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Solana is a blockchain network engineered to deliver fast transaction speeds at low costs. Like Ethereum, its infrastructure supports a wide range of decentralized applications (dApps), including decentralized finance (DeFi) platforms for trading and lending, non-fungible token (NFT) marketplaces, and blockchain-based games. Solana also has its own native cryptocurrency called SOL.
Below we take a closer look at what Solana is, how it works, its advantages and disadvantages, and how it compares to competitors like Ethereum.
Key Points
- Solana is a high-speed, low-cost blockchain designed for decentralized applications (dApps) and smart contracts.
- It uses a hybrid proof-of-history (PoH) and proof-of-stake (PoS) model to achieve high throughput.
- SOL, the native cryptocurrency, is used for transaction fees, staking, and governance.
- Despite its strengths, Solana has faced challenges including network outages and concerns about centralization.
What Is Solana?
Solana is a high-performance blockchain created in 2017 by software engineer Anatoly Yakovenko. The project aimed to solve a core challenge in blockchain technology: how to dramatically increase blockchain throughput — meaning the number of transactions per second — without sacrificing security or decentralization.
Many earlier blockchains become congested during periods of high demand, resulting in slow transaction times and high fees. Solana addresses these issues by combining several innovations — most notably proof-of-history (PoH) — to process data more efficiently and scale to thousands of transactions per second.
What Makes the Solana Blockchain Different?
Blockchains typically must balance three goals: decentralization, security, and scalability, known as the blockchain trilemma.[1] Improving one often requires sacrificing another. Solana attempts to overcome this trade-off with a design that keeps fee low, maintains strong security, and offers extremely high throughput.
By restructuring how validators communicate and process data, Solana eliminates many performance bottlenecks that slow down other networks.
How Does Solana Work? A Look at the Core Technology
Solana relies on a combination of innovative techniques that streamline how data is processed across the network.
Proof-of-History (PoH): Solana’s Key Innovation
Proof-of-history (PoH) is a cryptographic timestamping system that functions like a built-in blockchain clock. It creates a verifiable record of when events occur.
In most blockchains, validators must repeatedly communicate to agree on the correct order of transactions, which consumes time and network bandwidth. PoH solves this by giving validators a pre-established order of events. Instead of communicating continuously, they reference the PoH ledger, dramatically reducing communication needs.
PoH works alongside proof of stake (PoS), which secures the network. Validators stake SOL and earn rewards for honest behavior, while fraudulent activity can result in slashing (loss of staked SOL).
By ordering transactions before they enter the consensus process, PoH allows PoS to work significantly faster.
Other Technologies That Make Solana Fast
Solana incorporates several other architectural tools, including:
- Sealevel (parallel processing): Unlike most traditional blockchains that process transactions sequentially, Sealevel allows multiple smart contracts (digital self-executing agreements) to run simultaneously, significantly boosting transaction time.
- Gulf Stream (transaction forwarding): This feature forwards transactions to validators before they are fully confirmed, giving them a head start on processing. This minimizes the need for a “mempool” (a holding area for pending transactions) and helps to streamline the flow of data across the network.
- Turbine (block propagation): Turbine is a protocol that breaks large blocks into smaller units called “shreds,” making it easier and faster to transmit information between validators. This efficient data flow allows Solana to maintain high transaction speeds.
What Is the Solana (SOL) Coin Used For?
SOL is the native cryptocurrency of the Solana ecosystem and currently ranks in the top ten cryptocurrencies by market capitalization. SOL’s main uses include:
Paying Transaction Fees (Gas Fees)
Every Solana transaction incurs a small fee — commonly referred to as “gas” — paid in SOL. These fees compensate validators for processing transactions. Solana’s fee structure includes:
- Base fee: The mandatory amount paid for each transaction.
- Prioritization fee: An optional fee that can move a transaction ahead of others in the queue.[2]
Staking to Secure the Network
SOL is also central to Solana’s proof-of-stake system. Users can delegate their SOL to validators, who process transactions and secure the network. Validators early newly created SOL as rewards, and delegators receive a share of those rewards, proportional to their stake.[2]
Governance and Voting
Holders of SOL crypto have the right to participate in the governance of the Solana network, voting on proposals that shape the network’s development and future upgrades.
Other Uses
SOL is also a major cryptocurrency that can be bought and sold on numerous centralized and decentralized exchanges outside of its own native network operations.
What Are the Pros and Cons of Solana?
Solana comes with both benefits and drawbacks. Here’s a closer look at how they stack up.
Pros: High Speed and Low Costs
Advantages of Solana include:
- Extremely fast: Transactions typically settle in under a second.
- Very low fees: Transaction fees average under $0.01.
- Scalable: Solana is capable of supporting large-scale DeFi, NFT, gaming, and payments ecosystems.
- Energy-efficient: PoH + PoS uses significantly less energy than proof-of-work (PoW) blockchains like Bitcoin.
Cons: Network Outages and Centralization Concerns
Solana also comes with some trade-offs:
- Network outages: Solana has faced periodic network outages, raising concerns about reliability.
- High validator requirements: Solana’s high-performance hardware requirements for validators serves as a barrier to entry, limiting participation.
- Centralization concerns: Solana’s relatively small validator set increases the risk that a few powerful entities could exert undue influence over the network’s performance or censor transactions.
- Competitive pressure: Some newer blockchain competitors can be even faster and cheaper than Solana, though with even more centralized designs.
