Solana is a

blockchain The blockchain is a distributed ledger with growing lists of Record (computer science), records (''blocks'') that are securely linked together via Cryptographic hash function, cryptographic hashes. Each block contains a cryptographic hash of th ...

platform which uses a proof-of-stake mechanism to provide

smart contract A smart contract is a computer program or a Transaction Protocol Data Unit, transaction protocol that is intended to automatically execute, control or document events and actions according to the terms of a contract or an agreement. The objective ...

functionality. Its native

cryptocurrency A cryptocurrency (colloquially crypto) is a digital currency designed to work through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. Individual coin ownership record ...

is SOL. Solana was launched in 2020 by Solana Labs, which was founded by Anatoly Yakovenko and Raj Gokal in 2018. The blockchain has experienced several major outages, Solana wallets were subjected to a hack, and a

class action lawsuit A class action A class action is a form of lawsuit. Class Action may also refer to: * ''Class Action'' (film), 1991, starring Gene Hackman and Mary Elizabeth Mastrantonio * Class Action (band), a garage house band * "Class Action" (''Teenage R ...

was filed alleging that Solana sells unregistered

securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...

, and misled investors about the number of tokens. The SEC has also filed a lawsuit against a cryptocurrency exchange alleging that Solana should be regulated as a security. The value of Solana tokens has fluctuated greatly.

Characteristics

According to the company's

white paper A white paper is a report or guide that informs readers concisely about a complex issue and presents the issuing body's philosophy on the matter. It is meant to help readers understand an issue, solve a problem, or make a decision. Since the 199 ...

, Solana runs on a

proof of stake Proof-of-stake (PoS) protocols are a class of consensus mechanisms for blockchains that work by selecting validators in proportion to their quantity of holdings in the associated cryptocurrency. This is done to avoid the computational cost of ...

model. ''

The New York Times ''The New York Times'' (''NYT'') is an American daily newspaper based in New York City. ''The New York Times'' covers domestic, national, and international news, and publishes opinion pieces, investigative reports, and reviews. As one of ...

'' and ''

Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and also published digitally that focuses on business and economic Current affairs (news format), current affairs. Based in London, the paper is owned by a Jap ...

'' described the coin as an alternative to

Ethereum Ethereum is a decentralized blockchain with smart contract functionality. Ether (abbreviation: ETH) is the native cryptocurrency of the platform. Among cryptocurrencies, ether is second only to bitcoin in market capitalization. It is open-s ...

History

Solana was first opened to the public in March 2020, with its first block being created on 16 March 2020. The Solana blockchain was designed to support smart contracts and decentralized apps in particular. Large numbers of simultaneous transactions have contributed to several outages of the Solana blockchain. In June 2021, Solana Labs sold $314 million worth of its native cryptocurrency, SOL, to a group of funds led by

Andreessen Horowitz AH Capital Management, LLC (commonly known as Andreessen Horowitz, or a16z) is an American privately held venture capital firm, founded in 2009 by Marc Andreessen and Ben Horowitz. The company is headquartered in Menlo Park, California. As of M ...

and Polychain Capital. On 1 July 2022, a

was filed against Solana Labs. The lawsuit accused Solana of selling unregistered

tokens in the form of Solana from 24 March 2020, onward and that Solana deliberately misled investors concerning the total circulating supply of SOL tokens. According to the lawsuit, Anatoly Yakovenko, the founder of Solana Labs, lent a market maker more than 11.3 million tokens in April 2020 and failed to disclose this information to the public. The lawsuit claimed that Solana stated it would reduce the supply by this amount, but it only burned 3.3 million tokens. On 3 August 2022, 9,231 Solana wallets were hacked and four Solana wallet addresses stole approximately $8 million from victims. The Solana Foundation said that the hack was caused by digital wallet software from Slope Finance. In April 2023, Solana Mobile, a subsidiary of Solana Labs, began selling the Solana Saga, an Android smartphone with several Solana-based decentralized apps preinstalled. In June 2023, the SEC sued

Coinbase Coinbase Global, Inc. is an American cryptocurrency exchange. It was founded in 2012 by Brian Armstrong and Fred Ehrsam. Coinbase has over 100 million users, and is the largest U.S. based cryptocurrency exchange as well as the world's bigge ...

