Solana is a Layer 1 blockchain built for high throughput and low fees, processing transactions on a single chain rather than through Layer 2 networks. Used for fees and staking, SOL is its native token. Since 6 February 2024 the network has run without a full outage, a streak that passed 30 months in August 2026, after a history of repeated halts between 2021 and 2023.
What Solana does differently
Everything on one layer, as fast as the hardware allows, which is a fundamentally different bet from Ethereum's decision to keep the base chain small and push volume onto rollups that settle back to it.
By pushing activity to Layer 2 networks that settle back to it, Ethereum scales. By making the base chain itself fast, Solana does, which means higher hardware requirements for validators and no rollup layer for most users to think about.
The result is sub-second block times and fees that typically run fractions of a cent. The trade-off is fewer validators, roughly 800 by early 2026 against a peak above 1,300, and a longer history of network stress.
How Solana works
Three mechanisms. Working together.
Proof of History timestamps transactions cryptographically before consensus, so validators agree on ordering without waiting to communicate. This is Solana's original contribution and the source of its speed.
Proof of Stake selects validators weighted by stake. Roughly 65% of SOL supply has been staked in recent years.
Parallel execution processes transactions that do not touch the same state simultaneously rather than one after another.
Alpenglow, the consensus overhaul in testing through 2026, replaces both Proof of History and the existing Tower BFT voting with two new protocols. It targets finality of roughly 150 milliseconds, down from about 12.8 seconds, and was being tested for Q3 2026 mainnet activation as of early September.
Solana's outage history
| Period | What happened |
|---|---|
| 2021 to 2023 | Multiple full network halts requiring coordinated validator restarts |
| 6 February 2024 | The last full-cluster outage |
| February 2024 to August 2026 | More than 30 consecutive months without a network-wide halt |
| 12 August 2026 | A routing failure at one infrastructure provider took 28.83% of staked SOL offline. The network kept producing blocks and did not halt |
Two things changed. Firedancer, an independent validator client written by Jump Crypto, went live on mainnet in December 2025 and was running on 207 validators by mid-2026. Before it, every validator ran a single codebase, so one bug could halt everything. And the August 2026 incident, which came within reach of the one-third threshold that would have stopped the chain, demonstrated that the network now degrades rather than stops.
SOL's supply and tokenomics
- No hard cap. New SOL is issued as staking rewards on a declining schedule.
- Inflation. Started at 8% annually and decreases 15% per year toward a long-term floor of 1.5%.
- Fee burn. Half of every transaction fee is destroyed, offsetting part of issuance.
- Launch. March 2020 at around $0.22. All-time high near $260 in November 2021. Fell to roughly $8 after the FTX collapse, since FTX and Alameda were major SOL holders.
That last point is the risk history worth knowing. The asset's largest drawdown came from counterparty exposure rather than a network failure.
What Solana is used for
- Memecoins and token launches. The Solana memecoin category held roughly $3.78 billion in mid-2026, and launchpads like Pump.fun created around 12 million tokens on it.
- Stablecoin payments, where sub-cent fees make small transfers practical.
- DeFi, including decentralized exchanges and lending.
- NFTs and gaming, where transaction volume matters more than per-transaction value.
- ETF exposure, since spot SOL ETFs launched in the US.
The risks of Solana and SOL
- Client concentration is improving, not solved. Most validators still run the Agave client.
- Hardware requirements limit who can validate, which is the decentralization trade-off for speed.
- Memecoin dependency. A meaningful share of activity comes from speculative token launches, which are cyclical.
- Alpenglow is a major consensus change and carries execution risk until it has run in production.
- Volatility. SOL fell from around $260 to roughly $8 in 2022 and has moved sharply in both directions since.
- Regulatory position. The March 2026 SEC-CFTC interpretation classified SOL as a digital commodity, which is administrative guidance rather than statute.
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Frequently asked questions
What is Solana used for?
High-volume, low-fee applications: memecoin trading, stablecoin payments, DeFi, NFTs, and gaming. Fees typically run fractions of a cent, which makes activity that is impractical on more expensive chains viable.
How is Solana different from Ethereum?
Through Proof of History and parallel execution, Solana scales the base chain directly. Through Layer 2 rollups, Ethereum scales. Solana has faster, cheaper transactions and fewer validators. Ethereum has a larger validator set and a longer track record.
Does Solana still go down?
Not fully since 6 February 2024. An August 2026 incident took 28.83% of staked SOL offline, and the network kept running. Between 2021 and 2023 it halted repeatedly.
What is Firedancer?
An independent validator client written by Jump Crypto, live on mainnet since December 2025 and running on 207 validators by mid-2026. Ending Solana's single-client dependency, it has processed over 1 million transactions per second in testing.
What is Alpenglow?
A consensus overhaul replacing Proof of History and Tower BFT, targeting roughly 150 millisecond finality. As of early September 2026, it was in testing for Q3 2026 mainnet activation.
Does SOL have a maximum supply?
No. Issuance follows a declining inflation schedule toward a 1.5% annual floor, and half of every transaction fee is burned.
Why did SOL crash in 2022?
As major SOL holders, FTX and Alameda Research forced heavy selling when they collapsed in November 2022. From a November 2021 high near $260, SOL fell to roughly $8.
Is Solana a security?
The March 2026 joint SEC-CFTC interpretation classified SOL as a digital commodity, not a security. As administrative guidance, it can be revised by a future commission.
