By Edward. H, Gate.io Researcher
[Keywords] Solana, PoH, SOL, Public Chain Infrastructure
This year, we have seen a rapid expansion in blockchain since concepts such as DeFi and Game-Fi were proposed and adopted as well as NFT&Metaverse got booming development. In this expansion process, infrastructures in blockchain have played significant roles. Among them, Solana is given as a dark horse, with SOL token increasing 5 times in price just in August. So, what features and advantages does Solana’s blockchain have? And why does it stand out?
Among the basic public chain projects, Solana is a dark horse, with SOL token increasing 5 times in price just in August.
Solana boasts of performance better than those of traditional public chains such as Bitcoin and Ethereum.
What makes Solana unique is its technological innovations such as PoH, Tower BFT and so on.
The essence of the PoH is to "decouple" the time on the blockchain from the state of the block itself, reducing the time required for verification.
All users are welcome to trade SOL at Gate.io.
The Booming of Solana
The year 2018, when nearly 20,000 public chains were generated, witnessed the thriving development of projects concerning public chains. In 2019, however, the related infrastructures got dramatic change, and few of them could continue to grow. In 2020, driven by the concept of DeFi, public chains ushered in another craze in which various projects came into being. Nowadays, when the Ethereum network is experiencing a low upgrade and the major public chains are wildly blooming, we can’t help wondering how the Solana network stands out from the rest of the public chains and makes huge impacts?
Like Bitcoin and Ethereum, Solana is an underlying infrastructure in blockchain and supports smart contracts. Founded in 2017 by Anatoly Yakovenko, a former Qualcomm engineer, along with employees from Intel, Apple, Google, and other high-tech companies, Solana is dedicated to improving performance while ensuring decentralization and security. It has been one of the hottest blockchains in the crypto coin space.
Solana aims to build a decentralized network to match the computational performance of individual nodes, and the most impressive aspect of the project lies in its surprisingly high TPS(Transactions Per Second). Bitcoin can handle 7-15 transactions per second (TPS), and Ethereum can process 20-30 tps. In contrast, Solana, with a new block created every 0.4 seconds, supports 60,000+ tps, far exceeding Bitcoin and Ether, and even surpassing the payments giant Visa’s 1700 tps.
Proof-of-History (PoH) Mechanism
The reason for Solana's outstanding processing capability is its original Proof of History (PoH) mechanism, the technological innovation at the Layer 1 level, which is different from the popular sharding scalability solution. It should be noted that PoH is not a consensus mechanism, but a clock invented by Solana for blockchain.
The consensus algorithm solves the trust problem among the nodes in the blockchain under the decentralized condition, i.e., it proves that a node has the right to pack the transaction data and pass it to the blockchain through a specific algorithm so that nodes can reach a consensus. The common consensus mechanisms are PoW, PoS, and dPoS, etc. Every project has its own algorithm to implement the corresponding consensus protocol, for example, Bitcoin leverages PoW with high security and huge energy consumption, while Solana implements PoS.
Under Bitcoin's PoW mechanism, the node with a bookkeeping right will package the latest transactions into data blocks which then will be distributed to other nodes. When all nodes accept and update the block, the packaged transaction is officially confirmed. Due to the timestamp data in the block, the passage of time on the Bitcoin blockchain is determined by the change of the blockchain state. That means the time will get updated when the block is refreshed. Under this mechanism, the entire blockchain system is like a large Decentralized Clock. Indeed, this mechanism ensures secure transactions but it takes much time to verify the passage of time, and there are problems with scalability.
The essence of the PoH is to "decouple" the time on the blockchain from the state of the block itself and change the fact that each node can’t generate its own local timestamp until updates occur on blocks. Specifically, PoH introduces Verifiable Delay Function (VDF). Each verifier node can compute this function in fast and sequential steps, encoding the "passage of time" in a sequence of outputs of the function to prove that a transaction actually occurred at a specific time.
