconds. Every 400 milliseconds a potential restart point is created. Each subsequent vote doubles the amount of time that must elapse before the network can block that vote. Additional voting makes it difficult to reverse transactions that are performed in a particular slot.

Therefore, a block with multiple votes has a great chance of remaining part of the network. For example, each validator voted 32 times in the last 12 seconds. The vote that took place 12 seconds ago has a 2³² slot timeout of approximately 54 years. Accordingly, the network will never cancel this vote.

At the same time, the most recent vote has a timeout of two slots – about 800 milliseconds. As blocks are added to the ledger, the chances of validating old blocks increase. This is because the number of old voting slots doubles every slot.

Finalization occurs after two-thirds of the validators vote for a certain sequence of events. Once finalized, transactions cannot be reversed.

Token holders can participate in the block production process as stakers and validators, and receive rewards for this. They also have the ability to delegate tokens to trusted validators.

There is no minimum staked tokens. The right to choose a leader – a validator offering the next block – depends on the number of tokens in the stake.

What role does the SOL token play in the Solana ecosystem?

SOL is the native utility token of the Solana blockchain. SOL uses SPL is a token standard on the Solana blockchain, similar to the ERC-20 standard on the Ethereum blockchain.

The share of the SOL token is called lampport (lamport), after an American computer scientist Leslie Lamport, whose research laid the foundations for the theory of distributed systems. One lampport is equal to 0.0000000000582 SOL.

There are three scenarios for using SOL:

  • Transaction fees;

Solana’s deflationary model involves burning SOL tokens.

You can store SOL tokens in Sollet.iodeveloped by Serum Academy, in Trust Wallet for mobile devices and in other wallets that support the SPL standard. Some wallets support staking tokens – for example, SolFlare.

How is Solana developing?

In August 2020, a decentralized exchange started working on the Solana blockchain Serum. Serum is using Optimistic Rollup, a second layer solution for Ethereum. With its help, cross-chain swaps and tokenization will be introduced.

In October 2020, the Solana project introduced the Wormhole cross-chain solution, connecting the tokens of the Ethereum and Solana networks.

In May 2021 Solana Foundation launched five funds with total assets of $100 million for the development of applications in China. Huobi, and NGC Ventures, MATH Global Foundation and Hash Key helped her with this.

In the same month, the project raised $60 million from Hacken,, Coin DCX and BRZ. The funds will be received by three funds focused on expanding the ecosystem in Ukraine, India, Brazil and Russia. Funding will be used to support the development of blockchain applications in DeFi, NFT and cybersecurity.

In June 2021, Solana Labs raised $314 million in a private token sale. The round was led by venture capital firms Andreessen Horowitz (a16z) and Polychain Capital, with contributions from Alameda Research, CMS Holdings, CoinShares, Jump Trading, Multicoin Capital, Sino Global Capital and others. Solana Labs will use the raised funds to create a venture division to invest in its own ecosystem and launch a studio for the development of projects based on Solana.

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The Solana (SOL) blockchain and cryptocurrency offer a secure and highly scalable platform with low-cost and fast transactions. The consensus mechanism used by the SOL network is proof-of-stake, making it an energy-efficient blockchain. With its high-speed transactions, low fees, and strong security, SOL has become an attractive choice for many businesses and individuals who want to take advantage of blockchain technology. As the demand for blockchain technology grows, Solana is poised to become a major player in the cryptocurrency market.


How does the Solana (SOL) blockchain and cryptocurrency work?

Solana is a high-performance blockchain protocol that enables decentralized applications (dApps) to scale to thousands of transactions per second. Solana’s consensus protocol is based on the Proof-of-Stake (PoS) consensus mechanism, which is a consensus mechanism that requires users to stake their SOL tokens in order to validate transactions on the network. Validation of transactions is rewarded with additional SOL tokens, which incentivizes users to participate in the network and maintain its security.

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