What is Solana?

If you know anything about crypto, you’ve probably heard of Ethereum, and that’s no surprise. It pioneered smart contracts and dApps, making it the foundational blockchain network for DeFi (decentralized finance), NFTs, and more.

Popularity aside, Ethereum’s architecture prioritizes decentralization and security at the cost of scalability. The result? The more users on the network, the slower and more expensive its transactions become.

This is a manifestation of the blockchain trilemma; the difficulty of achieving speed, security, and decentralization simultaneously on any blockchain platform. Most blockchain networks must sacrifice one to optimize the others, and Ethereum is no exception. 

To truly support the next generation of blockchain apps, networks must find a way to evolve beyond these constraints.

One network tackling these issues head-on is Solana. Though it began as an alternative to Ethereum, it has since surpassed it in daily transaction volume and active users, establishing itself as a respected network in its own right. In short, it aims to provide a fast and efficient foundation for blockchain apps to thrive.

Let’s see how it works:

What is the Solana Blockchain?

Solana was founded by Anatoly Yakovenko and entrepreneur Raj Gokal, proposed in 2017 and officially launched in 2020 by Solana Labs and the non-profit Solana Foundation. Solana was designed to support decentralized and scalable applications with its fast and low-cost transactions as a high-performance smart contract platform. 

Today, it stands as a respected network in its own right, boasting a thriving ecosystem of platforms across countless decentralized applications (DApps) spanning decentralized finance (DeFi), non-fungible token (NFT) marketplaces, memecoins, gaming, and many other ecosystems.

What is Solana’s native coin (SOL)

The Solana network is powered by its native coin, SOL. SOL is the coin used for any action in the ecosystem, from paying for services to paying transaction fees to staking Solana in return for rewards. SOL is also divisible into smaller denominations called lamports, named after computer scientist Leslie Lamport. Each Lamport is equivalent to 0.000000001 SOL. 

SOL consistently ranks among the top 10 cryptocurrencies by market capitalization, with some of the best ecosystem tokens available. For up-to-date information, you can check out the current Solana (SOL) price with our indicator. 

To interact with the Solana ecosystem, you’ll need a Solana wallet to securely store and manage your assets. To learn more about the best solana wallets for you, check out our complete Solana wallet guide here!

Staking Solana

Since Solana uses a variation of the proof-of-stake mechanism, you can also stake your SOL to earn rewards. You have a couple of choices too: either you can become a validator yourself or delegate your SOL to an existing validator who will process transactions for you. In return for staking and validating transactions, the network rewards validators.

But of course, it can also punish them, removing any rewards validators have accrued for bad behavior. This mechanism, known as slashing,  guarantees participants have the network’s best intentions in mind: validators are incentivized by lucrative rewards and punished for acting against the network’s best interests.  

How does Solana work?

Solana owes its super-fast and cheap transactions to its unique method of tackling consensus. To explain, Solana uses a combination of delegated proof-of-stake (an existing consensus mechanism) and Proof-of History (POH), an invention of its own. 

Let’s see how each of these mechanisms helps Solana operate:

Delegated Proof of Stake

Delegated proof of stake (dpos) is a variant of the proof-of-stake mechanism. Like traditional Proof of Stake, it relies on validators who lock up an amount of Solana as collateral, also called staking. This is in contrast with proof-of-work networks like Bitcoin, which rely on miners who solve complex computational problems. Using a staking mechanism allows Solana to process transactions in a more energy-efficient and environmentally friendly manner than its proof-of-work counterparts.

Where delegated proof of stake differs from traditional proof of stake is that it also introduces a voting mechanism. This makes the process of verifying transactions more democratic, stopping validators from gaining too much influence over the system.

Proof of History (PoH)

Proof-of-history (PoH) is a unique consensus mechanism originally proposed in Solana’s whitepaper. In short, it introduces a timestamp for transactions. To explain how it works, let’s imagine a sprint race. Like any race, each runner in the race receives a final timestamp at the exact moment they cross the finish line. In this example, PoH is like a stopwatch: it records the timestamps of transactions, allowing them to be processed in order.

In both PoW and traditional PoS networks, validators can pick and choose whichever transactions offer the highest rewards. On the Solana network, this isn’t possible, making the system fairer and faster. Solana also uses Tower BFT (Byzantine Fault Tolerance), which leverages PoH to help validator nodes reach consensus across this distributed system faster than traditional methods.Thanks to its fair mechanism of choosing validators and method of ensuring transactions are executed in order, Solana is capable of processing a lot more transactions than its competitors.

