Ukrainian Anatoly Yakovenko founded the Solana blockchain startup in 2017. Its technology is faster than Ethereum, one of the most popular blockchain platforms in the world. In five years, the startup sold hundreds of millions of tokens, on which investors earned about $1 billion, multiplying the initial investment thousands of times, The Information reports. Why did they believe in the idea of a Ukrainian
How it all began
Yakovenko met his first investor, David Kwik, a partner in the Enginefish marketing company, in 2018 at a California underwater hockey club. "I vividly remember him getting out of the pool and saying, 'Hey, I'm building my own blockchain,'" Quick told The Information in December.
At that time, Yakovenko had a hard time finding investment in a blockchain startup. After a record-breaking 2017 for bitcoin, its price fell 80% the following year, sowing distrust in the industry among investors. Quick liked Yakovenko's idea, however, and along with other investors participated in the company's initial public offering (ISO) in 2018. Then Solana sold almost 80 million tokens - one was worth 4 cents (1.08 UAH at that time)
Since then, the company's token, SOL, has grown 4,300 times and is now considered the fifth most valuable in the world with a market cap of $50 billion. By comparison, Ethereum, which has been around since 2015, reached $456 billion in December. Total since 2018 Solana has sold 307 million tokens and has never attracted venture capital.
Why investors buy tokens
SOL tokens provide access to Yakovenko's Solana blockchain, which enables the creation of decentralized applications - so-called daaps. Solana is faster than its famous competitor Ethereum. It processes about 3,187 transactions per second, with over 65,000 during peak periods. Ethereum only processes 15 transactions per second, Bitcoin five to seven.
One block of information on the Solana network is created in 0.4 seconds, Ethereum in 10 seconds, and Bitcoin in 10 minutes. The commission paid by miners depends on the speed of work. Solana's price is much lower - less than one cent per transaction, Ethereum - $25-$53, depending on the price of electricity. The developers built the Audius streaming service, the DeFi Land simulation game, the Saber cryptocurrency exchange, and about 900 other programs on the Solan blockchain. Ethereum has almost 3,000 such programs, according to data from the State of the Daaps tracker.
Yakovenko said in his interviews that he does not want to destroy Ethereum - "it is bad for the industry". His plan is to influence the global financial market. "Big companies like Bank of America or Visa can't change and move as fast as a global community of developers who come together and write code when they want," he told TechCrunch.
How does Yakovenko's idea work?
Yakovenko wanted to solve the main "trilemma" of blockchain technologies: how to make them fast, decentralized and high-quality at the same time. For this, he invented a new algorithm - proof-of-history, which, unlike the most famous ones - proof-of-stake and proof-of-work, made the process of processing transactions in the blockchain faster and more secure. This is how the system works.
In order to add a block of information to the blockchain database, miners must reach a consensus - decide what and in what sequence to record. Different blockchains work with different consensus algorithms. For example, Ethereum uses the most popular algorithm - proof-of-work.
Who is Yakovenko?
Yakovenko, 41, was born in Ukraine, but after the collapse of the Soviet Union he emigrated to the United States - he was only 11. In an interview, he recalls that he started working on blockchain, in particular, because of the collapse of the USSR - he saw how in one day the economy, which depended on decisions of one party.
There was another reason: he realized that traditional finance was bureaucratized and would work more efficiently if it were made more technological and decentralized. He also liked the idea that thanks to the blockchain, anyone can do cryptography.
In 2003, Yakovenko graduated from the Faculty of Computer Science at the University of Illinois and launched the first startup that developed something like Google Voice - a service for managing phone calls. For the next 13 years, he worked for Qualcomm, a company that researches wireless communications and develops processors for mobile phones. "If you have a smartphone, one of its components was definitely made by Qualcomm," Yakovenko says.
Since 2016, he has worked as an engineer at the Mesosphere company, which develops software for data centers, and at the Dropbox company, which creates the file exchange of the same name. The idea for Solana came when Yakovenko was sitting in a coffee shop after drinking two cups of coffee and a beer, he told TechCrunch.
Solana now has five co-founders: former Qualcomm engineers Greg Fitzgerald and Steven Akridge, as well as former medtech executives Eric Williams and Raj Gokal. The company was named after a San Diego beach where former Qualcomm colleagues used to surf. Solana's head office is in San Francisco. Currently, the company employs 78 people.
