Solana (SOL)
A high-throughput proof-of-stake network and its token, set out as facts: founders, issuance schedule, fee burn and the trade-offs critics point to.
On this page
- Solana began with a November 2017 white paper by Anatoly Yakovenko describing Proof of History.[2]
- SOL pays transaction fees and is staked to secure the network, which has processed transactions since 2020.[3]
- SOL inflation was set to start at 8% a year and fall by 15% a year toward a long-term 1.5%.[8]
- Half of every base fee is burned and half goes to the validator.[4]
- The BIS argues that newer high-capacity chains such as Solana trade capacity for greater centralisation.[10]
What is Solana and who created it?
Solana is a proof-of-stake blockchain, and SOL is its native currency, used to pay transaction fees and to take part in securing the network.[3] The project history in Solana's documentation says Anatoly Yakovenko published a white paper describing Proof of History in November 2017.[2] Greg Fitzgerald began the first open-source prototype in February 2018, and in March 2018 the team created the Solana GitHub organization and renamed the prototype from Silk to Solana.[2]
Solana's site says the network has processed billions of transactions since 2020.[3] Our explainer What is Solana? covers the design in plain terms; this page is the fact sheet for the token.
How does the Solana network work?
Proof of History is a sequential chain of hashes in which each output feeds the next. Because the chain can only be produced in order, inserting data into it proves the data existed before the next hash.[1] That shared clock works alongside proof-of-stake: an elected leader produces blocks and validators confirm them.[1]
A leader schedule assigns validators to slots, and each slot is the period in which a leader takes in transactions and produces a block.[5] Transactions declare up front which accounts they read and write, which lets the runtime process non-overlapping transactions in parallel.[6] Running a validator is demanding: Anza's client documentation lists 12 or more CPU cores, 256 GB or more of RAM and at least 2 Gbit/s of bandwidth for staked nodes.[9]
How are new SOL created and burned?
New SOL comes from inflation. Solana's documented schedule starts at 8% a year, lowers the rate by 15% each year, and settles at a long-term 1.5%. All inflationary issuance is directed to delegated stake accounts and validators.[8] Validators take a commission on the rewards earned by stake delegated to them.[8]
| Year of schedule | Inflation rate |
|---|---|
| 1 | 8% |
| 2 | 6.8% |
| 3 | 5.78% |
| 5 | 4.18% |
| 8 | 2.57% |
| 11 | 1.58% |
| 12 onward | 1.5% (long-term floor) |
The rates after year 1 are our calculation from the 8% start and 15% yearly reduction; by our arithmetic the 1.5% floor applies from the twelfth year of the schedule.[8] On the other side of the ledger, each transaction pays a base fee of 5,000 lamports per signature, and 50% of it is burned while 50% goes to the validator.[4]
What is SOL used for?
- Fees. Every transaction pays the base fee per signature; users can add an optional priority fee, which goes entirely to the validator.[4]
- Staking. Stake is the SOL a validator stands to forfeit if malicious behaviour is proven,[5] and stake accounts receive the inflation rewards.[8]
- Account deposits. Every account must hold a minimum lamport balance proportional to its data size, known as the rent-exempt minimum.[7]
Compare the fee models in layer 1 vs layer 2 and gas fees.
What are the key dates in Solana's history?
Early dates come from the project history in Solana Labs' documentation; the 2020 start of live transactions is from solana.com. An exact mainnet launch date is not stated in the primary sources we checked.
| Date | Event |
|---|---|
| November 2017 | Anatoly Yakovenko publishes the Proof of History white paper[2] |
| 13 February 2018 | First open-source prototype begun[2] |
| 28 March 2018 | Solana GitHub organization created; prototype renamed Solana[2] |
| 19 July 2018 | 50-node permissioned public testnet[2] |
| December 2018 | v0.10 Pillbox testnet with 150 nodes[2] |
| 2020 | Network processing transactions[3] |
What are the specific risks of holding SOL?
- Centralisation trade-off. A 2022 Bank for International Settlements bulletin argues that newer layer 1 chains, naming Solana, gain capacity at the cost of greater centralisation and weaker security.[10] That is the authors' assessment; see the blockchain trilemma.
- Costly validators. The hardware listed for validators (256 GB of RAM or more, multiple NVMe disks) limits who can run one.[9]
- Dilution if unstaked. Inflation rewards go to stakers and validators, so holders who do not stake see their share shrink.[8]
- Fees on failure. If any instruction in a transaction fails, the whole transaction reverts, but the fee is still charged.[6]
- Custody. Lost or hacked self-custody wallets can mean permanent loss; custodians can be hacked or go bankrupt.[11]
What mistakes do beginners make with SOL?
- Quoting the white paper's throughput as fact. The 710,000 transactions per second figure is a theoretical number for a 1 Gbps network.[1]
- Ignoring validator commission. Delegated rewards are reduced by the validator's fee.[8] Compare commissions before delegating; see what is staking.
- Signing a transaction and waiting too long. A transaction's recent blockhash is valid for 150 slots, about 60 seconds, after which it must be rebuilt.[6]
- Expecting failed transactions to be free. They still pay the fee.[6]
Questions readers ask
Does SOL have a maximum supply?
Not a fixed cap like Bitcoin's. SOL follows an inflation schedule that falls from 8% toward a long-term 1.5% a year,[8] while half of each base fee is burned.[4]
Who runs Solana?
Validators that stake SOL produce and confirm blocks according to a leader schedule.[5] The project was started by Anatoly Yakovenko, who recruited co-founders including Greg Fitzgerald and Stephen Akridge.[2]
What is a lamport?
The smallest unit of SOL: one lamport is 0.000000001 SOL.[5]
Why do Solana transactions need a recent blockhash?
It limits how long a signed transaction stays valid, about 60 seconds (150 slots); after that it has to be signed again with a newer blockhash.[6]
SOL is the fee and staking token of a network built for speed, with a published inflation schedule that rewards stakers[8] and a fee burn that removes half of each base fee.[4] The trade-off critics, including the BIS, point to is heavier hardware and more centralisation.[10] Weigh those facts, not throughput headlines.
Sources
- Anatoly Yakovenko (solana.com), Solana: A new architecture for a high performance blockchain (v0.8.13)Primary source
- Solana Labs, History (Solana documentation, v1.14) (2022)Primary source
- Solana Foundation (solana.com), What is Solana? (2026)Primary source
- Solana Foundation (solana.com docs), Fees on Solana (2026)Primary source
- Solana Foundation (solana.com docs), Terminology (2026)Primary source
- Solana Foundation (solana.com docs), Transactions (2026)Primary source
- Solana Foundation (solana.com docs), Accounts (2026)Primary source
- Solana Foundation (solana.com docs), Inflation schedule (2026)Primary source
- Anza, Agave validator requirements (2026)Primary source
- Bank for International Settlements, Blockchain scalability and the fragmentation of crypto (BIS Bulletin No 56) (2022)Primary source
- US Securities and Exchange Commission (Investor.gov), Crypto Asset Custody Basics for Retail Investors (2025)Primary source
Educational content only — not financial, investment, legal or tax advice. Crypto-assets are high-risk and you could lose all the money you put in. Rules differ by country; check with your national regulator. See our risk disclosure and editorial policy.
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