Solana: Past, present and the future
Introduction
God created humans. Humans created tech. In some way, tech resurrected old gods. We are summoning/ creating gods through technology. It satisfies all three criteria of being a god: omnipotence, omniscience, omnipresence. Some revolve around the idea of evolution of mankind and some revolve around making things better for tomorrow. Blockchain technology is one such example of the former, that some way or the other lives by the idea of “for the people, of the people, by the people”
It’s rapidly evolving and as we move closer towards mainstream adoption and overcoming its challenges one step at a time, user-centric innovations stay at the core of it. With its unique approach to bring blockchain to more people, and crafting experiences for a range of end users including power users, new consumers and everyone in between, Solana has established itself as a key player in crypto space in no time.
From the very initial days, when it came out all guns blazing, with an idea to timestamp events and transactions in a distributed setup, to being one of the most robust blockchains, hosting high-end applications, wide range of use cases and a huge community, Solana has come a long way.
In this writeup, we will try to turn back the clock and delve into the origin story of Solana, key innovations, analyze its impact and influence on crypto space and speculate on its future trajectory.
But before I move ahead with this, I tried to find reasons not to write this article somehow and then I asked ChatGPT, “why Solana sucks?” and here’s what I got. Now, I have to keep going.
What is Solana?
If crypto space is of slightest interest to you, then it’s very unlikely you haven’t heard of Solana. But, as per a popular belief in Solana ecosystem, there are no bad questions when it comes to the basics of it.
Solana is a high-performance blockchain network built for mass adoption. With its applications ranging from a variety of use-cases, from finance to NFTs, data infrastructure and consumer use-cases like chatting and gaming, it is designed to enable decentralization and scalability without compromising with security.
Solana: The Origin story
November 2017: The Whitepaper
The origin story of Solana dates back to November 2017. Co-founder of Solana, Antoly Yakavenko came from a telecom background. His previous experience of designing distributed systems at Qualcomm, Mesosphere and Dropbox got him bumped into a new way for computers in a network to agree on the time, even if they don’t trust each other. He named it as Proof of History and published a whitepaper.
He observed that big blockchains like Bitcoin and Ethereum, were peaking at 15 tps while their centralized competitor like Visa was processing a whooping 65,000 transactions per second at its best. Without a reliable clock, it was clear that there was no way blockchain could overcome the bottleneck of speed for mass adoption. In fact, he was so sure that when he solved the problem of syncing time between untrusted networks, he believed that a decade of research into distributed systems would create a network, which would be nothing like what existed back then, but a massive 10,000 times faster.
Early 2018: Birth of Loom
Anatoly started the implementation in good ol’ C language. That was when Anatoly’s old mate from Qualcomm, Greg Fitzgerald, popped up with the idea of giving Rust a shot. He was sure that given Rust’s safety guarantees and speed, it would match up to C without breaking a sweat. Not more than two weeks later, Anatoly had the whole shebang shifted to Rust. He called it the Project Loom.
On 13th of Feb 2018, Greg started implementing an open source version of Anatoly’s whitepaper, which he named Silk, published under LoomProtocol organisation to GitHub. The first official release came out on 28th Feb. Greg demonstrated that more than ten thousand signed transactions can be verified in the blink of the eyes, almost half of a second. Not much after that, another buddy from Qualcomm, Stephen Akridge demonstrated that this throughput can be crazier if they speed things up with the graphic processors.
Anatoly, Greg, Stephen and a trio of three decided to make it official and co-founded a company, originally named Loom. Having something in their balance sheet, they started building things at an electric pace.
Almost at the same frame of time, another project, but on Ethereum, and with the name Loom, started popping up and caused quite a stir and left many confused if they were one and the same. To clear the air, the team decided to switch things up a bit. They settled to name it Solana, a shout out to the sunny days they spent surfing in Solana beach, north of San Diego, during their Qualcomm days.
