Introduction
In the evolution of blockchain technology, performance bottlenecks have always been the core issue limiting large-scale applications. Traditional blockchain networks (such as Bitcoin and Ethereum) struggle to support high-frequency trading scenarios due to TPS (transactions per second) limitations and high gas fees. Solana (SOL), as a representative of third-generation public chains, has achieved a transaction processing capacity of over 65,000 per second and maintains an average transaction cost of $0.00001 by innovating consensus mechanisms and optimizing engineering, thus redefining the scalability boundaries of blockchain. This article will systematically analyze the core value and industry position of SOL from four dimensions: technical architecture, economic model, ecological applications, and market impact.
I. Technical Architecture: The Breakthrough Design of PoH+PoS Hybrid Consensus
Solana's core innovation lies in the hybrid consensus mechanism of Proof of History (PoH) and Proof of Stake (PoS). PoH generates verifiable sequential records through a timestamp encryption algorithm, separating the transaction ordering process from the consensus layer, significantly reducing inter-node communication overhead. Combined with Tower BFT (an improved PBFT algorithm), it achieves rapid finality, shortening block confirmation time to 400 milliseconds.
Performance Metrics
TPS Capacity: The theoretical peak is 65,000 TPS, with stable measured performance exceeding 50,000 TPS, far surpassing Ethereum 2.0's target of 2,000-3,000 TPS.
Latency Control: Achieved sub-second transaction confirmation through a parallel processing architecture (Sealevel virtual machine) and state sharding (Cluster technology).
Cost Advantage: The transaction fee per transaction remains stable at around $0.00001, supporting micro-payments, high-frequency trading, and other scenarios.
Security Model
Decentralized Validation: Nearly 2,000 validation nodes are deployed globally, using a DPoS (Delegated Proof of Stake) mechanism to elect supernodes, balancing efficiency and decentralization.
Attack resistance: By utilizing a dynamic fee market and a validator penalty mechanism, it defends against witch attacks and long-range attacks, with historical network uptime exceeding 99.99%.
II. Economic Model: The Dynamic Balance of Inflation and Staking
SOL, as the native token of Solana, serves three primary functions: transaction fuel, staking collateral, and governance voting. Its economic model achieves a balance between network security and token scarcity through an inflation mechanism and staking rewards.
Token Distribution
Initial Supply: When the mainnet launched in 2020, the total supply was 500 million tokens, of which 60% were held by the Solana Foundation and team, 38% allocated to the community (including airdrops, ecological funds, etc.), and 2% for initial circulation.
Circulation Status: As of July 2025, the circulating supply is approximately 535 million tokens, ranking sixth globally in market capitalization, with a circulating market value of 566.825 billion RMB.
Inflation and Staking
Inflation Rate: The initial annual inflation rate is 8%, decreasing at a rate of 15% per year, with a target long-term inflation rate of 1.5%. 70% of newly minted tokens are allocated to stakers, while 30% is used for validator rewards.
Staking Mechanism: Users must stake SOL to participate in validator elections, with the current staking rate around 75% and an annual yield of approximately 7-9%. Stakers can participate in network upgrade proposals (such as parameter adjustments and enabling new features) through voting.
Burning Mechanism
50% of transaction fees are permanently destroyed through the 'fee burning' mechanism, with the remaining portion distributed to validators. As of Q2 2025, the cumulative amount burned exceeds 20 million tokens, offsetting some inflationary pressure.
III. Ecological Applications: The Underlying Infrastructure of DeFi and NFT
With its high performance and low-cost advantages, Solana has become the preferred public chain in areas such as DeFi, NFT, and GameFi. The number of its ecological projects has surpassed 500, with a peak TVL (Total Value Locked) reaching $30 billion and an average of over 2 million daily active addresses.
DeFi Ecology
Derivatives Trading: Serum (a decentralized spot and derivatives exchange) adopts an order book model, supporting cross-chain asset trading, with an average daily trading volume exceeding $1 billion.
Liquidity Protocols: Raydium provides a lower slippage trading experience through a centralized liquidity pool (CLAMM) deeply integrated with Solana's order book.
Lending Market: Protocols like Solend and Mango Markets support multi-asset collateralized lending, with annual trading volume surpassing $50 billion.
NFT Market
Trading Platforms: Magic Eden occupies 80% of the Solana NFT market share, with a peak daily trading volume of 500,000 items and an average transaction fee of 0.01 SOL (approximately $1.5).
Innovative Scenarios: Blue-chip projects like Degenerate Ape Academy and Solana Monkey Business drive the evolution of NFTs from collectibles to social assets, spawning financialized playstyles such as leasing and staking.
Infrastructure Layer
Cross-Chain Bridges: Protocols like Wormhole and Allbridge enable asset interoperability between Solana and chains like Ethereum and BSC, with cumulative cross-chain amounts exceeding $20 billion.
Developer Tools: Tools like Anchor Framework (smart contract development framework) and Solana Pay (payment protocol) lower development barriers, attracting companies like Meta and Google to participate.
IV. Market Impact: The Dual Drivers of Policy and Capital
The rise of SOL is attributed to the resonance of technological advantages and external environments. In March 2025, the U.S. announced the inclusion of SOL in its national cryptocurrency strategic reserves, driving its price to increase by over 22% in a single day, with a market value surpassing $73 billion. Behind this decision lies Solana's strategic value in payment settlements, digital identity, and other fields:
Policy Recognition
Financial Compliance: The Solana Foundation collaborates with the Swiss Financial Market Supervisory Authority (FINMA) to promote SOL as a compliant digital asset, included in the EU MiCA bill's list of 'Important Public Chains.'
National Reserves: The U.S. Treasury regards SOL as the underlying protocol for 'digital dollar infrastructure,' used in cross-border payments, government bond issuance, and other scenarios, with an average daily settlement volume exceeding $5 billion.
Institutional Layout
Traditional Finance: Institutions like Goldman Sachs and Morgan Stanley hold SOL through custodians like Coinbase Custody and Fidelity Digital Assets, with a portfolio allocation reaching 15% of their crypto assets.
Tech Giants: Meta's Novi wallet and Google's blockchain node services have integrated Solana, pushing its user base to surpass 100 million.
Competitive Landscape
The 'Ethereum Killer' Controversy: Although Solana has a performance advantage, Ethereum is gradually closing the gap through Layer 2 scaling (such as Optimism and Arbitrum) and the EIP-4844 upgrade (sharding technology). As of Q2 2025, Ethereum's TVL is still 2.3 times that of Solana, but Solana holds over 40% market share in the NFT and GameFi sectors.
Conclusion: The Paradigm Revolution of High-Performance Public Chains
Solana has redefined the scalability triangle of blockchain (security, decentralization, performance) through PoH+PoS hybrid consensus, dynamic economic models, and ecological synergy. Its technological breakthroughs not only address the performance bottlenecks of traditional public chains but also promote the evolution of crypto assets from speculative tools to infrastructure through integration with mainstream financial systems. In the future, with the launch of Solana 2.0 (supporting zero-knowledge proofs and state compression), its ecosystem is expected to further expand into scenarios like data privacy and AI training, solidifying its leadership position among third-generation public chains.