How to buy Solana(SOL) Guide

What is Solana (SOL)?

Solana is a rising blockchain that debuted in 2017 and had its mainnet launched in 2020 with the aim to rival Ethereum. It boasts scalability with open source, fast speed, and low cost.

In 2021, Solana saw massive growth in users, dapps, and TVL. Phantom, the most popular Solana wallet, experienced a six-fold increase in the number of active users from 200,000 in August 2021 to 1.2 million in October 2021. The number of registrations for Solana’s hackathon rocketed from 1,000 in October 2020 to 13,000 in May 2021, a whopping 13 times increase. Even more impressive is the rise in TVL: from USD 135.61 million in April 2021 to USD 10.14 billion in October 2021. After only 1 year, Solana climbs to the top 6 biggest blockchain in the world in terms of total value lock (TVL).

It could gain such incredible milestones because the unique Proof of History (PoH) mechanism invented by its founder Anatoly Yakovenko allows for efficient throughput without the need for additional scaling solutions.

How Solana (SOL) Works

Solana is first and foremost a smart contracting platform that supports the development of dapps. During the past couple of years, more than 500 dapps on Solana were developed for DeFi, Web3, and NFT. The goal of Solana’s infrastructure is to eliminate performance bottlenecks, enabling a high level of scalability. That’s why the team decided to use both Proof of Stake (PoS), a proven method of validation that ensures speed and energy efficiency, and the unique Proof of History (PoH).

Solana’s Core Innovation: Proof of History

At the heart of the Solana blockchain is the consensus model known as Proof of History (PoH).

Before PoH, there are two other ways of consensus mechanism - Proof of Work (PoW) and Proof of Stake (PoS). PoW is the original method to reach consensus in blockchain, implemented in Bitcoin and Ethereum. In PoW, members of the network have to solve mathematical puzzles to validate transactions. It is often criticized for being expensive, energy-consuming, and limited scalability. As an attempt to overcome the disadvantages of PoW while maintaining the decentralization of blockchain, PoS was created and is utilized in the majority of blockchains that come after Ethereum such as BNB Chain, Terra, or Avalanche. With PoS, the validators are randomly chosen based on the amount of cryptocurrency they stake in proportion to the total staked amount of the said cryptocurrency.

In Solana’s PoS, the ledger is divided into multiple small sections and validators take turns being the lead validator according to a schedule that is randomly predetermined based on the amount of staked SOL (Solana’s native token) of the validators and the previous transactions. The lead validator at a certain time processes transactions while other validators verify the transactions and vote to confirm them. This improved PoS saves time and increases efficiency.

But with this new PoS mechanism, how can we make sure that all validators have their turns being the lead validator? This is where PoH comes into play.

In a normal hash function, any input is turned into a fixed size output. However, it is very difficult to guess the input based on the output; you practically have to try out all possible options to figure out the input. This is called Pre-image Resistance of PoH. Because of Pre-image Resistance, you can only compute hash k if you know hash k-1. In other words, it is only possible to compute the chain in series one by one. As a result, this allows everyone to trust the order of events and extreme fast verification as validators can verify all hashes in parallel with one another without having to wait for confirmation from others. Therefore, validators of the network can trustlessly exchange leadership by verifying a lead validator’s published transactions.

In conclusion, the use of PoS and PoH in Solana improves block time because event orders are determined in a trustless way and nodes can fairly switch leadership without direct communication.

How Many Solana (SOL) Tokens Are in Circulation?

SOL is the native token of the Solana network and represents a piece of ownership in the ecosystem. The SOL token is used for

(1) facilitating network governance

(2) providing network security via staking

(3) paying network fees

(4) powering dapps

Circulation Supply: 16,350,633 SOL

Current Total Supply: 488,634,933 SOL

Initial Total Supply: 500,000,000 SOL

The initial distribution of SOL tokens is as follows:

• 15.86% to Seed Round investors
  
• 2.63 to Founding Sale investors
  
• 5.07% to Validator Sale investors
  
• 1.84% to Strategic Sale investors
  
• 1.6% to Public Auction Sale investors
  
• 12.5% to team members
  
• 12.5% to the Solana Foundation
  
• 38% to the Community reserve fund (managed by the Solana Foundation)
  
  

How to Buy Solana (SOL)

Consider investing in Solana (SOL)? It only takes 2 minutes to create an account on Bitget and start trading SOL.

Check out the available SO L trading pairs on Bitget!

Futures market

SOLUSDT

Spot market

SOL/USDT

SOL/USDC

Related Solana Pages

Whitepaper

Official Website