Solana : Blockchain for Everyone

What is Solana

Solana is a fast, secure, scalable layer-1 blockchain built for mass adoption, specifically as a high-performance network for finance, NFTs, payments, gaming, and more. Solana operates as a single global state machine that is open, interoperable, and decentralized.

Solana is unique in its architecture with a novel approach of adopting a hybrid consensus model combining Proof-of-History (PoH) with Proof-of-Stake (PoS), processing thousands more transactions per second than Ethereum. This means fees remain low for users with fewer network congestions.

Who founded Solana

Solana is a blockchain platform conceptualized in 2017 by Anatoly Yakovenko with the goal of enabling faster transaction speeds than existing blockchains. Today, the Solana blockchain is developed by Solana Labs and supported by the Solana Foundation.

How does Solana work

Solana uses a hybrid model combining Proof-of-History (PoH) with Proof-of-Stake (PoS) consensus. This model enables high transaction throughput, low latency, and low cost per transaction to achieve rapid finality across the network. This makes Solana ideal for decentralized applications (dApps) that require high performance, such as DeFi protocols, non-fungible token (NFT) marketplaces, and games.

Proof-of-History

The PoH algorithm creates a permanent, unchangeable record of all activity on the network. It works like a clock that stamps the time of every transaction. This helps in improving efficiency by shortening the time spent confirming the order of transactions. With PoS and its Tower Byzantine Fault Tolerance (BFT), the combination makes determining the next set of validators that will add data to the blockchain much easier and quicker when agreeing on the state of the network, keeping the network secure, and verifying transactions.

Low fees

Solana has extremely low fees due to the high throughput and efficiency of the network. On average, transaction fees are less than $0.00025. Low fees can help overcome some of the biggest barriers to Web3 adoption since gas fees on other chains can significantly increase costs for a single transaction which deters users from active usage.

About Solana (SOL) Token

The SOL token is Solana’s native token with an uncapped maximum supply which burns on a unique deflationary emission rate. It is used in the following ways:

• Currency of fees
  Payment for fees when running smart contracts or other transactions like making transfers.

• Staking & rewards
  SOL can be staked to help secure the network and earn rewards as incentives.

• Governance
  SOL also allows holders to vote on governance proposals on decisions and upgrades related to managing the Solana network.

Learn more: Solana Tokenomics

Staking SOL

Staking is locking up your SOL tokens to help validate blockchain transactions for network security. Locked tokens are not liquid and cannot be used for other purposes or transactions until they are unstaked or unbonded. Those who choose to stake can delegate their tokens to validators like Stakewithus and earn rewards as an incentive.

Things to note

• Inflation
  Solana launched with an inflation rate of around 8%, which is expected to decline by 15% each year, a downward trend that will decrease until the rate reaches 1.5% annually, where it will remain. Issuances are anticipated to be sent to validators, with 95% of issued tokens toward validator rewards and 5% reserved for operating expenses.

• Auto-compound
  Rewards earned are auto-compounded and are paid out at the start of every epoch, where an epoch is approximately 2-3 days long.

• Unstaking
  There is a transition state period when tokens are undelegated or unstaked. Such tokens will only be able to be withdrawn at the beginning of a new epoch. Stakers can unstake anytime but will not earn rewards and will be susceptible to slashing during the deactivating cool-down period.

• Risks
  Staking risks apply, which include slashing risk due to underperformance when a validator misbehaves, i.e., from creating invalid transactions or censoring transactions or network participants, unbonding risk, and protocol security risk.

• Non-custodial
  Staking is non-custodial, and you always hold control over your SOL. Validators do not have access to your delegated assets.

More Info: Staking Rewards - Solana

How to stake SOL

There are several ways to stake SOL tokens, primarily on a Web3 wallet, or directly with a validator or their platform.

Phantom Wallet

1. Set up Phantom wallet (if you do not have one), and connect Ledger (if you have one)
2. Click “Start earning SOL”
3. Select a validator (Stakewithus) to delegate tokens to
4. Enter the desired amount of SOL to stake
5. Confirm and approve the transaction

Unagii App

Staking on the Unagii App platform delegates tokens to our Stakewithus validator. Users will earn their share of their rewards based on the number of tokens staked.

1. Connect wallet (Phantom)
2. Go to the Solana page
3. Click “Stake”
4. Enter the desired amount of SOL to stake
5. Select gas option
6. Confirm and approve the transaction

Note: A delegation commission fee is paid to Stakewithus for staking as part of the transaction.

Guide to Solana governance

The Solana Foundation maintains crucial roles in ensuring the smooth functioning of the Solana system. These roles include code upkeep, platform development support, and adoption promotion. The Foundation also participates in governance by proposing and voting on protocol updates and other major decisions.

SOL holders that have staked or delegated their tokens to a validator can participate in governance and vote on proposals on protocol changes and other crucial choices too. Proposals can be drafted, submitted, and voted on through a web-based voting facility.

The Solana ecosystem

The Solana ecosystem is expanding rapidly and attracting projects across DeFi, NFTs, gaming, and other areas where SOL holders now have access to the array of projects built on the Solana network. Like Ethereum, Solana enables developers to execute custom smart contracts and dApps to offer a range of products and services.

Solana’s DeFi ecosystem has hit over $10 billion in Total Value Locked among its various platforms, and some of its leading projects include the following:

• Orca
  Orca is a user-friendly DEX that allows users to trade crypto instantly and cheaply.

• Raydium
  Raydium is an AMM protocol that provides next-level swaps, liquidity, and yield, as well as a launchpad for new Solana projects.

• Magic Eden
  Magic Eden is one of the biggest and most liquid community-centric NFT marketplaces on Solana, where creators can launch and sell their digital collectibles.