Solana: how a project that keeps drawing attention actually works

What Solana is

Solana is a layer-1 blockchain built around one central idea: process transactions fast and cheap enough to compete not with other crypto networks, but with centralized financial infrastructure like exchanges and payment processors. Where Ethereum has spent recent years betting on a modular architecture built around rollups sitting on top of a base layer, Solana runs as a single, monolithic network with one shared global state — all execution logic stays on one layer, with no separation between settlement and execution.

History: who built Solana, and when

The idea behind Solana traces back to Anatoly Yakovenko, an engineer who spent nearly 12 years at Qualcomm working on operating systems before moving to Mesosphere and Dropbox. In November 2017 he published a technical description of Proof of History, a cryptographic method for provably ordering events in time without expensive coordination between nodes. A full project whitepaper and the first internal testnet followed in February 2018.

In 2018, Yakovenko and former Qualcomm colleague Greg Fitzgerald founded Solana Labs, the company responsible for building the protocol. Separately, in 2020, the nonprofit Solana Foundation was established in Zug, Switzerland, handling grants, validator support, and network decentralization — functions kept distinct from Labs' commercial development work. Raj Gokal, a former venture investor at General Catalyst, is also credited as a co-founder and serves as Solana Labs' COO.

The network's Mainnet Beta went live on March 16, 2020, following a token auction on CoinList that raised $1.76 million.

One part of the project's history that can't be skipped: one of Solana's biggest public promoters was Sam Bankman-Fried, whose FTX and Alameda Research entities held more than $1 billion in SOL and related assets. After FTX collapsed in November 2022, SOL's price fell more than 70%, dropping to nearly $8 by the end of that year.

The network has also had its share of notable outages — from a September 2021 outage triggered by bot traffic during an IDO token sale to a major five-hour failure in February 2024 that required a coordinated manual restart by validators. The frequency of serious incidents has dropped noticeably since late 2023–2024. A significant step toward resilience came with the launch of Firedancer, an independent validator client built by Jump Crypto in C/C++ rather than the Rust used by the original Agave client — it went fully live on mainnet on December 12, 2025, at the Solana Breakpoint conference.

How it actually works

Decentralization is worth a closer look here. As of 2026, Solana counts roughly 906 active validators, down about a third from a 2023 peak of around 2,560. That decline alongside rising throughput is partly tied to the shift toward Firedancer and broader consolidation — somewhere between a fifth and a quarter of active validators were already running it shortly after launch, depending on the source. Critics read this as growing centralization around larger, more technically capable operators; supporters call it a necessary tradeoff for performance that a larger set of smaller nodes couldn't deliver.

At the core of Solana is Proof of History (PoH). It isn't a consensus mechanism on its own — it's a way to cryptographically prove that a measurable amount of time passed between two events, using sequential hashing that can't be sped up through parallel computation. That solves one of the fundamental problems of distributed systems, agreeing on the order of events, without expensive node-to-node coordination at every step.

After that timestamp is set, transactions move through a Proof of Stake consensus layer — specifically a variant called Tower BFT, tuned to trust PoH's internal clock. Validators and delegators lock up SOL as collateral that secures the network.

Solana's whitepaper claims a theoretical maximum of about 65,000 transactions per second, but that's a ceiling, not a real-world figure. Actual throughput swings widely depending on measurement method and network load: Q1 2026 averaged around 960 TPS across 25.3 billion transactions processed that quarter, climbing to roughly 1,900 TPS by late June 2026, with estimates in high-demand periods ranging from 1,600 to 3,800 TPS. Block time runs around 400 to 430 milliseconds.

Fees are built around a fixed base rate of 5,000 lamports per signature (a lamport is one-billionth of a SOL), with an optional priority fee layered on top during network congestion. Depending on when you measure it, the average transaction fee runs anywhere from a fraction of a cent to a couple of cents.

The ecosystem: what's built on Solana

Solana's ecosystem spans several distinct categories.

In DeFi, the standouts include liquidity aggregator Jupiter, which routes trades across dozens of DEXs for the best price and offers limit orders and leveraged perpetuals; Raydium, one of the network's oldest AMM protocols; and Orca, a user-friendly AMM built around concentrated liquidity. In lending, Kamino Finance became the largest protocol by total value locked by mid-2026, combining a money market with automated vault strategies, alongside MarginFi, a non-custodial cross-margin lending protocol live since mid-2023.

