Solana is taking its own approach to achieve scalability, focusing on achieving speeds that rival centralized systems while being censorship resistant and decentralized in the long run. In this article, we dive into what Solana is and what the future holds for the blockchain.
Introduction
For web3 to become a reality, blockchains need to cater for a wide range of activities. While fast transaction speeds are not a core requirement in every situation, it is for things such as payment networks, gaming and trading. There is a real need for blockchains that can achieve speeds similar to that of existing networks or to quote the founding team at Solana for “decentralized network of nodes to match the performance of a single node”. Solana was created with that understanding in mind and aims to achieve high transaction rates, extremely low fees while maintaining proper security, decentralization and censorship resistance in the long run.
What is Solana?
Background
Solana is an open source, permissionless blockchain maintained by the Solana foundation. It runs on a proof of stake consensus model which has been improved upon by the proof of history concept that was pioneered by Anatoly Yakovenko, who’s one of the co-founders of Solana. The first wave of blockchain networks such as Bitcoin and Ethereum max out at around 15 transactions per second (TPS) in their current state. Proof of history is Anatoly’s solution to the blockchain trilemma, creating a highly scalable decentralized network that’s capable of rivaling the speed of traditional payment networks such as Visa.
Proof of History
Proof of history is based on the concept that having a reliable clock between computers in a network makes synchronization simple and results in high TPS. Validators being able to verify and agree on the order of blocks in a blockchain is the whole basis of a blockchain network but it’s also what makes it slower than alternative network solutions. Proof of history offers a way for validators to keep time in a trustless system. It creates a historical record of events with their timestamps, each validator is able maintain and align their own clock, which helps them to agree on the sequence of events independently. Validators are able to rely on the ledger itself for information and decide if a transaction is valid or not independently. This allows the network to make decisions without the need for validators communication with one another. Only one validator is expected to produce ledger entries at a given time and the leader is rotated amongst the validators to minimize influence of a single validator.
Staking and running a node
The current APY for staking SOL tokens on the network is ~6.8%. Holders can delegate their tokens to any one of the 1,640 validators in the network. Staked tokens will be locked in for the duration of the current epoch, which typically last for 2-3 days. The progress of the current epoch and list of validators can be tracked on Solana Beach.
There is no strict minimum SOL requirement to run a validator but there is a relatively high hardware requirement. To find out more about the hardware requirements to run a node, check out Solana’s official documentation about the topic.
Benefits of Solana?
High speed and low fees
High speed and low fees are perhaps what Solana is most known for. With the ability to hit highs of 65,000 TPS and a theoretical limit of 710,000 TPS in the future, Solana looks to achieve parity with centralized systems.
Currently the chain processes roughly 1,900% of the number of transactions Ethereum does while users only pay a fraction of the fees. At its peak, the network processed over 4,800% of the transactions on Ethereum.
Solana relies on proof of history as the key innovation to solve the blockchain trilemma instead of sharding or relying on Layer-2s. This allows the Solana blockchain to maintain a single global state even as it scales. Projects building on the chain don’t have to worry about liquidity or users being fragmented in the ecosystem, nor do they have to worry about integrating on to Layer-2 solutions.
Energy efficient
Blockchain’s energy consumption is probably the most common Solana is extremely energy efficient, with each transaction roughly consuming less energy than 3 Google searches. The Solana foundation aims to keep the network carbon neutral and seeks to make it as environmentally friendly as possible.
Solana Ecosystem
The size of Solana’s ecosystem is ever growing and extremely impressive, especially since it’s not an Ethereum Virtual Machine (EVM) compatible chain. This means that tooling and dApps built on Solana would have to be built from the ground up and can’t be easily migrated from Ethereum onto Solana. Most alternative L1s opt to be EVM compatible in order to bootstrap developer activity and interest in the initial stages of growth. Solana takes a different approach and hosts numerous hackathons to rapidly increase developer interest and the number of projects building on the chain. The first hackathon in November 2020 attracted over 1,000 applicants and 60+ projects. Four more hackathons have since been completed, each with an increasing number of project submissions and applicants. The fourth hackathon, IGNITION, received almost 6,000 applicants and 568 project submissions.
