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What is Solana (SOL)?

Solana (SOL) is one of the largest smart contract platforms. Anatoly Yakovenko gives faces to the Solana project. The year 2022 was challenging for Solana due to technical problems and the collapse of the FTX exchange.

The Proof of History technology is at the heart of Solana. Like its competitors, Solana uses the Proof of Stake consensus algorithm. Firedancer is a Solana client to be released in 2024, which can revolutionize the scaling of smart contract platforms.

Solana is one of the largest DeFi and NFT platforms on the market. Solana offers investors exceptional technology combined with solid growth potential. Solana released its smartphone, Saga, in 2023.

What is Solana (SOL)?

Solana (SOL) is one of the largest smart contract platforms. Solana hit the mainstream in 2021 and has been one of the most popular platforms for DeFi apps and NFTs ever since.

Solana achieves massive transaction capacity using the exceptional Proof of History technology. Proof of History uses time stamps of transactions, enabling them to be processed quickly. Like other smart contract platforms, Solana uses Proof of Stake as a consensus mechanism.

Solana’s native token is also called Solana. It uses the ticker SOL. SOL is used to pay transaction fees in the Solana ecosystem. Since Solana uses Proof of Stake consensus, SOL tokens are also used for staking.

Here is basic information about Solana:

Category Smart-contract platform
Ticker SOL
Max supply No limit
Circulating supply 405M SOL
All-time high (date) $260.06 (Nov 06, 2021)
All-time low (date) $0.5052 (May 11, 2020)

You can see the current price of Solana here: Solana (SOL) price.

Solana was one of the most popular crypto investments in 2021. However, its reputation took a brutal hit at the end of 2022 when Sam Bankman-Fried’s empire collapsed. SBF was a significant supporter of the Solana ecosystem through Alameda Research. Solana lost many investors and suffered a major loss of reputation.

Solana rose from the dead in 2023 and returned to the top 10 list of cryptocurrencies. The SOL token was the best investment of 2023 among large market cap cryptocurrencies.

The history of Solana

Anatoly Yakovenko gives faces to the Solana project. Yakovenko (pictured) was born in Ukraine but moved to the United States in the 1990s.

anatoly yakovenko

Yakovenko graduated from the University of Illinois in 2003 with a Ph.D. in Computer Science. He joined Qualcomm for about 13 years in December 2003. Qualcomm is a US-based technology company that manufactures technology for wireless networks. Yakovenko also worked briefly for Dropbox in 2017.

Solana was launched in the autumn of 2017 when Yakovenko envisioned a decentralized network that synchronized time. In November 2017, he published a whitepaper describing this theory, which Yakovenko called Proof of History. See this YouTube video for a short presentation of this concept.

Yakovenko’s experience at Qualcomm helped him to understand that reliable timestamps would be the key to scaling blockchains. If the synchronization problem could be solved, a network could become lightning-fast and scalable.

Yakovenko’s colleague from Qualcomm, Greg Fitzgerald, also joined early on. Under his guidance, Solana’s code was compiled into the Rust programming language. In the spring of 2018, more colleagues from Qualcomm joined the team. The project was eventually named Loom.

Around the same time, another project called Loom Network also emerged. Since this confused many investors, Yakovenko’s team decided to rebrand. This is how Solana was born. The name comes from Solana Beach near San Diego, where Yakovenko used to surf back in their Qualcomm days.

Solana’s development took off at the end of 2018. Test networks reached hundreds of thousands of transactions per second at best. At the same time, the team also raised money from investors. Solana raised just over $25 million in 2018-2019 through private funding rounds.

Solana also organized a $1.76 million ICO in early 2020. Just moments later, in March 2020, Solana’s MainNet was launched. It still goes by the name MainNet Beta to this day.

Solana Labs in San Francisco is developing the project. The Swiss non-profit Solana Foundation manages it. Founder Anatoly Yakovenko remains Solana’s figurehead.

Solana came to the general public’s attention during the 2021 bull market. The price of the SOL token rose more than 100x during 2021, making Solana one of the top 10 cryptocurrencies.

Solana’s difficult year 2022

The year 2022 was challenging for Solana due to technical problems and the collapse of the FTX exchange. Many have condemned the project as dead, but Solana has proven these analysts wrong.

2021 was a viral period for all cryptocurrency projects. Solana was undoubtedly one of the biggest winners in the entire sector. As seen before, the cryptos with the most gains usually see the biggest downfall, as with Solana.

Solana’s price collapsed more than other leading cryptos for a good reason. Its network experienced technical problems several times, which led to the entire network shutting down. After Solana fixed its technical issues, the FTX exchange collapsed in November 2022.

