Solana (SOL) SOL

Solana (SOL) is a high-throughput blockchain built to process many transactions quickly and cheaply on a single network, without relying on separate layer 2 chains. Its native coin, SOL, pays transaction fees and secures the network through staking. Solana is widely used for trading, stablecoin payments, NFTs and memecoins, and it has also been criticised for past outages and a relatively demanding validator setup.

What is Solana?

Solana was founded in 2018 by Anatoly Yakovenko and Raj Gokal, building on a whitepaper by Yakovenko. The first block of the network was produced on 16 March 2020. Development of the protocol is now spread across several organisations, including the Solana Foundation and Anza, a developer of validator software.

How Solana works

Proof of history and proof of stake

Solana secures its ledger with proof of stake: validators lock SOL, and those with more stake are chosen more often to produce blocks. Its original design adds proof of history, a cryptographic clock that orders events before validators vote on them, and a voting system called TowerBFT. The network has run with blocks targeted every 400 milliseconds and, in 2026, began testing shorter slot targets down to 250 milliseconds.

A new consensus protocol, Alpenglow, is being developed to replace proof of history and TowerBFT. Anza expects it to bring finality down to about 150 milliseconds. As of late September 2026, it had not yet been activated on mainnet.

Fees, inflation and staking

Each transaction pays a base fee of 5,000 lamports (0.000005 SOL) per signature, half of which is burned and half paid to the validator, according to the Solana documentation. Users can add a priority fee to be processed faster. There is no maximum supply: new SOL is issued as staking rewards following an inflation schedule designed to start around 8% a year, fall by about 15% each year and settle at a long-term rate of 1.5%. Holders who do not run a validator can delegate their SOL; our page on staking explains the principle.

A short history of Solana

• 16 March 2020: launch of the network (mainnet beta).
• June 2021: Solana Labs raises 314 million dollars in a SOL sale led by Andreessen Horowitz and Polychain Capital.
• 14 September 2021: a surge of transactions takes the network offline for about 17 hours; more outages follow in 2022.
• August 2022: about 8 million dollars are stolen from some 9,000 wallets; the Solana Foundation blames third-party wallet software.
• November 2022: the collapse of FTX and Alameda Research, large SOL holders, hits the ecosystem hard.
• June 2023: the SEC lists SOL among tokens it alleges are securities in its lawsuit against Coinbase; the Solana Foundation disputes this.
• January 2025: the launch of high-profile memecoins on Solana brings a wave of new users.

What Solana is used for

• Trading: decentralised exchanges and aggregators that benefit from low fees and fast confirmation.
• Payments and stablecoins: USDC and other stablecoins circulate widely on Solana; Visa added support for USDC settlement on Solana in 2023.
• DeFi: lending, liquid staking and derivatives, as described in our guide DeFi explained.
• NFTs and memecoins: cheap transactions have made Solana a popular place to create and trade tokens.

What makes Solana different

Solana bets on scaling a single fast chain rather than spreading activity across many layer 2 networks. Applications share one global state, which makes them easy to combine, and fees remain low for simple transactions. The price of this approach is higher hardware requirements for validators and a network that has historically been more prone to congestion and downtime than older chains.

Risks and criticism

The network’s outages, especially in 2021 and 2022, remain a key criticism, even if stability has improved since. Running a validator requires powerful machines and fast connections, which limits who can take part. The ongoing inflation also dilutes holders who do not stake. The wide availability of memecoins also means many tokens on Solana are highly speculative or outright scams. Like any crypto asset, SOL is volatile.

How to store SOL

SOL can be held on an exchange or in a Solana-compatible wallet, many of which let you stake directly from the app. Several hardware wallets support Solana for keeping keys offline. Be cautious with transaction requests from unknown sites: wallet drainers often trick users into signing malicious transactions. Keep your recovery phrase offline and consider self-custody for long-term holdings.