Why do everyone think Solana will be the “Ethereum Killer”?

As the price of SOL tokens has risen for several consecutive weeks, Solana has become a hot topic in the current crypto industry. At the time of writing, the trading price of SOL is approximately US$197.75, a surge of 11,400% from less than US$2 in January. According to data from Cointelegraph Markets, with its current value, Solana ranks sixth in the market value of cryptocurrencies with a market value of more than 50 billion U.S. dollars.

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The catalyst for this bullish momentum may be a $314 million financing transaction led by Andreessen Horowitz and Polychain to Solana in June this year, aimed at further advancing its technology in the decentralized finance (DeFi) field. It is worth noting that this investment took the form of buying SOL tokens instead of traditional stock financing. Another key reason for Solana’s outstanding performance is that they announced that they will hold the fourth hackathon on October 8. This is seen as a positive move by Solana, because through this event, it can help achieve wider adoption of its technology. .

Thus, as Solana has made substantial progress, many people think that Solana could become Ethernet Square killer, and there is strength and Boca ( Polkadot ), Avalanche and coins An intelligent chain (Binance Smart Chain) confrontation.

Introduction to Solana

Solana, which was launched in 2017, has now developed into one of the most cutting-edge blockchains in the cryptocurrency field. The project was established by employees from Google, Apple, Qualcomm and other high-tech companies. The goal is to build a decentralized and permission-free node network to match the computing performance of a single node and become the highest performance decentralized in history.化网络.

Judging from the current development situation, Solana is indeed slowly achieving its goal. There are now more than 400 decentralized applications on the blockchain, and its native token market value has reached 105 billion U.S. dollars. Ranked sixth in the ranking. Not only that, the Solana network is now operated by about 1,000 nodes and can process 50,000 transactions per second (TPS), far exceeding the 10-15 TPS of Ethereum and Bitcoin, and even exceeding the 1700 TPS of payment giant Visa. This unparalleled efficiency allows the Solana blockchain to support high-speed, scalable, and cost-effective transactions, and it also makes it an ideal blockchain for building high-throughput encryption applications across verticals.

On the Solana blockchain, there is a mechanism for incentivizing transaction processing and honest verification of the blockchain, which is based on its native token SOL. When clients submit transactions to the network, they must include transaction fees in SOL to compensate The calculation work done by the verifier to include transactions and prevent Internet spam. When validators successfully mine new blocks, they will receive block rewards paid through newly minted SOL tokens, which incentivize them to continue to verify the network honestly.

The Solana blockchain issued 500 million SOL tokens at the beginning of its creation. The token currently has a circulating supply of 290 million and is the sixth largest cryptocurrency by market value. Just two weeks ago, the price of SOL tokens exceeded $100 for the first time, an increase of about 230% from a month ago. It is worth mentioning that the total supply of SOL has always been maintained at about 500 million. This is because although the supply of coins will expand in the era of payment of block rewards to validators, Solana also partially destroys the transaction fees paid by users. To reduce the supply of tokens, and this operation will be executed together with other token destruction transactions.

Solana’s advantages

Transaction processing speed and network scalability have always been one of the biggest problems encountered by decentralized application developers on the Ethereum blockchain, which will generate extremely high gas fees and extremely slow transaction confirmations.

Frankly speaking, today, developers still have obvious concerns about the speed and scalability of the Ethereum blockchain, which may severely limit the future development of the Ethereum ecosystem. As the network becomes more and more saturated, high gas fees and slow transaction times have also frustrated many users and dapp developers, leading to the need for a more scalable and computationally efficient Layer 1 architecture in the crypto market. getting bigger.

The core difference between Solana and Ethereum and other smart contract-oriented blockchains is: Solana blockchain’s scalability and transaction processing efficiency (400 milliseconds block time and 50,000 TPS) are extremely high, making it a lot of needs. First choice for dapps that handle a large number of users and high transaction throughput. Due to the high efficiency of the Solana blockchain, the platform can support the construction of any decentralized application that requires high throughput processing and exceeds computing power. This is particularly important for many games or DeFi and NFT fields that require a large amount of computing bandwidth. Because in these areas, computational complexity and transaction throughput will cause gas prices to rise. In addition, Solana’s on-chain Gas fees are deterministic, and each transaction costs a few thousandths of a cent, while the average transaction fee on Ethereum is about $6.

Not only that, compared with other blockchains, these computational improvements brought by the Solana blockchain can achieve a series of unique use cases, such as: making DeFi projects no longer isolated; making the game more dynamic Digital assets; make DEX more capital efficient and composable; allow creators to use more tools in vertical fields such as NFT sales and music.

Exciting projects in the Solana ecosystem

First, let’s take a look at Solana’s several projects in the field of decentralized finance. They are: Synthetify, Sabre, Project Serum, Raydium, Oxygen, and Phantom. Among them, Synthetify is a decentralized exchange that supports synthetic asset trading; Sabre is a cross-chain stable currency and packaged asset exchange on the Solana blockchain, which uses automated market makers to promote local stable currency and asset instant transactions. At the same time, it also supports real-time trading of stablecoins and assets from other blockchains; the non-custodial decentralized exchange (DEX) Project Serum for spot and derivatives trading implements the on-chain central limit order book (CLOB), With sub-second settlement and extremely low fees; Raydium is a decentralized exchange that uses automated market makers (AMM) to provide liquidity for the on-chain central limit order book; Oxygen is a decentralized currency market, It mainly provides support services for Solana’s on-chain lending; Phantom provides wallet services on the Solana blockchain, supporting Solana tokens and NFTs.