The collapse of the FTX exchange was a big blow to the entire market, but it hit Solana even more. FTX founder Sam Bankman-Fried had been a big supporter of the Solana ecosystem through his Alameda Research company. Many projects collapsed, and the financing of others was jeopardized. Above all, the incident was a huge reputational loss for Solana.

Several Solana projects transitioned to other smart contract platforms at the end of 2022, and Solana’s DeFi sector also wholly collapsed. Below is a picture of its DeFi liquidity (TVL), close to $10 billion at its peak.

solana defi tvl

At the end of 2022, TVL was just under 300 million dollars, or 97 percent smaller.

Solana’s SOL token also collapsed at the end of 2022. Its price fell to around $8.2 at its worst, representing a nearly 97 percent drop from its 2021 highs. Solana crashed worse than any major cryptocurrency.

Many condemned the Solana project as dead, but this view was premature. Solana has come back to life in 2023 and has even risen to number six in the cryptocurrency rankings. The SOL token has increased by more than 600 percent in price during the year and has been the best investment among the largest cryptocurrencies.

Solana’s Proof of History

The Proof of History technology is at the heart of Solana. This technology enables exceptional capacity compared to alternative blockchains. Solana scales up to 65,000 transactions per second with less than half a second block time and at near-zero cost (one-thousandth of a cent). All this is achieved without Layer 2 or sharding solutions.

Each transaction in the Solana network gets a universal timestamp. This allows network nodes to organize transactions quickly without waiting for confirmation from other validators, making the system fast.

A slot leader is selected from the validators to create blocks. This task lasts for four blocks or 1.6 seconds. Such a fast-switching cycle makes it very difficult for hostile nodes to corrupt the network.

Solana’s nodes use a universal timestamp to know in advance which slot a transaction belongs to, even if it does not see them in chronological order. In addition, the slot leaders can be selected several blocks in advance.

There are also clusters of nodes in the Solana network. This means a set of validators that focus on maintaining, for example, a single application. This solution further speeds up transaction processing.

Solana’s Proof of Stake

Like its competitors, Solana uses the Proof of Stake consensus algorithm. It is often said to be a hybrid of Proof of History and PoS. The symbiosis of these two can be seen in slightly different ways.

Proof of Stake means that a group of validators maintains the network. An alternative to this solution is the Proof of Work used by Bitcoin, which requires physical mining equipment to work.

Solana’s PoS consensus works with the same idea as competing solutions. By staking the SOL token, you become a network validator. There is no minimum requirement, but in practice, your chances of becoming a slot leader (creating blocks) are proportional to the number of staked SOL tokens.

The image below is from Solana has the most value locked in staking after Ethereum.

solana staking

Investors who stake the SOL token are offered an annual return of more than seven percent. Solana’s staking ratio is also one of the highest of all smart contract platforms.

There are currently almost 2,000 validators. The exact statistics are at Due to the demanding technology, the validators of the Solana network have had relatively high maintenance costs until now. The situation will improve significantly with the Firedancer technology.

Firedancer technology

Firedancer is a Solana client to be released in 2024. It can revolutionize the scaling of smart contract platforms. Many believe this is Solana’s most significant update since the MainNet launch in 2020. Next, let’s review Firedancer’s background and potential.

Firedancer is an entirely new Solana client. All validators run client software on the Solana network, and each cryptocurrency has its corresponding client software. Solana’s current client has many technical problems and is not optimized well enough. Firedancer fixes these problems.

solana firedancer

Firedancer has been created from scratch and, in addition, with a new programming language. Every line of code is optimized for best performance. Firedancer clients have already reached over a million transactions per second in the test environment.

Jump Crypto is developing the new Solana client. According to the team, Solana’s scalability will be limited only by the capacity of the servers’ processors and network cables.

Solana has exceptional technology if Firedancer comes even close to its potential in a production environment. Firedancer’s capacity is theoretically 10x-100x higher than the finished Ethereum 2.0 version.

Firedancer technology has been buzzing in the Solana community since summer 2023. Firedancer has been released on Solana’s TestNet, and a MainNet release is planned around spring/summer 2024.

See the introduction of Firedancer in this YouTube video.

DeFi & NFT sectors on the Solana platform

Solana is one of the largest DeFi and NFT platforms on the market. This is despite its DeFi sector liquidity being more than 90 percent below its 2021 peak. However, Solana’s DeFi sector doubled its liquidity during 2023 and climbed back into the top 10 list.

Below is the ranking list of the DeFi platforms ordered by liquidity (TVL).

