Solana is a highly functional open source project that implements a new, permissionless and high-speed layer-1 blockchain.
Created in 2017 by Anatoly Yakovenko, a former executive at Qualcomm, Solana aims to scale throughput beyond what is typically achieved by popular blockchains while keeping costs low. Solana implements an innovative hybrid consensus model that combines a unique proof-of-history (PoH) algorithm with the lightning-fast synchronization engine, which is a version of proof-of-stake (PoS). Because of this, the Solana network can theoretically process over 710,000 transactions per second (TPS) without any scaling solutions needed.
Solana blockchain was rolled out during the 2017 initial coin offering (ICO) boom. The project’s internal testnet was released in 2018, followed by multiple testnet phases leading to the eventual official launch of the main network in 2020.
What makes Solana unique?
Solana’s ambitious design aims to solve the blockchain trilemma, a concept proposed by Ethereum creator Vitalik Buterin, in its unique way. This trilemma describes a set of three major challenges that developers face when building blockchains: decentralization, security and scalability.
It is widely believed that blockchains are built in such a way that forces developers to sacrifice one of the aspects in favor of the other two, as they can only provide two of the three benefits at any given time.
The Solana blockchain platform has proposed a hybrid consensus mechanism that compromises on decentralization to maximize speed. The innovative combination of PoS and PoH makes Solana a unique project in the blockchain industry.
Generally, blockchains have greater scalability, depending on the number of transactions per second they can support, the more and better they scale. In decentralized blockchains, however, time discrepancies and higher throughput slow them down, meaning that more nodes verifying transactions and timestamps take more time.
In a nutshell, Solana’s design solves this problem by having one leader node chosen based on the PoS mechanism that sequences messages between nodes. Thus, the Solana network benefits, reducing workload that results in increased throughput even without a centralized and exact time source.
Also, Solana creates a chain of transactions by hashing the output of one transaction and using it as the input of the next transaction. This history of transactions gives a name to Solana’s main consensus mechanism: PoH, a concept that allows for greater scalability of the protocol which, in turn, boosts usability.
How does Solana work?
The core component of the Solana protocol is proof-of-history, a sequence of computations that provides a digital record that confirms that an event has occurred on the network at any point in time. It can be presented as a cryptographic clock that gives a timestamp to every transaction on the network, along with a data structure that can be a simple addition of it.
PoH relies on PoS using the Tower Byzantine fault tolerance (BFT) algorithm, an optimized version of the practical Byzantine fault tolerance (pBFT) protocol. Solana uses it to reach a consensus. The Tower BFT keeps the network secure and running and acts as an additional tool to validate transactions.
Moreover, PoH can be considered as a high-frequency Verifiable Delay Function (VDF), a triple function (setup, evaluation, verification) to produce unique and reliable output. VDF maintains order in the network by proving that block producers have waited enough time for the network to move forward.
Solana uses a 256-bit secure hash algorithm (SHA-256), a set of proprietary cryptographic functions that output a 256-bit value. The network periodically samples the number and SHA-256 hashes, providing real-time data according to the set of hashes included on central processing units.
Solana validators can use this sequence of hashes to record a specific piece of data that was created prior to the generation of a specific hash index. The timestamp for transactions is created after this particular piece of data is inserted. To achieve claimed huge numbers of TPS and block creation time, all nodes on the network must have cryptographic clocks to keep track of events rather than waiting for other validators to verify transactions.
The Solana (SOL) token
Solana’s cryptocurrency is SOL. It is Solana’s native and utility token that provides a means of transferring value as well as blockchain security through staking. SOL was launched in March 2020 and has strived to become one of the top 10 cryptocurrencies entering the space by means of total market capitalization.
SOL token operation scheme is similar to that used in the Ethereum blockchain. Even though they function similarly, Solana token holders stake the token in order to validate transactions through the PoS consensus mechanism. Furthermore, the Solana token is used to receive rewards and pay transaction fees while also SOL enabling users to participate in governance.
Answering the question of how many Solana coins are there, there will be more than 500 million tokens released in circulation with the current total supply of Solana exceeding 511 million tokens — Solana’s circulating supply is just over half that. Around 60% of SOL tokens are controlled by Solana’s founders and the Solana Foundation, with only 38% reserved for the community.
If you would like to know where to buy Solana, SOL tokens can be purchased on most exchanges. The top cryptocurrency exchanges for trading in Solana are Binance, Coinbase, KuCoin, Huobi, FTX and others.
Solana vs. Ethereum
Solana has received a lot of accolades for its speed and performance and has even been cited as a legitimate competitor of crypto industry leaders such as Ethereum.
So, how is Solana different from Ethereum and can it be considered as a potential Ethereum killer?
In terms of processing speed, Solana is able to challenge the dominant smart contract platform, as it is supposedly capable of reaching a speed of over 50,000 TPS. Solana uses different consensus algorithms to avoid slow transaction confirmation. This feature makes Solana one of the fastest blockchains in the industry to compete with other industries outside of the crypto space.
Compared to this enormous number, the current low scalable Ethereum proof-of-work model can only handle 15 TPS. Thus, Solana is thousands of times faster than Ethereum. Another Solana advantage is the network’s extreme cost-effectiveness, as the project implements new tokenomics for lower fees.
Also, it is worth noting that Solana’s blockchain, while implementing one of the variations of PoS, is more eco-friendly and sustainable. This is in contrast with Ethereum, whose current PoW model requires the use of tremendous computational power.
However, everyone in the crypto community is looking forward to the Ethereum upgrade to PoS. A new kind of Ethereum, which is being diligently developed, will consist of an execution layer (previously known as Ethereum 1.0) and a consensus layer (previously Ethereum 2.0). It could greatly increase throughput, improve scalability, lower transaction fees and stop unsustainable power consumption.
The downsides of Solana
If you’re still wondering if Solana is a good investment and whether you should buy it, the answer is still up to you. Despite the visible advantages, Solana has its demerits like any existing crypto project.
First and foremost, although the Solana blockchain can compete with high-end blockchain projects, it is still vulnerable to centralization, as there are not many blockchain validators. Anyone on the network can become a Solana validator but doing so is still difficult because it requires a lot of computing resources.
Along with this, the protocol still labels itself as a beta version of the mainnet, which does not negate the possible presence of bugs and errors.
Despite these issues, Solana is still one of the biggest ecosystems in the crypto industry and seems to be on the right growth path.
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.
# # #
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.
