Liquid Stake with compassSOL for an 7.15% APY from staking, MEV + fees

Enjoy the freedom of liquid staking in Solana Defi while delegating your stake to the high performance Solana Compass validator. Stake or unstake at any time here, or with a Jupiter swap.

Benefit from our high staking returns and over 2 years experience operating a Solana validator, and receive additional yield from priority fees + MEV tips

Earn 6.8% APY staking with Solana Compass

Help decentralize and secure the Solana network delegating your stake to us and earn an impressive 6.8% APY yield on your SOL, while supporting us to create new guides and tools. Learn more

Stake your SOL

  1. Click to connect your wallet
  2. Enter the amount you wish to stake
  3. Kick back and enjoy your returns
  4. Unstake from your wallet or our staking dashboard

Earn 6.8% APY staking with Solana Compass

Help decentralize and secure the Solana network delegating your stake to us and earn an impressive 6.8% APY yield on your SOL, while supporting us to create new guides and tools.

Learn more

What is Solana? How Does It Work?

Published on 2020-10-06

Solana is one of the fastest and most functional web-scale projects that leverage the features of programmable blockchain technology to deliver Decentralized Finance (DeFi) solutions. Read on to learn why this cryptocurrency is making waves


What is Solana (SOL)?

Solana is one of the fastest and most functional web-scale projects that leverage the features of programmable blockchain technology to deliver Decentralized Finance (DeFi) solutions. The project’s protocol is:

  • Safe
  • Censorship-resistant
  • Fast
  • Scalable
  • Flexible

It adopts the flexibility of open-source infrastructure to create decentralized apps (DApps) and marketplaces for mass adoption.

Solana's developers state that it is the fastest blockchain globally, supports non-fungible and tokens (NFTs) smart contracts and other decentralized finance platforms. Solana currently has over 400 projects running on its ecosystem. The developers claim that SOL cryptocurrency supports 50,000 transactions per second (TPS) and 400ms Block Times.

Solana uses several ground-breaking computational technologies to handle thousands of nodes, enabling transaction throughput to grow proportionately with network bandwidth. The project adopts the proof of history and proof-of-stake (PoS) consensus mechanisms to improve scalability and throughput.

What's unique about PoS? Many computers (nodes) verify transactions in a decentralized blockchain system like Solana and Ethereum. A malicious actor may want to add a large number of nodes to gain control of the network. It’s possible to prevent this by having the computers solve complex mathematical equations, making any attack on the network rather expensive.

That method is what proof-of-work (PoW) uses; it is efficient, but the network consumes a lot of energy. An alternative approach is to have the network validator nodes stake something like the SOL tokens in Solana’s instance. Although these validators also require power to work, it is much less than Bitcoin or Ethereum miners.

Solana has gained popularity among small-time and institutional traders because of its unique hybrid consensus model. The Solana Foundation aims to DeFi accessible to users on a larger scale.

What is a Solana Cluster?

In general terms, a cluster refers to a group of computers working together simultaneously such that they appear to be a single system from the outside. The Solana Cluster refers to a group of validators working together to maintain the ledger’s integrity to attend to client transactions.

The Solana Cluster is an essential part of the Solana software. Every Solana cluster is a collection of individually owned computers that usually work together but compete against each other. These computers aid in the authentication of untrusted and user-submitted software output.

The cluster is also applicable when a user wishes to save an irreversible record of events or programmatic interpretations. It is possible to have several clusters coexisting; however, when two Solana clusters reside on the same genesis block, they attempt to merge.

Some of the technology's applications include tracking which computers completed the critical tasks that contributed to the cluster's continued operation. Another possibility is to keep track of real-world assets.

When separate Solana Clusters fail to converge, one can ignore the existence of the other. Nonetheless, as long as a copy of the ledger exists somewhere, the overall output of its programs is reproducible and utterly independent of the organization that issued it.

Why Solana is a Programmable Blockchain

Solana is a fast-growing programmable blockchain in the crypto marketplace currently. Many experts even consider it a potential successor to Ethereum (ETH). But why do experts refer to this project as a programmable blockchain?

A programmable blockchain is a tamper-proof, massive, decentralized global computer that functions as a ledger to record transactions. The result of the computation and transaction is accessible to everyone on the blockchain. It also allows people to send money and perform other transactions without involving a third party.