Mid & Late 2018: Build & Test
In June 2018, the team took their tech to the clouds. By July 19th, they had 50 node public, permissioned testnet up and running, handling bursts of 250,000 transactions per second like it was no big deal. Fast forward to December, they launched v0.10 Pillbox, a permissioned testnet with 150 nodes on Gigabit network, processing 200,000 tps on avg and peaking at bursts of 500,000 tps.
They even added support for on-chain programs written in C, running smoothly in a safe environment called SBF.
Solana in 2019: Road to Revolution
2019 was the year for Solana to buckle up their seatbelts, build their infrastructure and get ready to take off. By July 2019, Solana had raised around $20M in private token sales.
In the first half of 2019, Solana devs launched a bunch of releases, tests and audits to strengthen the network, increasing and experimenting with more optimal ways to shoot the throughput of the system.
Q3 of 2019, other than closing in convincingly on fundraising, would be remembered for launch of first publicly incentivized testnet, Tour De Sol, and first iteration of “No Sharding- The Solana Podcast” which is now renamed as “Validated”
2020: Onto the Mainnet
Solana made some significant moves and leaps in the engineering realm in 2020. As a network and as an open source project. Official soft launch of Solana mainnet had happened by early 2020.
By the end of 1st quarter, they officially initialised mainnet beta with the help of validators across the world. In less than a year, the network processed over 8 billion transactions and assembled over 300 validators worldwide and haven’t stopped building at breakneck speed ever since.
What was new with Solana?
Solana, at its core, was designed to be accessible for mainstream use by maintaining and shaping an architecture, with scalability and efficiency at the centre of it.
Engineering a blockchain for mainstream adoption requires user-friendly experience, and ease of experimentation with the technology. These values give Solana a leading edge of choice over many other major blockchain players.
Those who talk big should walk big. If someone had to go tip-toe with the elephant in the room and stay competitive to bigger chains like Ethereum, there must be some aspects they should aim to be better at.
These were some key innovations made by Solana which set them apart from other blockchains, their USPs, in order to create a decentralised, permissionless network which set them apart from other blockchains.
Proof of History
Consensus algorithm which Solana was built on top of, as described by Anatoly in his whitepaper, was a unique solution to the problem pre-Solana era blockchains faced. Commanding time over a clock.
With POH consensus mechanism, it could boast itself as one of the members of very few elite networks which could show a staggering throughput of over 50,000 tps. This made it about 3800 times faster than Ethereum and 10000 times faster than Bitcoin. This caught the attention of several institutional bodies in possible integration of Solana in several mainstream use cases.
Tower Consensus
On top of POH, Solana implemented a pBFT- like consensus algorithm to ensure agreement on order of transaction. Unlike pBFT, Tower consensus prioritized network speed over exact agreement timing. It helps Solana achieve fast and efficient consensus without sacrificing reliability.
Turbine, Gulfstream and Sealevel
Turbine draws its inspiration from BitTorrent. It optimizes transaction processing by batching them together, by breaking blocks into smaller blocks, reducing the overall number of transactions processed by network and therefore better efficiency.
Gulfstream does more microlevel job to improve network efficiency. It groups transactions into one large transaction.
Sealevel enables a very high level of parallelized transaction processing, designed to scale across SSDs and GPUs.
Pipelining, Cloudbreak and Archivers
Solana used something called pipelining, one of its kind in the blockchain space, to allow transaction validation via TPUs and with GPU parallelization, TPUs could achieve upto 50,000 tps, which came at a lower cost.
Cloudbreak takes the responsibility of handling those bulky transaction memories. It uses a setup with fast SSD drives working together to handle lots of transactions at once.
Archivers are nodes that keep the data safe and decentralized.They use something called Proof of Replication to ensure they’re storing the right data.
Key metrics and milestones
- The Solana blockchain is one of the fastest-growing alternative chains to Ethereum. As of February 2024, Solana boasts of a community of millions. Solana has more than 11.5M active accounts in the ecosystem and it’s growing every moment. In fact, on 1st Feb 2024, Solana hit its all time high daily active addresses for the last 20 months. On this day, Solana recorded 1.02M active users.