Beyond attracting significant developer interest, Solana has a large and active user base, clocking in 11.6M unique 30 day active addresses.
Orca is the most popular dApp by number of users with almost 640K users over the last 7 days. In terms of number of transactions, Mango Markets takes the crown with over 314M transactions over the same time period.
Solana’s speed and fees make it an attractive playground for developers interested in building DeFi applications. The chain ranks fifth in terms of total value locked (TVL), with ~$7.51B locked. Its speed allows for a wider range of DeFi applications to be built on top of it, from DEXs that allow for leveraged spot and perpetual trading (Mango Markets) to option yield farming vaults (Katana). Similar to Terra, Solana has launched its own real world payments solution, Solana Pay, that aims to bring blockchain technology to the masses. Payments are done using a QR code and are completed within seconds. Physical retail stores and even ecommerce platforms can integrate Solana Pay and have a direct point of contact with their customers – being able to send NFTs, reward tokens etc.
Gaming and NFTs
Fast transactions are vital for gaming. Millions of microtransactions occur daily in popular games and these transactions typically have to be cheap and instantaneous. This makes Solana a leading candidate for teams looking to build gaming related applications. Some of the most highly anticipated and popular games being built on the chain are Star Atlas, Aurory, Nyan Heroes and Mini Royale: Nations. Justin Kan, co-founder of Twitch, has chosen Solana as the first chain to build a gaming NFT marketplace on. While most games are still in development, the quality of the teams building on Solana is an indicator of the potential it has for gaming related applications.
Besides gaming, Solana has an emerging NFT ecosystem. Magic Eden and Solanart are the most popular Solana native NFT marketplaces. OpenSea, the largest NFT marketplace globally, has launched support for Solana NFTs as well. Solana Monkey Business and Degenerate Ape Academy are the most popular and iconic NFT collections on the chain.
Broader Web3
Solana has gained traction with projects outside of the DeFi and gaming space as well. The high throughput required for streaming services and other commonly used applications on the internet today highlight a need for blockchains like Solana. Audius, a decentralized audio streaming platform, shifted its services from Ethereum to Solana due to the need for faster speeds.
What does the future hold for Solana
The hardware requirements to run a node for Solana is one of its most criticized aspects as it reduces the number of people that can participate as a validator. However, over time the requirements will come down as improvements to Solana are made. On top of that, hardware improves over time as well. What is considered a high requirement today will become easily attainable in the future.
Solana has had instances where the network faced issues, such as having degraded performance to the network being unusable. While not ideal, it’s largely due to how young the network is and how quickly it’s growing. The team constantly works to improve the network and increase its censorship resistance. It’s only a matter of time before Solana reaches the stability of older networks such as Ethereum.
The speed that Solana is able to reach allows for applications to be built and experiments to be run that simply aren’t feasible on other networks. Developers are able to focus on building the best projects possible without the fear of the network being a bottleneck for future growth. The amount of support that the Solana foundation provides for builders make it highly attractive to build on the chain. We’re already seeing multiple teams building AAA games, countless teams building new innovative DeFi protocols and teams bringing popular web2 activities over to web3. This trend likely continues and strengthens in the months and years to come.
Conclusion
Solana is taking its own approach to achieve scalability, focusing on achieving speeds that rival centralized systems while not giving up censorship resistance and decentralization in the long run. Its high throughput network has attracted attention from developers, investors and users alike. Hackathons have created fertile ground for developers to build on Solana and every new application built brings us one step closer to a blockchain powered world. Solana Pay aim’s to bring blockchain to the masses and provide merchants with new ways to interact with their customers. No chain is perfect and Solana has had its fair share of issues but given the amount of projects building on the chain, number of users and commitment from the team to push the boundaries of blockchain technology, it’s certainly a chain worth keeping an eye on.
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Today, Tulip Protocol made the announcement that they have integrated Chainlink Price Feeds in order to better secure their yield aggregating platform that is running on the Solana mainnet. The team had previously stated their intention to integrate Chainlink Price Feeds, and at this point, the connection has been completely put into action. Chainlink is the premier decentralized oracle network in the world, safeguarding tens of billions of dollars in smart contracts. It has diversified its offerings across other blockchains, notably Solana, Fantom, Polygon, BNB Chain, and others.
