What is Solana?

In addition to Proof of History, Solana utilizes a Proof of Stake algorithm which lets users stake tokens to help secure the Solana network. The protocol uses a delegated stake model, which sees users delegating their tokens to established network validators. This is a shared-risk, shared-reward model that incentivizes token holders to have their tokens delegated for long periods of time.

At the same time, the goal of a validator is to get more people to delegate tokens because the delegated stake size determines how often a validator is chosen to write new transactions to the ledger. In addition, similarly to other PoS protocols, Solana employs a slashing mechanism – which removes and destroys tokens from a stake – to penalize malicious behavior, which creates a financial incentive for validators to perform their duties diligently.

Validators also charge delegators with a commission fee, which is calculated as a percentage of rewards earned. This fee is meant to cover the costs validators incur when running and maintaining their systems. And since validators always look to attract more deligators, this encourages them to compete on fees  – naturally, validators who offer lower fees for their services are more attractive.

At the heart of the protocol’s architecture lies the Solana cluster – a set of validators working together to serve client transactions and maintain a ledger. At any given moment, a cluster has a leader, with the role being in rotation among all validators participating in that cluster. The cluster leader is responsible for bundling and timestamping incoming client transactions (which are first received by validators and then relayed to the leader) by utilizing the PoH algorithm. Then the leader pushes them onto the cluster’s ‘data plane’. From there they are validated by the validators and added to the ledger.

For starters, smart contracts in Solana are called programs and are stateless. This means that, unlike Ethereum smart contracts which contain both the program logic and state, Solana programs contain only the logic and are deployed on-chain in a ‘read-only’ mode. Once deployed, the programs can be accessed by external accounts, which contain the data related to program interaction (unlike Ethereum accounts, accounts on Solana can store data). This separation of logic and state informs the specific production flow of Solana dApps.

Every Solana dApp consists of two parts: a blockchain-based program (or set of programs) and a web application through which users can interact with the blockchain code. The blockchain program is deployed directly to a Solana cluster and users can then send instructions to the program via transactions. A single transaction can contain one or several instructions, which are then executed sequentially and atomically. If all instructions are valid, the program is successfully executed. However, if even a single instruction is invalid, the changes made by the transaction are discarded.

Every Solana dApp consists of two parts: a blockchain-based program (or set of programs) and a web application through which users can interact with the blockchain code. The blockchain program is deployed directly to a Solana cluster and users can then send instructions to the program via transactions. A single transaction can contain one or several instructions, which are then executed sequentially and atomically. If all instructions are valid, the program is successfully executed. However, if even a single instruction is invalid, the changes made by the transaction are discarded.

Solana’s impressive performance in terms of transaction throughput and cost effectiveness has allowed the protocol to emerge as one of the most prominent players in the DLT space. The recent boom of Solana-based NFTs and the rise of NFT marketplaces like Solanart has shown that the platform is capable of competing in an area where Ethereum is widely viewed as an undisputed leader. Meanwhile, the spectacular rise of the SOL token this year suggests that there are many who believe that Solana has a bright future.