Secondly, Solana’s several projects in the field of creator economy are: Solanart, Audius and Metaplex. Among them, Solarart is an NFT market that allows anyone to buy and sell NFTs based on the Solana blockchain at a very low gas cost; Audius is a decentralized streaming platform that uses Solana-based native tokens to promote exchanges between artists and listeners. Direct payment transactions; Metaplex launches their own NFT online store through a simplified drag-and-drop interface, aiming to help creators build stronger relationships with fans.

Finally, Solana’s projects in the game field include: Aurory, DefiLand, Star Atlas and Stardust. Among them, Aurory is creating a digital meta-universe to provide support for the “play while earning” game mode; DefiLand is building a meta-universe with agriculture as the theme, gamifying DeFi to accelerate mass adoption; Star Atlas is launching a With a large multiplayer meta-universe in the background of the future space, the NFT assets of the game give players unique ownership of their game state; Stardust is building a set of application programming interfaces to support game developers to use blockchain assets in the game, and Provide frictionless and low-cost NFT creation services, greatly simplifying the on-chain player management functions and legal currency payment services.

Eight key technological innovations

The most worth mentioning of the Solana blockchain is its 8 key technological innovations. In order to obtain single-node performance from a group of decentralized nodes, the state changes in the Solana blockchain must have computational limitations and cannot be affected by the communication delay between nodes. Solana has achieved this breakthrough through the following eight innovations s efficiency. The eight technological innovations are: Proof-of-History, Gulf Stream, Turbine, Sealevel, Cloudbreak, Tower Consensus, Archivers and Pipelining.

One of the core functions of the Solana blockchain is to record the sequence of events, effectively running a time synchronization record. In order to solve the sorting problem, the Solana blockchain uses a process called Proof of History (PoH), which is a decentralized clock that recursively calculates a preimage-resistance called a verifiable delay function (VDF). ) Hash function (SHA256) to operate. This process “proves” that a given state of the blockchain is before or after other states. Ultimately, the blockchain can be increased without the need for network verifiers to communicate with each other.

Gulf Stream is a memory pool management solution to process inbound transactions from network clients. The client will refer to the recently confirmed block hash to sign the transaction; if the relevant blockchain hash is not confirmed by the network within the “timeout” period, the client can confirm that the transaction is invalid and will not be on the chain. Execute the transaction on.

Turbine is a unique block propagation technology used by the Solana blockchain. This technology divides blocks into data packets, and then distributes these data packets to a set of random peer nodes, which continue to spread messages in the validator group . This technology can solve the well-known decentralized blockchain efficiency bottleneck-network delay.

Sealevel is a unique parallel transaction processing engine used by the Solana blockchain to increase network throughput and allow transactions to accurately pre-specify the data they will read and write. In addition, the Solana system will also identify non-overlapping (affecting the same data fields) transactions, and then execute these transactions in parallel.

Cloudbreak is a custom-designed state architecture that is optimized for concurrent reads and writes in the RAID 0 configuration of SSDs. Importantly, this architecture enables verifiers to execute transactions in advance, thereby reducing the delay in transaction confirmation and solving the memory problem required to track account status.

Tower Consensus is an algorithm, similar to a modified version of Practical Byzantine Fault Tolerance (PBFT), to reach a consensus on the current state of the blockchain on all its nodes. In this algorithm, based on the Proof-of-Stake election, a node is selected in advance as the “leader” of the network, and the probability of being selected is proportional to the number of SOL tokens pledged by the node. According to experience, through Tower Consensus, the Solana blockchain can achieve a block generation time of 400 milliseconds.

Since the memory usage of the blockchain network has grown extremely fast, data storage is a key bottleneck for the scalability of the blockchain. Solana does not allow each validator to store the entire blockchain, but offloads data from the validator to Archiver nodes, which do not participate in consensus and have the explicit function of storing historical fragments of the blockchain state. The network regularly asks the archiver to prove that they are storing data as required, which can be done efficiently in batches by the validator GPU.

In addition, transactions on the Solana blockchain are processed through a series of steps called Transaction Processing Units (TPU). Since each successive step involves different hardware layers, the Solana blockchain can process 50,000 transactions at the same time; When the processing unit broadcasts the next block to the verifier, it will start to read the next batch of data packets and verify its signature. This process is called Pipelining.

Summarize

With the promotion of high efficiency, the market value of the Solana ecosystem has soared to 38 billion U.S. dollars (and is still growing), and the total lock-up volume has reached 6.27 billion U.S. dollars. Not only that, the price of SOL native tokens has also exceeded $200.

These all reflect the confidence of the encryption community in Solana. With the development of encryption technology to the multi-chain field, Solana is gradually developing into an excellent platform to meet the needs of low latency and high scalability.

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/why-do-everyone-think-solana-will-be-the-ethereum-killer/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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