In a recent blog post, the team behind the Tulip Protocol explained that they had integrated Chainlink to provide users with more confidence that leveraged positions will be liquidated equitably using extremely accurate price data and that the protocol will continue to be completely collateralized at all times.
According to Tomasz Wojewoda, Head of Global Sales at Chainlink Labs:
“We’re pleased that Tulip Protocol has integrated Chainlink Price Feeds on Solana, helping secure its yield aggregation protocol with highly robust, decentralized market data. With the high-throughput performance of Solana and the strong security guarantees of the Chainlink Network, Tulip Protocol is able to empower users with a performant and secure platform.”
Tulip Protocol Seeks To Take Advantage Of Solana
Tulip Protocol brings together lenders who receive a return on their deposits and borrowers who are interested in gaining access to leverage. Users who initiate leverage positions are responsible for maintaining a loan-to-value (LTV) ratio that has been previously established. The Tulip Protocol then uses the asset price data that is provided by Chainlink Price Feeds to verify that this ratio is accurate. If the value of the collateral falls below the threshold that was established by the protocol, then their position will be immediately liquidated to assist in guaranteeing that the lenders will be repaid.
Tulip Protocol intends to capitalize on Solana by giving users the ability to more regularly reinvest their income and grow their assets without having to pay exorbitant amounts of gas expenses. Chainlink oracles can now be natively integrated on Solana, making it possible for Solana-based applications to benefit from enhanced levels of security and transparency. Yesterday, OpenOcean made the announcement that they would be integrating Chainlink Price Feeds in order to help secure the limited order functionality on many chains. These chains include Avalanche, Ethereum, Polygon, Fantom, and BNB Chain.
According to Senx, Co-Founder of Tulip Protocol:
“We’re excited to be using Chainlink Price Feeds on Solana to help secure our yield aggregation platform. By leveraging the most secure and reliable on-chain data available, we’re able to provide our lenders and borrowers with greater assurances that liquidations are based on accurate price data, and the protocol will maintain a healthy loan-to-value ratio through all market conditions.”
Allowing Stakers To Benefit From Higher APYs
Natives of the blockchain as well as newcomers to the technology are beginning to understand that decentralization does not necessarily equate to a secure platform. Given that Web3 services are currently disclosing their susceptibilities to attacks from both within and outside the network, further initiatives should be undertaken to improve the safety of user assets. Fortunately, a growing number of blockchain businesses are beginning to add various levels of security to their services in order to solidify the trust of their existing customers and attract additional investors in the near and distant future.
Tulip Protocol is the very first yield aggregation platform to be built on Solana, and it features auto-compounding vault techniques. The dApp was developed to make use of Solana’s blockchain, which has a low cost and high efficiency, hence enabling the vault techniques to compound frequently. Stakeholders are able to reap the benefits of greater APYs as a result, without the need for active management.
On this week’s episode of “The Market Report,” Cointelegraph’s resident experts discuss the latest updates concerning the recent Solana (SOL) hack.
To kick things off, we broke down the latest news in the markets this week:
Bitcoin realized price bands form key resistance as bulls lose $24K, significant whale activity between $22,000 and $24,800 adds to the complexity of the current spot market setup. Bitcoin (BTC) consolidated lower on Aug. 9 after familiar resistance preserved a multi-month trading range. When will we finally break out of this price range and make the move towards $30K?
Institutions flocking to Ethereum for 7 straight weeks as Merge nears: Report, “Greater clarity” around the Merge has driven institutional inflows into Ethereum products, according to a CoinShares report. Is the ETH merge finally around the corner and will it bring new all time highs to ETH or has the price already been factored into the current price?
Circle freezes blacklisted Tornado Cash smart contract addresses, Crypto data aggregator Dune Analytics said that, on Monday, Circle, the issuer of the USD Coin (USDC) stablecoin, froze over 75,000 USDC worth of funds linked to the 44 Tornado Cash addresses sanctioned by the U.S. Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons (SDN) list. Could this mark the end for Tornado Cash or is there a way they can redeem themselves?
Next up is a new segment called “Quick Crypto Tips,” which aims to give newcomers to the crypto industry quick and easy tips to get the most out of their experience. This week’s tip: Have some funds ready to buy further downturns.