Recommended: The Pros and Cons of Cryptocurrency
How Does Solana Compare to Ethereum?
Ethereum and Solana are both smart contract platforms, but they represent fundamentally different architectural philosophies. Ethereum prioritizes decentralization, while Solana emphasizes scalability, with some cost to centralization.
Here’s a look at Solana vs. Ethereum in key areas:
| Feature | Solana | Ethereum |
|---|---|---|
| Speed | ~65,000 transactions per second | ~15 transactions per second |
| Fees | Very low | Can spike during high demand |
| Potential staking yield | Generally higher | Typically lower |
| Ecosystem | Rapidly growing; strong in consumer apps & NFTs | Larger ecosystem; more mature tooling |
| Decentralization | More centralized (~3,248 validators[3]) | Less centralized (~996,631 validators[4]) |
Which one is better? There’s no one-size-fits-all winner. Ethereum is often preferred for stability, decentralization, and institutional-grade applications, while Solana stands out for speed, low cost and consumer-friendly use cases. Many developers build on both ecosystems.
How Can You Buy Solana (SOL)?
While the steps vary slightly by platform, buying SOL generally involves:
- Create an account: Choose a reputable exchange or other platform that supports SOL and set up an account.
- Verify your identity: This typically requires submitting a government-issued ID, selfie, and proof of address such as a utility bill.
- Deposit funds: You can generally buy SOL using fiat currency (government-backed money like the U.S. dollar) or other cryptocurrencies.
- Buy SOL: Place a market order (immediate) or limit order (instruction to buy at a specific price or better).
- Choose storage: You can typically leave your newly purchased SOL in a custodial wallet provided by the platform or transfer it to a private (self-custody) software or hardware wallet.
The Takeaway
Solana is a powerful blockchain known for its speed, scalability, and low-cost transactions. It supports smart contacts, decentralized applications, and a growing ecosystem of tools and platforms. Its native cryptocurrency, SOL, can be used for transaction fees, staking, governance, and buying/selling.
While Solana’s hybrid consensus model enables impressive performance, the network has faced challenges including outages and concerns about centralization. Even so, Solana remains a significant player in the blockchain space and continues to attract developers, users, and innovative projects.
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FAQs
How is Solana different from Bitcoin?
Compared to Bitcoin, Solana is a different kind of blockchain designed with different priorities. Bitcoin is primarily a decentralized peer-to-peer electronic payment system that uses a proof-of-work (PoW) consensus mechanism to prioritize security and decentralization above all else. Solana, on the other hand, is a smart contract platform that uses a hybrid proof-of-history (PoH) and proof-of-stake (PoS) model to prioritize speed and scalability, enabling a wider range of applications like decentralized finance (DeFi) and non-fungible tokens (NFTs).
How many Solana (SOL) coins are there?
As of November 2025, there are roughly 550 million SOL in circulation. The supply of SOL is not fixed but is managed through a long-term inflation schedule, which introduces new SOL into circulation over time. Initially, a certain number of tokens were created and distributed, but the total circulating supply changes as new SOL is minted for staking rewards and a portion of transaction fees are burned (removed from circulation). The inflation rate is designed to decrease annually over a set period, aiming for a stable, long-term inflation rate.
What is a “Solana Killer”?
The term “Solana Killer” refers to any newer or emerging blockchain platform that is perceived as a significant threat or superior rival to Solana. These platforms typically aim to surpass Solana in areas like transaction speed, scalability, cost-effectiveness, or decentralization. The term reflects the competitive nature of the blockchain industry, where different projects vie for developer and user adoption by offering technological improvements.
Can Solana overtake Ethereum?
While Solana’s impressive speed and low costs make it a strong competitor, completely overtaking Ethereum is a complex prospect. Ethereum currently has the advantages of a larger, more established ecosystem, greater interest from developers, and a stronger reputation for decentralization and security. Solana’s focus on scalability has given it traction in consumer apps, non-fungible tokens (NFTs), and gaming. However, network outages and centralization concerns remain potential drawbacks. Ultimately, the future may see both blockchains thriving by serving different use cases and developer communities.
Is the Solana blockchain secure?
Solana’s security relies on its unique combination of proof-of-history (PoH) and proof-of-stake (PoS) consensus mechanisms.
- PoS requires validators to stake SOL, incentivizing honest behavior and penalizing fraudulent activity through slashing.
- PoH acts as a verifiable clock, speeding up transaction ordering and making the network more efficient without sacrificing security.
However, the high-performance hardware requirements for validators can lead to a smaller set of nodes compared to competitors, which raises potential concerns about centralization. While the network has demonstrated resilience, it has faced periodic outages, which temporarily impacted its reliability.
Overall, Solana is considered a secure, high-throughput network, but like all blockchains, it is constantly working to enhance its decentralization and stability.
About the author
Samuel Becker
Sam Becker is a freelance writer and journalist based near New York City. He is a native of the Pacific Northwest, and a graduate of Washington State University, and his work has appeared in and on Fortune, CNBC, Time, and more. Read full bio.
Article Sources
- Coinbase. What is the blockchain trilemma?.
- Solana. Transaction Fees.
- CoinLaw. Solana Statistics 2025: Validator Counts, DeFi TVL, and NFT Volumes.
- Beaconcha.in. Network Charts.
Photo credit: iStock/Yaroslav Olieinikov
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