Solana Labs: A Complete and Hyper-Scalable Layer-1 Blockchain Network

Solana achieves scalability, security, and decentralization, unlike no other blockchain. Solana has already launched on the main net and the ecosystem is rapidly developing

By
Greg Gotsis
on
April 2, 2021
Category:
Project Insight

Introduction

Solana is one of the most powerful layer-1 blockchains with smart contract capabilities. They aim to implement a blockchain that solves the biggest issues seen currently–-scalability, security, and decentralization. Blockchains such as Ethereum face scaling issues while the Binance Smart Chain (BSC) relies on a more centralized Proof-of-Stake Authority (POS-A) network. Solana offers strengths, security and decentralization, but it shines in throughput.

Solana was established in 2017 by Anatoly Yakovenko. Greg Fitzgerald, Yakovenko, Solana’s CTO, and Eric Williams conceptualized and delivered on a network that solved the throughput in traditional blockchains. Solana has experienced rapid growth in development in the past year as DeFi has bolstered more attention.

Key Features

  • Scalable
  • Low Cost
  • Composable


Scalability

Solana boasts a transaction throughput of 50,000 TPS. Solana achieves this through leveraging a distributed system technique referred to as Optimistic Concurrency Control coupled with Proof of History (PoH). This technique is able to achieve 710,000 on a standard gigabyte network. As Solana has applied this technique to the blockchain it can currently only handle about 50,000 TPS. This is 100x’s faster than Ethereum's 20 TPS. Solana also has over 650 global validators which secure the network and promote decentralization


Low Cost

Solana boasts extremely low transaction costs and aims to keep it so. Currently, the chain is charging an average of 0.00005 cents per transaction. As the user base grows there will be no need to worry about fees as the network is designed to support billions of users. Further, Solana will only continue to scale as technology improves.


Composability

Solana is a fully functioning layer-1 blockchain. It boasts decentralization and leading class throughput while also promoting protocol compatibility. The single global state of Solana insures users and projects won’t have to deal with multiple shards or layer-2 systems. Further, anybody can build on Solana using Rust, C, and C++ programming languages.


Solana Infrastructure

Solana innovates in the blockchain space using eight innovations:

For a complete technical breakdown please follow the above links to official Solana documents.


Proof of History

For blockchains to operate effectively, all nodes must come to an agreement on time. Traditionally, this is solved with Bitcoin’s Proof of Work (PoW) algorithm which acts as a decentralized clock. Solana has innovated further, operating on a (PoH) consensus model.

Solana leverages a high-frequency Verifiable Delay Function to create its Proof of History model. 


This function timestamps transactions using the previous output as the next input. In short, this allows all validators to trust the timestamp that is encoded. Through solving the agreement on time using PoH, the Solana blockchain obtains its robust and scalable network


Tower BFT

Tower BFT is a modified implementation of the PBFT system. This innovation utilizes Solana’s PoH system as a cryptographic clock. Tower BFT allows the Solana blockchain to reduce latency and messaging. Validators will vote on the correct version of the ledger which will then be locked. Once a vote is completed a validator can't vote on a version of the ledger that does not show the previous records which were verified. This system allows for efficient, accurate, and secure data to remain on the ledger.


Turbine

This innovation borrows from the BitTorrent model with a few technical differences. The turbine allows the leader to break up blocks into smaller packets. Using smaller packets allows individual validators to verify transactions without the data being too intensive on their bandwidth. 


Gulf Stream

Solana has implemented a cunning edge memepool management solution. A memepool is where all unconfirmed transactions are queued for validators to confirm. Typically, the ETH and BTC mempool hold about 20-100k unconfirmed transactions. On Solana, validators can confirm a memepool size of 100,000 allowing the chain's 50,000 TPS to be confirmed in seconds. Gulf Stream goes a step further, allowing validators to execute and forward transactions before they are completely confirmed.

 

Sealevel

Solana transactions can describe all states of a transaction while simultaneously executing it. This enables tens of thousands of smart contracts to run in parallel. This is a huge innovation as traditional layer-1 blockchains are single-threaded. Chains such as the Binance Smart Chain (BSC), Ethereum, and EOS only allow one contract to modify the blockchain state at a time.


Pipelining

To quickly validate blocks, Solana incorporates pipelining. This is a process where data needs to proceed in a sequence but by a separate unit. For example, the process of laundry requires washing, folding, and drying. Each of this is carried out by separate “hardware” but it is done sequentially.

Through pipelining Solana can keep all hardware running at the same time, efficiently validating and replicating transactions across all nodes. This system has been coined the Transaction Processing Unit (TPU).


Cloudbreak

Cloudbreak allows Solana to scale its network without sharding through using a horizontally scaled state architecture. This software is designed to minimize hardware bottlenecks, as currently many consumer-grade components cant support the data size and speeds required. By utilizing every piece of hardware for indexing data the database reads and writes transaction input at the same time.


Archivers

Archivers represent Solana distributed ledger store for petabytes of blockchain data. Innovating on the File Coins Proof of Replication (PoR) model, the Solana team has built its PoRep version. This allows nodes to replicate information with very little hardware requirements. The use of archivers allows for a secure and efficient store of blockchain data on a distributed and public ledger.


Sol Tokenomics

As displayed above there is currently a circulating supply of 268 million SOL with a total supply just shy of 500M. In Solana economics, the main participants are validation-clients. These users stake SOL and contribute to the network and perform state validation. These participants are rewarded with protocol-based rewards from inflation and transaction fees.

Solana mirrors Proof-of-Stake (PoS) networks using validators. These participants are selected based on the amount of SOL they stake, giving validator spots to the highest stakers. Validators will then earn transaction fees and SOL token emissions in return for maintaining the chain. Users can also delegate their SOL to individual validators to receive a portion of these rewards. To fairly compensate early validators, Solana has implemented an inflation schedule that offers diminishing rewards as the chain matures. The Solana foundation has implemented the following Inflation Schedule parameters:

Solana Foundation proposes the following Inflation Schedule parameters:

  • Initial Inflation Rate: 8%
  • Dis-inflation Rate:  −15%
  • Long-term Inflation Rate: 1.5%
Source

The above chart displays the annual inflation rate in percentage over time. This follows the three-parameter schedule created to provide sustainable and ample rewards for Solana stakes. Overall, the SOL ecosystem has a tokenomics model built to incentive network participants. As the network matures inflation rewards will lessen in the hopes of increased transaction volume and fees. The Solana foundation incorporated this model in hopes of providing ample incentive to validators while keeping the token supply in check.


Concluding Thoughts

Solana aims to innovate on previous blockchains’ weaknesses and strengths. The common issue we see today is that blockchains lack ample throughput or decentralization. While Ethereum boasts decentralization, its throughput is hundreds of times smaller than that of Solana. On the other hand, the BSC boasts a throughput of 50 TPS - still multiples less than Solanas--but they rely on a more centralized PoS-A, 21 validator system. Solana preserves decentralization while simultaneously offering immense throughput.

By incorporating the key features outlined above, Solana achieves scalability, security, and decentralization, unlike no other blockchain. Solana has already launched on the mainnet and boasts 50+ noteworthy projects as the ecosystem is rapidly developing. As more developers adopt the chain and the bull market rages onward we can expect to see further innovation stemming from the Solana project.

For those who wish to learn more about Solana, refer to the following resources:

Website

Twitter

Docs

Medium

Telegram


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Greg Gotsis

Greg (GoonTrades) is BSC News' Chief Editor and is also a writer for the team. Currently enrolled as an economics major, he finds himself as a cryptocurrency researcher, writer, and technical trader.