What is Solana?

Solana is a high-performance open-source blockchain project founded in 2017 by former Qualcomm executive Anatoly Yakovenko, along with co-founders Greg Fitzgerald and Raj Gokal. The project’s internal testnet was launched in 2018, followed by multiple testnet phases, before the mainnet officially went live in 2020. Solana’s native cryptocurrency, SOL, is used for transaction fee payments and network governance participation.
Solana’s technical innovation lies in its unique combination of consensus mechanisms. Historically proven, by adding timestamps to transactions, creating a verifiable and tamper-proof time sequence, it enhances network efficiency and transaction speed; Proof of Stake involves holding and staking SOL tokens, allowing validators to participate in block validation, ensuring network security and decentralization. This hybrid consensus model enables the Solana network to achieve high throughput and low latency, theoretically processing over 710,000 transactions per second, offering new insights for the development of the blockchain industry.

Solana project identifier (Image source:https://iq.wiki/en/wiki/solana-sol)

Related Links:

Official website entrance:https://solana.com/en

X (Twitter):https://x.com/solana

Telegram:https://t.me/solana

Discord:https://discord.com/invite/kBbATFA7PW

Dexscreener:https://dexscreener.com/osmosis/1960

Github:https://github.com/solana-labs/solana

Reddit:https://www.reddit.com/r/solana/

Trading Entrance:https://www.gate.io/en/trade/SOL_USDT

Solana vs. Ethereum

1. Trading experience

   Solana far exceeds traditional smart contract platforms in transaction processing capability, thanks to its unique Proof of History (PoH) + Proof of Stake (PoS) hybrid consensus mechanism, which avoids the slow transaction confirmation problem of traditional blockchains, making it one of the fastest public chains at present.

   In addition, Solana has a significant advantage in fee structure. Its innovative token economic model reduces transaction costs to a very low level, allowing users to maintain low-cost operations while achieving high throughput. In contrast, Ethereum’s Gas fees often fluctuate significantly due to network congestion, especially during the DeFi and NFT boom periods, with transaction costs for a single transaction reaching tens to hundreds of US dollars, impacting user experience and adoption.

2. Development Environment

   Ethereum has a more mature development environment, including integrated IDEs (such as Remix), smart contract frameworks (such as Truffle), and efficient RPC deployment tools like Infura, which provides great convenience for developers and significantly improves the efficiency of smart contract development and deployment.

   By contrast, Solana leverages powerful development support from Rust and C++ languages, providing a more flexible choice for building high-performance decentralized applications. Its infrastructure and developer toolchain are also rapidly improving, offering developers an increasingly friendly programming environment.

3. Performance Maintenance

   The Ethereum Virtual Machine adopts a single-threaded processing model, which to some extent limits the parallel computing ability of the blockchain. Therefore, when developers build smart contracts on EVM, they need to invest additional effort in code optimization and gas fee management to ensure efficient operation of the contract in high load environments. In contrast, the Solana Virtual Machine (SVM) has parallel processing capabilities, able to execute multiple transactions simultaneously, significantly improving network throughput and execution efficiency. This not only reduces the difficulty of performance optimization for smart contracts, but also enhances the convenience of development and operation.

Solana developer tools and support (Image source:Web3 Infrastructure for Everyone | Solana)

Solana on-chain token

SOL is the native cryptocurrency of the Solana network, with multiple functions including paying transaction fees, participating in staking, and governance decisions; at the same time, SOL uses the SPL protocol of the Solana blockchain, similar to the ERC-20 standard on Ethereum.

The core function of SOL is the transaction fees generated when interacting with the payment network and executing smart contracts, similar to the operations of other blockchain networks. More importantly, SOL plays a crucial role in Solana’s PoS consensus mechanism. Through staking, SOL holders can contribute to network security and receive rewards. Additionally, SOL holders can participate in governance decisions of the Solana network, voting on important topics related to platform upgrades, parameter adjustments, etc.; while validators earn SOL rewards by validating and confirming transactions, incentivizing more nodes to join.

To promote the growth of the Solana ecosystem, Solana also offers various developer incentive programs and funding schemes to encourage developers to build and expand decentralized applications on the Solana blockchain, helping the Solana ecosystem to continue to thrive.

SOL Token Allocation Structure (Image Source:https://academy.shrimpy.io/post/solana-tokenomics-explained)

$SOL Market Performance

The continued increase in the amount of staking indicates that the Solana network still has strong appeal. However, the amount of unstaking has also increased significantly at specific times, especially in late November 2024 and late January 2025, possibly due to increased market volatility. Some investors chose to unstake. It is recommended that investors pay more attention to the balance between staking and redemption, changes in on-chain returns, and the latest developments in the expansion of the Solana ecosystem.

Staking data on the Solana network (image source: Solana Analysis | Solscan)

The cryptocurrency market has seen a bull market in the past six months, driving SOL prices to nearly $260 in early January 2025. However, as a large number of investors take profits at the highs, market selling pressure has significantly increased, with SOL prices testing the key support level of $200 multiple times. In February, the market’s risk aversion sentiment intensified due to the announcement of additional tariffs by the United States, further exacerbating the pullback pressure on SOL. In the following trading days, SOL accelerated its decline, breaking below the $140 mark at the end of February, touching a low near $135, and entering a short-term consolidation phase.

As of March 6 (UTC+0) when this article was written, the latest price of $SOL is $136.213, with a fully diluted market capitalization of $82.87 billion. If SOL successfully holds the $135 support level and continues to rise with increasing trading volume, a short-term bottom may be formed, and it may even rebound to the range of $160 - $180. The future trend will depend on market sentiment, the development of the Solana ecosystem, the macroeconomic environment, and the flow of funds in the overall cryptocurrency market.

During the period of 2024/09/06 - 2025/03/06, the trend of $SOL (Chart Source: https://coinmarketcap.com/dexscan/bsc)

$SOL Price Prediction

According to the price AI model, the future trend of $SOL is expected to be in a slow upward channel, with the currency price expected to fluctuate between $125 and $175, showing signs of stabilization in the market, but there is still a risk of pullback. The green shaded area represents the confidence interval of the price prediction. As time passes, this interval gradually narrows, indicating a decrease in market volatility in the future. In the long run, market confidence may gradually return.

$Sol price trend prediction (Image source:https://cryptopriceperdiction-isshiliu.streamlit.app/）

Conclusion

As an important competitor in the blockchain field, Solana, with its high throughput, low-cost transactions, and rapidly developing ecosystem, has become a significant force in the public chain race. Its future competitiveness will depend on the growth of on-chain applications, network stability, and the improvement of development tools. After reaching a high point at the beginning of 2025, the price of SOL experienced a market adjustment and entered a period of consolidation. In the future, Solana’s market performance may remain in an upward channel for a long time. Investors should maintain rational judgment in market fluctuations, manage risks well, and seize the long-term opportunities of blockchain technology development.