What is Solana?

Who created Solana?

The programmer Anatoly Yakovenko described the idea behind Solana in a whitepaper in 2017. He founded the company Solana Labs with Raj Gokal, and the network went live on 16 March 2020.

The Solana Foundation, a non-profit based in Zug, Switzerland, supports the network's development. The software is open source, and more than one independent team now writes the software that runs the network.

What is Solana used for?

Solana is a layer 1Layer 1The base network itself, such as Bitcoin or Ethereum, which records transactions and settles them for good on its own blockchain., like Ethereum. It runs smart contractsSmart contractA program that runs on a blockchain and automatically carries out what it was written to do once certain conditions are met. and apps that anyone can use. Its speed and low fees have made it popular wherever many small transactions matter.

• Payments and stablecoins. StablecoinsStablecoinA cryptocurrency designed to keep a steady price, usually by tracking the US dollar or another currency. such as USDCUSDCA stablecoin issued by the US company Circle that tracks the US dollar, so one USDC should always be worth about one dollar. are widely used on Solana. In September 2023 Visa began settling payments with partners in USDC on Solana, and in May 2024 PayPal made its stablecoin, PYUSD, available on the network.
• DeFi. In DeFiDeFi (decentralised finance)Financial services, such as lending, saving and trading, that run on smart contracts on a blockchain instead of through a bank or other middleman. apps on Solana, people swap cryptocurrencies on decentralised exchangesDecentralised exchange (DEX)An exchange run by smart contracts, where people swap crypto straight from their own wallets with no company in the middle., lend and borrow without a bank.
• NFTs and memecoins. Because creating tokens is cheap, Solana has become a popular home for NFTsNFT (non-fungible token)A unique token on a blockchain that records who owns a specific item, such as a piece of digital art, a ticket or an item in a game. and memecoinsMemecoinA cryptocurrency born from an internet joke or meme, usually with little or no practical use, whose price rests almost entirely on hype., which are among the riskiest cryptocurrencies.
• Tokenisation. Financial firms use Solana for tokenisedTokenisation (RWA)When an asset outside the blockchain, such as a government bond, gold or property, is issued as a token that can be held and sent on a blockchain. securities. In March 2025, for example, BlackRock's tokenised money market fund, BUIDL, became available on Solana.

How does Solana work?

Consensus and proof of history

Solana uses proof of stakeProof of stakeA consensus method where crypto is locked up as a stake for the right to create blocks, and anyone who cheats can lose part of that stake.. ValidatorsValidatorA participant on a proof-of-stake network who locks up their own crypto as a stake to create and check blocks in return for rewards. stake SOL and take turns producing blocks. The more SOL a validator has behind it, the more often it gets to produce a block.

Solana's distinctive feature from the start has been proof of history. It is a chain of calculations that proves the order in which events happened and how much time passed between them. Think of a postmark: it proves when a letter was posted, without anyone having to watch. As a result, validators don't need to exchange as many messages to agree on the order of transactions.

Solana is now reaching the biggest change to its consensus mechanismConsensus mechanismThe rules that let thousands of computers agree on a single version of a blockchain without trusting any one party. since launch. Validators approved the Alpenglow upgrade in a vote in September 2025, and it is due to take effect on the main network on 21 October 2026. Alpenglow replaces Tower BFT, the voting system the network has used since the beginning, and proof of history then stops playing a role in consensus. According to Anza, which is building the upgrade, the time until a transaction is final drops from several seconds to about 150 milliseconds.

Speed and fees

A new block is added roughly every 0.4 seconds. The base fee is 0.000005 SOL per signature. When the network is busy, users can add a priority fee to get in sooner.

Half of the base fee is burned, while the other half and the whole priority fee go to the validator. Network feesNetwork feeA fee paid to a crypto network, not to a bank or company, for including your transaction in a block. on Solana are therefore usually very low.

SOL supply

Unlike bitcoin, SOL has no maximum supplyMaximum supplyThe largest number of units of a cryptocurrency that can ever exist under its rules, such as 21 million for bitcoin.. New SOL is issued every year as a reward for those who secure the network. Issuance started at 8% of supply a year, and the rate falls by 15% each year, from 8% to 6.8% and so on. Once it reaches 1.5%, it stays there for good.

Half of all base fees is burned, as mentioned above. These rules are the core of SOL's TokenomicsTokenomicsThe rules for a cryptocurrency's or token's supply, issuance and distribution, and what it is used for..

Staking

StakingStakingLocking up crypto on a proof-of-stake network to help confirm transactions, in return for rewards paid in the same crypto. on Solana works by SOL holders delegating SOL to a validator and receiving a share of the rewards. The rewards depend on the issuance rate, how much SOL is staked in total, and the validator's commission and performance.

So far, Solana has no built-in penalty that takes part of the stake, known as SlashingSlashingA penalty on proof-of-stake networks. A validator that breaks the rules loses part of its stake and is removed from the network.. There is also liquid stakingLiquid stakingStaking where you receive a token as a receipt for your stake. The token can be sold or used while the crypto itself stays locked., where people receive a token in return for staked SOL that they can use elsewhere. That adds the risk of bugs in smart contracts.

What are the risks?

• Outages. The Solana network has stopped completely several times. In September 2021 it was down for about 17 hours, and most of the outages happened in 2022. The most recent halt lasted about five hours on 6 February 2024 and was caused by a software bug; there has been no full outage since. In December 2025 a second, independent validator client, Firedancer from Jump Crypto, went live to reduce the chance that one bug halts the whole network.
• Concentration. Validators need powerful, expensive hardware. Critics argue that this limits who can take part and concentrates power in fewer hands.
• Price swings. Between November 2021 and December 2022, the price of SOL fell by more than 95%. Its volatility is high, in both directions.
• Competition. Solana competes with Ethereum, layer 2 networks and other layer 1s for users and developers.

SOL on Myntkaup

On Myntkaup you can buy, sell and hold SOL. You can also deposit and withdraw SOL on-chain, on the Solana network.

When SOL is sent, the recipient must also be using the Solana network. Crypto sent on the wrong networkBlockchain networkThe blockchain a cryptocurrency or token is recorded and sent on, such as the Bitcoin network or the Ethereum network. can be lost, as the article How to send crypto to another wallet explains. You can see the price of SOL on the SOL price page.

Closing thoughts

Solana is a fast, low-cost blockchain that payment companies, developers and ordinary users have adopted for payments, DeFi and tokens. SOL is the network's fuel: it pays the network fees and secures the network through staking.

The network has become more stable since the outages of earlier years, and Alpenglow is meant to make it faster still. The price of SOL still swings a lot, though, so learn about the risks before you buy.