- While this article was penned down, Solana held a market cap of over $46 Billion, making it one of the most acceptable chains in the market. Solana has over 3400 validators, including more than 2400 consensus nodes.
- If there is one thing that crypto space owes up to Solana, it’s their solution to tackle the bottleneck of speed. It can handle upto 65,000 tps. And while all good things come at a price, this one comes at an incredibly low gas fee. An average transaction on Solana would cost just a mere $0.00025 per transaction, which goes higher than hundreds of dollars at chains like Ethereum.
- While Decentralized Finance (DeFi) is gaining its traction in the space of finance due to greater inclusion and access to its participants, the TVL in Solana is more than $2.04B, with the number of daily transactions increasing by over 2000% since April 2022.
Numbers have a story and they don’t lie. The extrapolated meaning of those staggering numbers definitely do tell screaming that Solana is well positioned for good times ahead.
Community Dynamics and ecosystem
Well apart from the features and innovations in the crypto space, true strength of a crypto ecosystem lies in the community it thrives upon. Well and truly unbiased, Solana has one of the most vibrant communities ranging from crypto builders, validators to power users and end users.
No blockchain is of any use to be precise if there is nothing built on top of it. Solana has been home to some of the coolest projects built in the blockchain space. As per Electric Capital Developer report of 2023, there are more than 2000 monthly active developers in Solana ecosystem and there were more than 4700 newcomer developers who wrote code in Solana ecosystem, only third to Ethereum and Polygon.
Solana has over 800 active contributors on GitHub. To inculcate active brainstorming and swift execution of ideas and building things that matter, Solana organizes a number of hackathons and developer programs.
The Solana Foundation has been providing grants to developers to support the growth of the Solana ecosystem. In October 2021, the Foundation announced a $100 million grant program to support projects and initiatives building on Solana’s blockchain.
Its DeFi ecosystem is gaining a lot of attraction from many DeFi projects. These projects are offering DeFi based solutions like DEXs, lending protocols, and liquidity pools, and are attracting new users and investors into the Solana ecosystem. Solana is home to a huge number of DAOs that are playing a key role in expanding network activity and driving growth.
Additionally, Solana is also seeing a surge of interest in the NFT ecosystem. Even though once NFT exploded like one crazy thing, traction in the NFT market has now reached a saturation with effective and interested people staying back.
As the crypto sector evolves, many teams and individuals are leading the way with innovative projects. This growth puts an emphasis on developing and sustaining strong projects and their governance structures. If Solana stays consistent with the intentions and effort to maintain the standards as a community, the way is only upwards and onwards.
Challenges for Solana
“With great power, comes great responsibilities.”
Solana has had its fair share of challenges since its inception. Solana will be in the blast radius of major growth and adoption as a result of their strategic advances and chain performance upgrades over the last couple of years.
- Past chain outages however were a thing with Solana. But, this major trouble has significantly been worked on. In fact, they brought it down to a single outage within the last year.
- At one point of time, there was a narrative getting propagated in the crypto space that Solana is one of the most centralized chains. Solana has around 3,000 validator nodes spread across many continents. It has a Nakamoto coefficient of ~30–35, which beats most layer-1 and layer-2 smart contract platforms. It also has two separate validator clients, which reduces its risk of failure and exploitation. Most of the blockchains have only one client implementation. For a matter of fact, they are even launching Firedancer and Sig, two other validator clients to build a more performant network.
- The recent downfall of Sam Bankman-Fried sent shockwaves through the world of cryptocurrency, bringing down not only the $32 billion FTX exchange, but also threatening the foundation of DeFi on Solana. There were speculations that Solana won’t survive this downfall. But, this is long gone a story and Solana still thrives.
What doesn’t kill you, makes you stronger!! - There have been minor security breach related concerns with Solana in the past. As just another entity on the internet, operating in a decentralized manner, Solana has encountered bug attacks, smart contract exploitations, hacking validator nodes and attacks like bringing down portions of the system intermittently. Minimal fees of $0.00025 per transaction meant that it was highly economic to spam the network with millions of requests per second with bots to extract as much value as possible. Regardless, this was a great learning for the team to find the possible loopholes and take predictive measures to safeguard it.