Market expert Marcel Pechman then carefully examines the Bitcoin and Ether (ETH) markets. Are the current market conditions bullish or bearish? What is the outlook for the next few months? Pechman is here to break it down. The experts also go over some markets news to bring you up to date on the latest regarding the top two cryptocurrencies.
After Marcel’s market analysis, our resident experts discuss whether your SOL is safe and the latest updates on the Solana hack. We also discuss why the network has been victim to so many hacks and downtimes. What exactly do these exploits mean for the Solana platform and if you should be worried.
Lastly, we’ve got insights from Cointelegraph Markets Pro, a platform for crypto traders who want to stay one step ahead of the market. The analysts use Cointelegraph Markets Pro to identify two altcoins that stood out this week: Radicle’s RAD and DigiByte’s DGB.
Do you have a question about a coin or topic not covered here? Don’t worry. Join the YouTube chat room, and write your questions there. The person with the most interesting comment or question will be given a 1 month free subscription to markets Pro worth $100!
The Market Report streams live every Tuesday at 12:00 pm ET (4:00 pm UTC), so be sure to head on over to Cointelegraph’s YouTube page and smash those like and subscribe buttons for all our future videos and updates.
Singapore, Singapore , Aug. 09, 2022 (GLOBE NEWSWIRE) — Today, the ZepetoX team (ZTX, ZepetoX.io) announced its foray into the web3 space, sharing its vision to build an open world that empowers creators and communities to build, play and earn.
ZepetoX is the crypto metaverse initiative jointly incubated by ZEPETO – Asia’s largest metaverse platform with over 320 million registered users – alongside leading global blockchain organizations including Jump Crypto.
As the sole blockchain project comprehensively backed by ZEPETO, ZepetoX will have exclusive ties to ZEPETO in terms of IP including technological, design, and content assets as well as bridges to facilitate user onboarding between the two platforms. ZepetoX’s blockchain development efforts will be advised by Jump.
“ZepetoX is our official venture into the blockchain industry. We feel that web3 opportunities should be advanced through a crypto-native approach, which is why we are excited to have Jump as a contributor to developing a new platform that would have exclusive connections to ZEPETO. Overall, we believe that ZepetoX can build the ideal web3 platform to not only bring blockchain to our existing users but also to expand our footprint in the blockchain space through various disruptive initiatives,” said Daewook Kim, CEO of Naver Z – the operating entity of ZEPETO.
“We are excited to support ZepetoX’s efforts aimed at onboarding new audiences into the rapidly growing crypto space. ZEPETO’s expertise and technological know-hows accumulated over the past years from building an immersive social platform will serve as a springboard for ZepetoX,” said Saurabh Sharma, Partner at Jump Crypto.
Building on the Solana network, ZepetoX will offer a web-based 3D open world with varying levels of gamification integrated as well as opportunities for users to monetize via ownership of digital assets and social interaction. Ultimately, ZepetoX aims to empower self-expression through customizable avatars and lands that can be equipped with NFTs from a rich collection of assets created by diverse creators, DAOs, or communities.
“I am thrilled to see IP powerhouses like ZepetoX choosing to build their metaverse on Solana,” said Anatoly Yakovenko, Co-Founder of Solana. “Projects like ZepetoX create new pathways for onboarding millions of users to web3.”
“Our global team brings a depth of crypto native experiences and our goal is to build on the foundation of ZEPETO to spearhead the adoption of blockchain among metaverse users, developers, and creators,” said co-CEO of ZepetoX, Chris Chang.
In the coming months, ZepetoX will launch its first land sale. The lands will be tradable on the ZepetoX marketplace, which will feature a variety of different NFTs as the open world project evolves. Further details on the sale will be available on the ZepetoX website in the coming weeks.
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About ZepetoX: ZepetoX (ZTX) is a web3 company building an immersive content-driven platform for users to create, trade digital assets and enjoy social interaction. Founded in 2022, ZepetoX is the blockchain initiative of ZEPETO, widely regarded as the largest Asia-based metaverse platform boasting over 320 million lifetime users with over 2.5 billion virtual fashion items sold.
