What is Solana? A plain guide to SOL and how the network works

Solana is a public blockchain built for speed. It settles transactions in well under a second and charges fees that usually come to a fraction of a cent. Its native token is SOL, which pays those fees and helps secure the network through staking. Developers use Solana to run trading apps, payment tools, games and token projects. This guide walks through how it works.

The network launched in March 2020, with its first block created on 16 March that year. Anatoly Yakovenko and Raj Gokal founded the project in 2018 through a company called Solana Labs. Yakovenko, a former Qualcomm engineer, had written a 2017 paper describing a way to timestamp transactions before they are grouped into blocks. That idea became the core of Solana's design.

How Solana works: proof of history and proof of stake

Most blockchains agree on the order of transactions by having computers talk to each other constantly. That is slow. Solana adds a second clock. It uses a method called proof of history, which stamps each transaction with a cryptographic record of time, so validators can agree on the order without checking in with one another at every step.

On top of that sits proof of stake, the system that decides who adds the next block. Validators lock up SOL, and those with more SOL staked to them carry more weight in the votes that confirm blocks. Both parts run together. The result is a chain that handles many transactions in parallel rather than one after another.

Think of proof of history like a notary who stamps every note with the exact time before passing it along. Because the order is already fixed in the stamp, the other clerks do not stop to argue about what came first. They just check the stamps. That is the shortcut that lets Solana move at the pace it does.

Running the chain is a job spread across hundreds of computers, called validators, around the world. They take turns as the leader that builds the next block, following a schedule set in advance for each epoch. The more SOL delegated to a validator, the more often it gets a turn and the more fees and rewards it can earn. Stake decides both who votes and who writes the blocks.

What the SOL token does

SOL is the fuel and the glue. Every action on Solana, a trade, a transfer, a token mint, costs a small amount of SOL in fees. Holders can also stake their SOL by delegating it to a validator. The validator keeps running the network, and the staker earns a share of the rewards.

Delegating is not the same as handing over your coins. Solana's own documentation is blunt about it: delegating your tokens to a validator does not give the validator ownership or control over them. Rewards come from new SOL the network creates, called inflation. That rate started near 8 percent a year and falls by 15 percent each year until it levels off around 1.5 percent. Payouts land once per epoch, a stretch that runs about two days.

One more point is worth knowing. On Solana, unlike some networks, the penalty for validator misconduct, called slashing, is not applied automatically. That removes one worry for stakers. It does not remove the risk of backing a validator that performs badly or drops offline, which can cost you rewards.

Fees on Solana, in plain numbers

Here is where Solana stands apart from older chains. The base fee for a transaction is 5,000 lamports per signature. A lamport is the smallest unit of SOL, worth 0.000000001 SOL, so there are a billion of them in a single coin, and that base fee is tiny. Half of it is burned, which removes it from supply. The other half goes to the validator that processed the transaction.

When the network is busy, you can add a priority fee to jump the queue, and that extra amount goes entirely to the validator. Even then, a Solana transaction in normal conditions costs far less than a cent. Compare that to a busy day on Ethereum, where a single swap can run several dollars in gas.

How fast Solana is, and what comes next

Solana produces blocks several times a second, so a trade or a payment usually confirms about as fast as you can tap a button. The top-end numbers are larger still. In a test, a Jump Trading engineer ran the new Firedancer software at more than 1 million transactions a second on standard hardware, and 1 million a second is the figure the network keeps aiming at.

Treat that number with care. A lab demo is not a busy public network with real users, bots and spam hitting it at once. Day to day, Solana handles far fewer transactions than its peak, like a car that can touch 200 miles an hour but almost never does on a real road.

Two upgrades are meant to close that gap. Firedancer, a validator client built from scratch by the firm Jump Crypto, went live on Solana's mainnet on 12 December 2025 and ran on about a fifth of validators by early 2026. Alpenglow, a planned change to how the chain agrees on blocks, would cut the time to finalize one to around 150 milliseconds and rewrite the proof of history system at the core. Neither is a finished story. Alpenglow had not fully shipped at the time of writing.

What people build on Solana

Low fees and fast blocks have made Solana a home for trading. Decentralized exchanges, lending apps and tools that move dollar-pegged stablecoins all run on it. The chain also became a center for NFTs and, in the last cycle, for meme coins, the tiny joke tokens that spin up and collapse by the thousand. That mix is both the appeal and the problem. The same cheap, open design that welcomes a serious payments app also welcomes a wave of junk.

Stablecoins are a growing part of the picture. Because a transfer costs a fraction of a cent and clears in moments, Solana suits small, frequent payments in a way a slow or costly chain does not. Builders have leaned into that for remittances, merchant tools and payouts. Whether that use sticks, rather than fading when the next hot trend arrives, is an open question for the chain's next few years.

Where Solana has struggled: the outages

Speed has come at a cost, and the cost has been reliability. Solana has gone fully offline more than once. In September 2021 a flood of transactions caused the network to fork, and it stayed down for about 17 hours. In 2022 it stopped several more times, including a six-hour outage on 1 October that a consensus bug in the validator software set off.

Each halt knocked the SOL price when it happened. The team has worked to make the network sturdier since then, and long outages have become rarer. Still, the history matters. A chain that stops is a chain that cannot settle your trade when you need it, and anyone using Solana should weigh that risk.

Congestion was the root problem. When too many transactions arrived at once, often from bots chasing a popular token sale, nodes fell out of sync and the chain stalled. Fixes since then have aimed at handling that flood without breaking, which is part of what the Firedancer rewrite is meant to do.

What to know before you use Solana

A few things are worth keeping in mind. Solana is fast and cheap, and that has pulled in a large base of apps, from exchanges to meme-coin launchpads. Low fees cut both ways. They make real payments practical, and they also make it cheap to spin up thousands of worthless tokens, so the network carries a lot of noise.

Where you keep SOL matters as much as whether you own it. You can hold it in a self-custody wallet, where you control the keys, or leave it on an exchange, where the exchange does. Each path carries its own risk, from losing a seed phrase to an exchange failing. The rule that holds across every chain holds here. If you do not control the keys, you are trusting someone else to.

SOL is a volatile asset. Its price has swung hard through each market cycle and with the outages. It now trades inside US spot ETFs too, though those funds are young and small. Staking rewards are paid in more SOL, not dollars, so a yield figure means little if the token falls. None of this is advice to buy or avoid it. It is the context you want before you move money onto any chain, Solana included.