- Another under-discussed challenge with Solana is challenges related to development. The Rust community is still not that huge and even amongst the most avid Rust developers, there has been fuzz around that the language is still to mature further. Regardless, since the last couple of years, support and educational efforts have been far better and the community is more active than ever.
- Since its advent, Solana has been challenging the position of established players in the market like Ethereum and Bitcoin. They have attracted their fair share of investors and developers, bringing even more traction in blockchain space and overall growth of it.
However, this rapid rise to fame also might come at a cost, the cost of overvaluation, leading to bubbles similar to past crypto booms. Solana, being compatible with DeFi applications, marks a possibility of systemic failure, like vulnerability concerns with smart contracts, which could lead to big failures and loss of investor’s funds. - Also, it might come at the cost of widening the gap between those who have powerful systems and fast internet and those who don’t, which contradicts the idea of making finance inclusive to everyone.
However, ghosts of the past haven’t stopped them from moving forward.
No system is built perfectly and challenges will always open the room for improvement.
While it’s true that the Solana ecosystem has faced some challenges recently, it’s important to remember that these issues don’t define the entire ecosystem. Yes, TVL has taken a hit, and the legitimacy of one of its most prominent champions, SBF, has been called into question. But despite these setbacks, there’s still plenty of promise to be found in the stories that came along with resolution of other challenges.
The measures are on spot and finding the right tip of the balance to solve the blockchain trilemma of decentralization, security and scalability, there is a way to go and ways to look forward to.
Impact and influence
Solana turned out to be a solace with its ability to remove complexities that come with layer2 solutions of Ethereum and optimizing it for better speed, cost and extent of decentralization. Solana’s tapping into its potential of generating high throughput at godspeed with extremely extremely low fees was inspirational to a lot of other evolving chains in the ecosystem, giving them ideas to address problems long-solved to bring crypto technology at par with the speed of existing solutions and even better.
The intent of bringing the “now or never” option to build in web3 was one of the most impactful propagations of the thought process that Solana and its community heavily contributed to.
Finance came to be looked upon differently. With an absolute staggering amount of boost in number of DeFi projects built at Solana that received massive engagement, Solana ecosystem was one of the key players in changing the perception we have to look at finance and separate the traditional infrastructure from what’s needed to achieve with the integration of a technology that belongs to people and is trusted by them.
But finance is not the only realm Solana’s influence extends to.
Art & governance are two other niches that are getting reshaped and remodeled to a more people-centric perspective. There are more artists, designers, creatives and developers onboard in crypto ecosystem than ever.
Lisanne Haack, a visual abstract artist from Brazil, known for traditional and digital components to bring her ideas into existence, spoke at Art Basel Miami Beach about the perspectives Solana brought into her artistic side.
“Solana has enabled me to look over the horizon, learn about new technologies faster and more efficiently, using them in my own work. The Solana community (has) welcomed abstract, and fine art in general, in an incredibly genuine way.”
It’s not been more than a year since NFTs were riding on an extreme wave of popularity. NFTs meant wonder for artists. This idea gave artists the consciousness of what it’s like to own their creation, their artistic child and find mediums to monetize it. Biggest names in the world didn’t miss out a chance to acknowledge the power of this technology. This is one of the most crucial chapters in democratization of art. Till date, over 22M NFTs have been minted on Solana and the count keeps on going upwards only.
The decentralized governance model allowed token holders to exercise more power in decision making regarding when, how and what in determining direction of the network. Solana’s blockchain infrastructure allows governance models like these to exist on the networks as DAOs. Token holders can participate in on-chain voting to suggest changes to the protocol such as upgrades, fee adjustments and other new features.
Additionally, Solana has implemented a treasury system that allocates a portion of transaction fees to a decentralized fund. This fund can be used to support community projects, incentivize developers, and fund network upgrades and whatever maintenance might be needed to build a more performant network.