, alleging that Solana and twelve other currencies offered by the platform failed the Howey Test and qualified as securities. The suit accuses Coinbase of illegally evading requirements for disclosure by offering these tokens. The SEC had previously issued a

Wells notice A Wells notice is a letter that the U.S. Securities and Exchange Commission (SEC) sends to people or firms at the conclusion of an SEC investigation that states the SEC is planning to bring an enforcement action against them. The notice informs t ...

to Coinbase in March. Solana Foundation has denied that the token is a security. In September 2023, Visa announced that along with payment processors Worldpay, Inc. and Nuvei, it had added support for the Solana blockchain to send payments to merchants using the stablecoin

USD Coin USDC is a cryptocurrency stablecoin which is issued by Circle (company), Circle. It is Fixed exchange rate system, pegged to the United States dollar, and is distinct from a central bank digital currency (CBDC). Usage USDC operates as an Eth ...

(USDC), rather than fiat currency via bank wire.

Market value

The value of Solana tokens has fluctuated greatly. The market capitalization of the Solana blockchain surpassed $63 billion in September 2021, and reached $74 billion in early November 2021, having risen by nearly 12,000% that year to a price of $259.96. The blockchain's popularity at this time was due in part to interest in

NFT A non-fungible token (NFT) is a unique digital identifier that is recorded on a blockchain and is used to certify ownership and authenticity. It cannot be copied, substituted, or subdivided. The ownership of an NFT is recorded in the blockchai ...

s. In November 2022, the price of Solana dropped by 40 percent in one day following the bankruptcy of FTX, due to sell off from Alameda Research. Solana was Alameda's second-largest holding at the time and FTX held $982 million in Solana tokens. By the end of 2022, Solana had lost more than $50 billion in value since the beginning of the year. Since the start of 2023 until 15 March, coinciding with a rise in the cryptocurrency market, Solana's value had risen by 100 percent to a

market capitalization Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders. Market capitalization is equal to the market price per common share multiplied by ...

of around $7 billion. On 11 June 2023, Solana dropped nearly 30% in one day after the SEC announced that it would make the case in court that Solana is a financial security, causing big exchanges to liquidate their holdings, including Robinhood which delisted SOL and other tokens named by the SEC in its lawsuit. In November 2024, Robinhood Crypto relisted Solana (SOL) for U.S. customers, alongside several other cryptocurrencies. In January 2025, Solana reached a new all-time high, driven by increased trading activity following the launch of US President Donald Trump's memecoin, $TRUMP, on the Solana blockchain.

Outages

The Solana blockchain had experienced several notable outages in service. On 14 September 2021, the Solana blockchain went offline after a surge of transactions caused the network to

fork In cutlery or kitchenware, a fork (from 'pitchfork') is a utensil, now usually made of metal, whose long handle terminates in a head that branches into several narrow and often slightly curved tines with which one can spear foods either to h ...

, and different validators had different views of the state of the network. The network was brought back online the next day on 15 September 2021. The outage lasted a total of about 17 hours. The Solana blockchain again went offline on 1 May, with the outage lasting roughly seven hours due to it being taken offline by bots. The blockchain went offline again on 31 May 2022, due to a bug in how the blockchain processes offline transactions. This outage lasted about four and a half hours. On 1 October 2022, the Solana network went down for 6 hours due to a consensus bug in the validator client allowing a misconfigured node to publish multiple valid but different blocks. Solana's outages have frequently resulted in the value of the network's native SOL token falling.

References

{{Authority control Blockchains Cross-platform software Cryptocurrencies Cryptocurrency projects

Characteristics

History

Market value

Outages

See also

References