While its whitepaper boasts a TPS of 50,000, practically, it handles a lot less. Despite that, Solana processes an average of 300-1,000 TPS, outperforming most EVM chains including Polygon. For a detailed performance comparison, read our Solana vs Ethereum guide.

Developer-Friendly Infrastructure

Solana attracts developers by supporting smart contracts written in Rust, a programming language known for its performance and memory safety. This makes it easier for developers to build secure and efficient decentralized applications on the blockchain platform.

Applications of Solana

Solana’s speed and low cost have made it a hub for builders and users across multiple sectors:

Decentralized Finance (DeFi)

Solana hosts a thriving DeFi ecosystem where users can swap tokens, lend assets, and earn yield with fees under a cent. The network is the second-largest blockchain for fiat-pegged stablecoins like USDC, processing billions in daily volume across platforms like Jupiter, Raydium, and Kamino Finance.

Memecoins, Gaming, and Digital Culture

Solana has become the epicenter of onchain culture. NFTs thrive thanks to low minting costs, often fractions of a dollar compared to Ethereum’s expensive gas fees, with leading marketplaces like Magic Eden and Tensor attracting creators and collectors. 

Gaming developers leverage Solana’s real-time, low-latency infrastructure for move-to-earn fitness apps and fully onchain games that traditional blockchains can’t support. 

The network has also emerged as the dominant platform for memecoins and community tokens, with platforms like Pump.fun enabling anyone to launch tokens instantly, driving both innovation and speculation that defines modern crypto culture.

Decentralized Physical Infrastructure (DePIN)

One of Solana’s most innovative use cases is DePIN, (Decentralized Physical Infrastructure Networks) – a model where blockchain technology is used to incentivize individuals to build and maintain real-world physical infrastructure. 

Solana’s speed and low costs make it a natural home for these projects. Rather than relying on centralized companies to deploy hardware, DePIN projects reward everyday participants with tokens for contributing resources like wireless coverage, storage, or data. 

Helium, for example, migrated its decentralized wireless network to Solana, enabling users to earn tokens for providing 5G coverage, while Hivemapper rewards drivers with crypto for contributing street-level imagery to its decentralized mapping network.

Hivemapper uses Solana to power its decentralized mapping network, rewarding drivers with crypto for contributing street-level imagery. Want to build your own project? Check our Solana token creator guide to get started minting your own tokens.

Solana: What Does The Future Hold?

Solana tackles some of the biggest issues blockchains struggle with today: speed, security, and scalability. That said, it hasn’t all been smooth sailing for the chain. While the network faced challenges in its early years, experiencing multiple outages between 2021 and early 2024, it has since achieved a remarkable turnaround. 

Since February 2024, Solana has maintained over 16 months of continuous 100% uptime, including during periods of extreme stress such as January 2025, when the network processed a record $39 billion in daily volume and over 200 million transactions without any downtime. This stability is thanks to significant infrastructure upgrades. 

The Firedancer upgrade, launched on mainnet in December 2025, has already been adopted by over 20% of validators and demonstrates the capability to process over 1 million transactions per second in testing environments. Even more exciting, the Alpenglow upgrade is currently rolling out in Q1 2026, promising to reduce transaction finality from 12.8 seconds to just 100-150 milliseconds, a nearly 100x improvement that will make Solana transactions feel as instant as traditional payment systems.

The Bottom Line: Why Solana Matters 

These technical achievements, alongside one of the most enthusiastic communities of developers and users, have solidified Solana’s position in the crypto ecosystem. The network continues to attract institutional interest (learn more on our complete Solana ETFs guide), and its DeFi, gaming, NFTs, memecoins and other cultural and community-based ecosystems are thriving with improved reliability and performance.

Ledger Wallet™, the all-in-one crypto app, offers full native integration for SOL and all SPL tokens — so you can manage your assets, stake SOL, swap tokens, and interact with Solana dApps all in one place. Secure it all with a Ledger signer, keeping your private keys protected while you explore everything the Solana ecosystem has to offer with the benefit of true self-custody.So what are you waiting for? Ledger provides some of the best Solana wallets to fit any lifestyle — start your Solana journey today, with security you can trust.