As Solana continues to expand its ecosystem and drive adoption, its influence on the broader crypto market can’t be denied.
Future Trajectory and innovation potential
Though on the right trajectory, Solana still has a long way to go to achieve their purpose. As the future unfolds, continued efforts to make on-chain solutions accessible and inclusive for masses is expected. Last few years have laid a solid foundation for Solana, the stage is now all set and ready for an unseen act of growth and innovation that will lay out standards of excellence. Enterprise, gaming & entertainment, art, payments & finance will be some narratives Solana will be aggressively foraying into.
Solana is looking to launch two new validator client implementations, Firedancer (2024) and Sig. Launch of these two validator clients will set a completely new benchmark for defining speed and scalability and change the blockchain space forever.
DeFi and NFTs have weaved a compelling story of dominance for Solana in the crypto space. The insane volume of decentralized exchanges, NFT trades and stablecoins on Solana have either started to give a critical challenge to Ethereum or overtake it. In the coming years, Solana looks all ready to continue to be a strong contender to meet the consumer demands in the NFT market. In fact, if Solana continues its recent trajectory, it might even end up 2024 with the largest majority of NFT volume.
The bigger picture than all of this is the integrations Solana can bring onto the table, nothing better than AI at this point. We are at a historical pinpoint of time when AI is about to shift the world parabolically and as much true it is for web3, it stands absolutely on spot for AI as well, those who don’t embrace it, would be left behind.
The next big thing in the AI-web3 space is when AI systems come on board and with this, I don’t even mean AGI. These AI systems will also interact with each other and will need a method of transferring money quickly. Solana is absolutely best positioned for it.
Solana’s active ecosystem makes one of the strongest cases to fill in the void of a decentralized skeleton at the edge of hottest narratives like spatial computing, DePin, community-powered 5G & RWA.
In fact, supposedly Solana is best suited at the moment to establish the next web3 social media that can blow up. In Solana breakpoint conference 2021, major decisions were announced to create funding opportunities to make the next big web3 social media on Solana.The first edition of the conference was a major platform to collectively thread together the ideas and possibilities to accelerate the transition of web2 solutions into web3 in integration with interesting concepts like socials, search and metaverse.
Solana pay has received positive acclamations and looks all set to be used at a large scale with great speed.
The bottom line is that possibilities are endless and endless is the number of ways Solana could disrupt the way we perceive the surface and depth of the existing infrastructure. Community is bustling, the ecosystem is greener than ever and it’s the right time to strike while the iron is hot and set the tone for a more decentralized future where Solana can turn out to be the architect of it all.
Bonus:How to get engaged within the Solana ecosystem?
Solana has plenty of roles and offerings which one can take benefit of, by being a part of this rapidly growing ecosystem.
For developers and think-tanks who advocate the idea of decentralization and align with the ideals of Solana, they have launched multiple accelerator and milestone based funding programs like Colosseum cohorts and grants by Solana foundation to inculcate the discussion and execution of ideas that matter.
Information on health and realtime statistics can be found on explorers like Solana Beach.
Solana also keeps offering very convincing incentives to new validators in the network. You can also apply to become a Solana Validator at this page. If you are planning on staking SOL, make sure to go through this beforehand.
Conclusion
Since its exodus, the unstoppable southpaw in the crypto space has been dealing with punches and only punches. It has challenged the status quo and monopoly of biggest players in the market. It had its fair share of challenges through the way and challenges are there to stay. The intent of resolution of the flaws and the commitment to foster an ecosystem around the core ideas of decentralization, speed and scalability is the massive factor that sets Solana apart from other chains.
Good times are here and it’s only going to be better from here onwards. Solana’s journey so far has been remarkable, and it is poised to continue making waves in the crypto world for years.
References
Solana — Speed, Scalability… Security? — Blockchain at Berkley
Solana active users hit all time high- NASDAQ
Number of active addresses on Solana- The Block Co
Proof of History: A clock for Blockchain
Solana and its impact on Web3.0- Coinswitch
Making the case for Solana: Fighting the FUD
