Solana is a blockchain designed to support scalable decentralized applications (DApps). It uses a unique transaction ordering method to improve speed. Users can pay transaction fees and interact with smart contracts using its native cryptocurrency, SOL.
Solana's Proof-of-Stake blockchain, founded in 2017 by Anatoly Yakovenko of Solana Labs, uses a new transaction verification method called Proof-of-History (PoH), allowing the Solana blockchain to process thousands of transactions per second.
Tracking the order of transactions is extremely important for cryptocurrencies. Bitcoin does this by aggregating transactions into blocks with a single timestamp. Each node must check these blocks in coordination with other nodes. This process causes nodes to wait a significant amount of time to confirm the block on the network. With this in mind, Solana took a different approach.
SOL is Solana’s native cryptocurrency, which functions as a utility token. SOL is needed to pay transaction fees when making transfers or interacting with smart contracts. The network burns SOL, implementing its deflationary model. SOL holders can also become validators on the network. Like Ethereum, Solana allows developers to create smart contracts and blockchain-based projects.
SOL uses the SPL protocol, which is the token standard of the Solana blockchain, similar to ERC20 in Ethereum. The SOL token has two main use cases:
- Payment of transaction fees when using the network or smart contracts;
- Token staking as part of the Proof-of-Stake consensus mechanism.
DApps based on Solana are also creating new use cases for SOL. For example, Chainvote is building a DeFi voting application (decentralized finance) for corporate governance using SOL tokens.
In the first two quarters of 2021, the price of Solana increased almost 30 times, making the token popular among investors and speculators.
In August 2021, there were 286,44 million SOL in circulation with a maximum supply of 488,6 million. The most active exchange where this cryptocurrency is exchanged is Binance.
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