In November 2017, Anatoly Yakovenko, the creator of Solana, published a Solana whitepaper (Solana: A new architecture for a high performance blockchain v0.8.13), in which how the PoH mechanism works is illustrated in detail.
Solana eliminates the process of confirming status between all blockchain nodes, and the time on the chain is updated in an asynchronous manner. In addition to PoH, it boasts seven technological innovations: Tower BFT, Turbine, Gulf Stream, Sealevel, PipeLine, Cloudbreak, and Archivers. With them, Solana can find another approach to solve scaling problems and obtain powerful processing capability in a more concise and intuitive way.
The Layout of Solana Ecosystem
Solana can support any decentralized application that requires high throughput processing capability and computing power. What’s more, with its great scalability, it enjoys the lightning-fast speed and highly competitive transaction fees, which certainly has an absolute appeal for many projects.
As a result, the Solana ecosystem has grown rapidly and obtained much fame. Currently, there are nearly 400 projects on Solana's blockchain, covering eight major areas such as DeFi, wallets, NFT, infrastructure, decentralized games, and fifteen sub-sectors such as stablecoins, DEX, derivatives and so on. In this ecosystem, there are both Tether, USDc, Chainlink, Terra, and other applications that are already developed maturely in other ecosystems, as well as native applications, on the Solana like Serum, Raydium and Oxygen.
On Solana, there are large numbers of DeFi projects (100+) including DEX, derivatives, Oracle, insurance, prediction market platform(such as Polymarket), stablecoins, IDO platform and other segmentation tracks. The second-largest number is Dapp, whose ecological variety is richly diverse, which shows that Solana has grown from a mere technical public chain to a paradise that can support various mainstream products. In the following content, three promising projects(Serum, Bonfida and Pyth) in the Solana ecosystem will be briefly introduced.
With its white paper released in July last year, Serum is a decentralized exchange (DEX). It is a DeFi protocol launched by Sam Bankman-Fried (SBF), the founder of the FTX exchange. Serum is a complete, non-custodial spot and derivatives exchange running on an on-chain central limit order book (CLOB), which requires fast consensus & efficient network status changes and perfectly fits Solana's advantages. And that is also one of the most advanced features in Serum ecosystem. Serum is committed to giving solutions to expensive trading fees and slow transaction throughput in DeFi projects, and has formed a fairly large ecosystem. Recently, Serum and Solana partnered to hold the DeFi Hackathon.
Bonfida is Serum's “flagship front end” and can provide a better trading experience for Dex. It currently offers functionality in addition to its Serum-based basic trading capabilities, as well as programmatic trading robots, Serum APIs, strategy platform, and the launch of the first perpetual contract on the Solana chain. From the experience, Bonfida does work much better than Serum's native product.
Pyth Network, a cross-chain data oracle built on the Solana blockchain, was created in April by Dave Olsen, president and chief investment officer of Jump Trading Group. It’s dedicated to aggregating off-chain financial data onto the blockchain and making it a great oracle solution for bringing real-world data on-chain and provide infrastructure support for DeFi's growth. The biggest difference between Pyth and the existing oracle is the removal of middlemen. Specifically, while Chainlink focuses on leveraging group intelligence to access data, Pyth tends to take advantage of Solana's high speed and low cost to provide extremely low-latency, high-fidelity data for blockchain and Defi projects in real-time.
Native Token - SOL
Solana's native token, SOL currently has a total supply of over 500 million tokens. It is used to pay transaction fees and for staking and also gives holders the right to vote in future upgrades. Due to the galloping NFTs project and the growth of the GameFi this summer, the SOL price has also climbed rapidly. Currently, its price still remains around $140.
All users are welcome to trade SOL at https://www.gate.tv/cn/trade/SOL_USDT
Author: Edward. H, Gate.io Researcher
*This article represents only the views of the researcher and does not constitute any investment suggestions.
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