Programmable blockchains store codes in bits called smart contracts. Smart contracts allow users to create numerous automatic structures for business transactions.

These smart contracts are programmable to perform specific actions when users fulfill the terms of the contract. For instance, an insurance company can set up a smart contract to pay a farmers’ insurance when certain weather conditions prevail.

How Does Solana Work?

Solana works like Ethereum. It is a cryptocurrency platform for creating and running cryptocurrency apps, from the Serum decentralized exchange (DEX) to Degenerate Apes.

Solana is a high-performance permissionless blockchain with 200 unique nodes, generating a throughput of 50,000 TPS with GPUs. It is a third-generation, proof-of-stake consensus blockchain.

This proof-of-stake (POS) consensus model in Solana, the Tower BFT consensus, allows the network to reach an agreement regardless of the potential attacks that may result from malicious nodes.

The Tower BFT consensus also imposes a universal time source across the network, creating a uniform blockchain record of transactions and events. The system uses these records as permanent references for all the nodes using the network.

Related Content

Solana's History: When Was SOL launched?

Solana is one of the fastest and most functional web-scale projects that leverage the features of programmable blockchain technology to deliver Decentralized Finance (DeFi) solutions. Read on to learn why this cryptocurrency is making waves

Where to buy Solana: How to invest on an exchange or DEX

Solana is one of the fastest and most functional web-scale projects that leverage the features of programmable blockchain technology to deliver Decentralized Finance (DeFi) solutions. Read on to learn why this cryptocurrency is making waves

Solana (SOL) Explained: Your Guide To The Fastest Cryptocurrency

Solana is one of the fastest and most functional web-scale projects that leverage the features of programmable blockchain technology to deliver Decentralized Finance (DeFi) solutions. Read on to learn why this cryptocurrency is making waves

Building A World Free Of Currencies - Prophet (MetaDAO)

MetaDAO creator Prophet explores futarchy, decentralized governance, and a world without currencies in this in-depth discussion on the future of blockchain technology.

Validated | Does Blockchain Need Its Own Section 230?

Explore the implications of Section 230 for blockchain technology and the potential need for new legislation in the rapidly evolving digital landscape.

The State Of Solana In 2024 | Austin Federa

Explore the current state of Solana with Austin Federa, discussing economic security, meme coins, network growth, and the future of blockchain technology.

Services DAO that hosts AthensDAO (feat. Takisoul of Dean's List DAO) - Solfate Podcast #38

Explore how Dean's List DAO is revolutionizing decentralized services, building network states, and fostering community growth in the Solana ecosystem.

Will A Solana ETF Get Approved? | Matthew Sigel

VanEck's Head of Digital Assets Research discusses Solana ETF filing, crypto market dynamics, and the future of blockchain technology in finance.

Token Extensions and Solana's Long-Term Strategy with Austin Federa

Austin Federa discusses Solana's innovative token extensions, mobile strategy, and vision for the future of blockchain technology and adoption.

Validated | Crypto-Powered Physical Infrastructure with Sami Kassab

Explore how Decentralized Physical Infrastructure Networks (DePIN) are transforming traditional infrastructure models using blockchain technology and token incentives.

Why Solana DeFi Is Crypto's Biggest Opportunity | Ansem

Crypto trader Ansem explains why Solana DeFi is poised for massive growth, outlines his bullish thesis on SOL, and shares insights on the future of blockchain ecosystems.

Drift: Can This Solana DEX Compete With Binance? | Cindy Leow, Chris Heaney

Discover how Drift is building the future of decentralized finance on Solana, offering a unique liquidity trifecta and aiming to compete with centralized exchanges like Binance.

Fastest blockchain payments on Solana with Sphere Pay

Discover how Sphere Pay is transforming cross-border payments and remittances using Solana's blockchain technology. Learn about the challenges of correspondent banking and the potential of decentralized finance.

Write Solidity on Solana with Solang (feat. Sean Young, Solana Labs) - Solfate Podcast #31

Discover how Solang enables Solidity development on Solana, offering EVM developers a bridge to high-performance blockchain infrastructure.

Solana Changelog - Token Extensions and Transaction Size Fees

Explore Solana's latest developments including token extensions, transaction size fees, and the upcoming Mountain Dew 5 event in this comprehensive changelog.