In NFTs, Magic Eden dominates — a marketplace originally built on Solana that later expanded to other chains.

A separate, and arguably the most distinctive, category is DePIN — decentralized physical infrastructure. Wireless network Helium moved its infrastructure from its own blockchain onto Solana in April 2023, one of the largest L1-to-L1 migrations in the industry's history. Distributed GPU rendering network Render Network migrated to Solana in November 2023; since then it has processed roughly 33 million images, consuming around 33,000 GPU-hours.

In gaming, the standout is Star Atlas, an ambitious space MMO built on Unreal Engine 5 with an NFT-based in-game economy — worth noting that as of 2026 the project is still in development rather than fully released.

Who actually uses Solana

This section is about specific, narrow integrations rather than a wholesale move of traditional finance onto a blockchain.

On December 16, 2025, Visa announced USDC settlement on Solana for issuing and acquiring banks in the US, with Cross River Bank and Lead Bank as the first participating banks. It's an extension of an earlier pilot — Visa's total stablecoin settlement volume across all blockchains reached a $3.5 billion annualized run rate by the end of November 2025. Worth being precise here: this is settlement between Visa and partner banks using USDC, not a shift of consumer card payments onto a blockchain — the cardholder experience doesn't change.

On August 23, 2023, Solana Pay became available as an approved integration for merchants on Shopify through partner Helio, letting sellers accept payment in USD-pegged stablecoins on Solana.

At Consensus 2024, PayPal announced its PYUSD stablecoin was launching on Solana, roughly a year after its Ethereum debut, claiming a transaction-cost reduction of more than 90% compared to the Ethereum version.

Stripe announced stablecoin payment support in April 2024, then in October that year restored crypto payments for US businesses for the first time since 2018 — supporting USDC on Ethereum, Solana, and Polygon at a flat 1.5% fee.

Finally, USDC from Circle remains the dominant stablecoin on the network: total stablecoin market cap on Solana stood at around $15.05 billion as of July 1, 2026.

What people actually say about it

Solana founder Anatoly Yakovenko described the project's philosophy this way on the All-In podcast, in an episode from around September 18, 2025:

“…this new technology stack built on top of the Internet that's completely Western-aligned. It's for transparency, it's for capitalism.”

— Anatoly Yakovenko, Solana co-founder, All-In podcast

In earlier public remarks, he framed Solana's ambitions through a comparison to the speed of light: the network's literal goal, in his words, is to move transactions as fast as news travels around the world over fiber, and he's named the network's real competitors not as other blockchains but as exchanges like NASDAQ and the New York Stock Exchange.

The SOL token

SOL is the network's native token, used to pay transaction fees, to stake — securing the network through Proof of Stake, with rewards for validators and delegators — and, on a limited basis, to vote on certain network parameters.

Unlike bitcoin, SOL has no maximum supply cap. Circulating supply sits at roughly 582.9 million tokens against a total supply of about 632.4 million. The inflation schedule started at 8% annually and decreases by 15% each year until it reaches a long-term terminal rate of 1.5% annually; part of the base transaction fee is burned, partially offsetting new issuance.

As of this writing, SOL traded around $76 with a market cap of roughly $44.3 billion, ranking seventh among all crypto assets by market cap. Total value locked in Solana DeFi protocols stood at about $4.86 billion — well below an August 2025 peak of roughly $11.5 billion — putting Solana fourth among the largest DeFi ecosystems, behind Ethereum, Tron, and BNB Chain.

The numbers and facts here add up to a network that went from a $1.76 million token sale and a string of reputation-damaging outages to concrete, real integrations with Visa, PayPal, and Stripe. The risks haven't gone away: the token's market cap still tracks broader crypto sentiment, the memory of a 70% drop after FTX's collapse hasn't faded, and it's an open question whether decentralization is keeping pace with throughput. But unlike 2022, the story around Solana today runs less on speculative hype and more on specific, verifiable partnerships with real payments companies — which is a fundamentally different kind of story.

Our take: this is one of the most visible projects in crypto, one that a large share of other successful projects are being built on top of, with an ecosystem that's genuinely well developed. We'll keep watching this ecosystem — and the token — and keep you posted on the stories and cases worth knowing about.