Solana is a layer-1 blockchain designed for high throughput and very low fees. Its native token, SOL, pays for transactions and is staked to secure the network. Solana has become one of the most used chains for trading, payments and meme coins, and it has also had a history of outages that any user should know about. The project's site, solana.com, is the primary reference.
A Short History
Anatoly Yakovenko, a former Qualcomm engineer, described the core idea in a whitepaper published in late 2017. He co-founded Solana Labs with Raj Gokal, and the network's mainnet beta launched on March 16, 2020.
Usage grew quickly in 2021. The collapse of the FTX exchange in November 2022 hit Solana hard, because FTX and its sister firm Alameda Research were major backers and holders of SOL. The price fell sharply and many expected the ecosystem to fade. Activity instead recovered through 2023 and 2024, led by decentralized exchange trading and meme coins.
How Solana Works
Solana combines several design choices to process transactions quickly.
- Proof of History: a cryptographic clock. Validators run a continuous hash sequence that proves the order and passage of time between events. This lets nodes agree on ordering without waiting to talk to each other. It is not a consensus mechanism by itself.
- Proof of Stake: validators stake SOL and vote on blocks. Holders can delegate SOL to a validator and share in the rewards.
- Leader schedule: the network knows in advance which validator will produce blocks in each time slot. Slots last about 400 milliseconds.
- Parallel execution: each transaction declares which accounts it will read and write. Transactions that do not overlap run at the same time across processor cores.
Transactions are usually confirmed within a second or two. Full finality, the point at which a block cannot be reversed, takes longer, on the order of 12 to 13 seconds under the original consensus design.
In 2025, validators voted to approve Alpenglow, a redesign of consensus intended to bring finality down to a fraction of a second. Check Solana's own announcements for its rollout status.
Fees and Token Supply
The base fee is 5,000 lamports per signature, which is 0.000005 SOL. Users can add a priority fee to get ahead when a popular application is busy. Solana uses local fee markets, so congestion in one application raises fees for that application's accounts and not for the whole network.
SOL has no supply cap. New tokens are issued as staking rewards on a fixed schedule: inflation started at 8% a year and falls by 15% each year until it reaches a long-term rate of 1.5%. Half of each base fee is burned, which offsets a small part of that issuance.
The Solana Ecosystem
- Trading: Jupiter is the main DEX aggregator, routing orders across exchanges such as Raydium and Orca.
- Liquid staking: protocols such as Jito and Marinade issue tokens that represent staked SOL.
- Stablecoins and payments: USDC and other stablecoins circulate in large volume because transfers cost a fraction of a cent.
- Meme coins: pump.fun, launched in January 2024, lets anyone create a token in minutes. Almost all of these tokens lose their value quickly, but the trading has produced a large share of network activity.
Reliability History
Solana has halted several times. In September 2021 a flood of bot transactions stopped block production for about 17 hours. There were further outages in 2022. In February 2023 the network was down for close to 19 hours, and on February 6, 2024, a software bug stopped it for about five hours. Incidents are logged on the Solana status page.
Engineering changes since then have targeted the causes. These include the QUIC networking protocol, stake-weighted quality of service and local fee markets. A second, independently written validator client called Firedancer, developed by Jump Crypto, is meant to reduce the chance that a single software bug stops the whole network.
Solana vs Ethereum
- Architecture: Solana does everything on one fast base chain. Ethereum keeps its base layer slower and moves most activity to Layer 2 networks.
- Fees: Solana fees are far lower than Ethereum mainnet fees and comparable to Layer 2 fees.
- Hardware: running a Solana validator needs powerful hardware and a fast connection, which raises the cost of taking part.
- Track record: Ethereum mainnet has not had a full halt of this kind. Solana has.
Risks to Understand
- Outages: another halt is possible, and during one you cannot move funds or manage positions.
- Validator concentration: high hardware costs and stake concentration are recurring concerns.
- Scam tokens: cheap token creation means a constant stream of rug pulls and fake tokens.
- Volatility: SOL fell by more than 90% from its 2021 high to its low after the FTX collapse.
Common Mistakes
Users new to Solana often leave too little SOL in a wallet to cover fees and the small rent deposit that new token accounts require. Others buy a token with the right name but the wrong mint address. Always confirm the address from an official source. Staked SOL also has an unstaking delay of roughly two to three days, which matters if you need to sell quickly.
Nothing in this article is financial advice.
Key Solana Facts
- Mainnet beta launch: March 16, 2020
- Founder: Anatoly Yakovenko
- Consensus: Proof of Stake with Proof of History
- Slot time: about 400 milliseconds
- Base fee: 0.000005 SOL per signature
- Supply: no cap, inflation declining toward 1.5% a year
Track on CoinMarketGuy
The Solana price page shows the live SOL price, market cap, supply and chart. For tokens that trade on Solana, the DEX page lists active pools with volume and liquidity, and the trending page shows which coins are being searched most.