PlatformNative tokenTVLMarket share
Ethereum ETH $50.3 billion 57.0%
Tron TRX $9.5 billion 10.7%
BNB Chain BNB $5.7 billion 6.3%
Solana SOL $4.6 billion 5.2%
Arbitrum ARB $3.2 billion 3.6%
Blast BLAST $1.3 billion 1.5%
Avalanche AVAX 1.2 billion 1.4%
Base - 1.2 billion 1.3%

During 2023, DEX activity has also started to grow drastically. This means trading volumes in Solana’s decentralized exchanges. So the future looks quite promising!

Solana’s strength has always been the NFT sector. NFT minting is cheap and fast, and Solana has been the biggest NFT platform on the market for a couple of years after Ethereum. In 2023, however, Bitcoin overtook it due to the Ordinals protocol, which enabled NFTs for the first time on the Bitcoin platform.

If you look at the all-time sales volume, the Solana platform has had more NFT trades than its closest competitors combined, to the power of two. The NFT sector will undoubtedly be one of Solana’s strengths in the future as well.

You can find up-to-date data on the NFT market at

The future of Solana

Solana offers investors exceptional technology combined with solid growth potential. It is no wonder it became one of the most popular investments in the crypto market in 2023.

As a project, Solana is fairly new in the crypto market. The SOL token has only been tradable since the summer of 2020, and it has experienced a wild roller coaster ride in its short life. First, Solana rocketed into investors’ consciousness in 2021, after which the project was condemned to death after a 97 percent price crash.

The year 2023 has proven that Solana is by no means a dead project. It has also gotten out of Sam Bankman-Fried’s bad reputation. Solana’s interest among institutional investors has also exploded.

If you want to buy Solana, check out this article: How To Buy Solana. It guides the step-by-step process of buying SOL tokens for a beginner crypto investor.

The Firedancer technology will be Solana’s most important event of 2024. If Firedancer can be finished and put into production use, it can easily make Solana the third-largest cryptocurrency on the market. Solana may even become the first real challenger to Ethereum.

However, Solana is not the only smart contract platform developing scaling technology. The competition is fierce, and Solana is still far behind even its closest competitors in many measures. Solana is a project worth watching in the coming years. Its potential in the smart contract platform sector is undeniable.

The meme coin boom of 2024

Solana has become a viral platform for meme coins in 2024. During the first quarters, investors created thousands of different memes on Solana. Dogwifhat (WIF) is the most popular, and it has grown to a market cap of 4.5 billion dollars.

This popularity also has its downside. Thousands of traders want to exploit arbitrage opportunities created on the volatile meme market. Hence, lots of trading bots have been developed that have clogged the network. The network hasn’t crashed, but about 70% of Solana transactions have failed for a long time.

Solana’s Phone (Saga)

Solana released its smartphone, Saga, in 2023. Saga combines traditional smartphone features with Web3 integrations. It is made of high-quality stainless steel and a ceramic back panel. The phone has metallic green side keys and a triangular titanium camera on the back. Saga looks quite stylish, without a doubt!

Below is a picture of the phone from

solana saga

Technically, Saga is equipped with the following features: it has a 6.67-inch 1080p AMOLED screen with a 120Hz refresh rate, a Qualcomm Snapdragon 8+ Gen1 processor, 12GB of RAM, and 512GB of internal storage. The system comprises a 50-megapixel primary camera and a 12MP ultra-wide-angle camera that produces sharp, colorful images.

Saga is different from a traditional smartphone with Web3 integrations. Its Seed Vault feature provides a secure environment for crypto wallet private keys and is even protected from the Android operating system. This, combined with the dApp Store, makes Saga an exciting option for active users of Web3 apps.

The phone offers accessible functions for transferring cryptocurrencies, NFT trading, and using DApps, but its Web3 ecosystem still needs more offerings. If you want to get to know Saga in more detail, there are unboxing and review videos on YouTube.

Solana Labs has also announced the release of a new model, which will be known as “Chapter 2” for now. It is scheduled for spring 2025.

Antti Hyppänen

Antti Hyppänen is the founder and editor-in-chief of Antti has written articles about cryptos since 2017. He follows the crypto market every day of the year and is responsible for the daily operations of AboutBitcoin. Antti is not a maximalist regarding any cryptocurrency but looks at the industry objectively. Antti’s investment profile is “buy & hold,” i.e., he does not trade or use leverage. His crypto portfolio consists of mainly Bitcoin and Ethereum. Antti also follows macroeconomic events. In addition to cryptos, his interests include gold, silver, and the US stock market.