Guide
What Is Solana? A Beginner's Guide to How It Works and the Role of SOL
Bottom line: a blockchain built for speed and low cost
Solana is a blockchain whose strengths are high transactions-per-second and very low fees. Its mainnet beta launched in March 2020, led by Anatoly Yakovenko and others. The native token is SOL, used for fees and staking.
Key takeaways
Solana is engineered for speed and low cost. The core is Proof of History (PoH) — a verifiable clock — combined with Proof of Stake. SOL pays fees, powers staking and serves as collateral. DeFi, NFTs and payments are active. Note: Solana has had network outages in the past, so understand the trade-off between performance and stability.
What Solana is, in one screen
Solana was built to process many transactions fast and cheaply. Where many chains slow down and get expensive when congested, Solana prioritized throughput from the start. Fees are typically a fraction of a cent per transaction, which suits small, frequent payments.
Why it's fast and cheap (Proof of History)
Ordering transactions ("which came first") is slow on many chains. Solana uses Proof of History (PoH), a "verifiable clock," to timestamp events and fix their order before consensus, making it efficient. Combined with Proof of Stake, this delivers high throughput and low latency.
| Aspect | Solana's approach |
|---|---|
| Design goal | Speed and low cost first |
| Ordering | Proof of History (timestamps) |
| Consensus | Proof of Stake |
| Fees | A fraction of a cent per tx |
The role of SOL
- Fees: pays gas for transactions and smart contracts
- Staking: delegate to validators to help secure the network and earn rewards
- Collateral / participation: used across DeFi
What it's used for
- DeFi: decentralized exchanges and lending
- NFTs: low fees enable large-scale minting and trading
- Payments: e.g. USDC via Solana Pay
An honest caveat
Because Solana pushes performance, it has had several network outages in the past (the most recent major one in February 2024). Stability has since improved, helped by efforts like the independent Firedancer client, but the trade-off is real. For the full history and what's changed since, see Solana's outage history.
Next
- How to buy SOL → How to Buy SOL: A Complete Guide
- What exactly is SOL? → What Is SOL?
FAQ
Q. What is SOL used for? A. Paying transaction fees and participating via staking to earn rewards.
Q. When did Solana launch? A. The mainnet beta went live in March 2020.
Sources
- Solana official site: https://solana.com/
- Proof of History (Solana blog): https://solana.com/news/proof-of-history
- Solana Status: https://status.solana.com/
Important notice
This article is for information only and is not investment advice. Crypto assets (including SOL) carry risks such as price volatility, hacking and network outages. Make decisions at your own responsibility and only with money you can afford to lose.
Sources
FAQ
- What is Solana?
- A high-performance blockchain designed for speed and low fees. Its mainnet beta launched in March 2020 and its native token is SOL.
- Why is Solana fast and cheap?
- Proof of History (a verifiable clock) makes transaction ordering efficient, and combined with Proof of Stake it delivers high throughput and very low fees.
- What is SOL used for?
- Paying transaction fees, staking to validators to earn rewards, and as collateral across DeFi.
- Is Solana safe?
- It has had several network outages in the past (the most recent major one in February 2024). Stability has improved since, but price volatility and other risks remain.
- How do I start using Solana?
- Get a wallet (e.g. Phantom), acquire SOL from a regulated exchange to cover transaction fees, and connect the wallet to a Solana app or DeFi protocol. See our step-by-step guide: [How to Buy SOL](/en/articles/how-to-buy-sol).
This article is informational only and is not financial, investment, or trading advice. Prices are reference snapshots and may be outdated. Always do your own research.
