In a recent interview FTX founder and ceo Sam Bankman Freed was asked what the most underrated cryptocurrency is and his answer was Solana. Now, he said, this is because of all the bad press that Solana has received in recent months, bad press that even sam acknowledges was deserved. So this begs the question is sbf right about solana. today we are going to briefly explain what solana is bring you up to speed with some of the project's most important updates, and tell you why SOL may in fact be one of the most underrated cryptocurrencies. Let's see if Solana is about to go red or green.
If you're unfamiliar with Solana here's what you need to know. Solana was founded in 2017 by seasoned software engineer Anatoly Yakivenko. solana was built by solana labs, a software company based in the united states, and its ongoing development is coordinated by the solana foundation, a non-profit based in switzerland. the project raised around 25 million across various icons in 2018 2019 and 2020 and raised an additional 314 million dollars from various crypto vcs last year. solana's main net went live in the spring of 2020, though it is still technically in beta and it's not entirely clear when solana will enter full release. under the bonnet, the solana blockchain uses a novel proof-of-stake consensus mechanism that leverages a technology called proof of history that makes it possible to timestamp transactions. although the solana blockchain is currently secured by over 1900 validators transactions are processed by smaller groups of up to 150 validators called solana clusters. this centralization along with solana's sub-second block time makes it possible for its blockchain to process between 50 and 65,000 transactions per second making solana the fastest cryptocurrency.
Now SOL is solana's native cryptocurrency coin; it's used to pay for transaction fees, half of which are burned and the other half of which go to validators. on that note Solana's low fees are a part of why its blockchain has experienced so many outages. low fees have made it possible for bots and bad actors to spam transactions which clog up the network; more about that later. now, in addition to paying for fees SOL is used for staking, and though there is no minimum stake, the hardware requirements to run a validator are so high that anatoly says you need to use a data center. Luckily, delegation is possible with no minimum, stake staking rewards are currently around six percent per year for validators and delegators with a five-day lock-up.
Note that misbehaving validators are slashed. Staking SOL and interacting with Solana's ecosystem can be easily done using the phantom browser extension wallet, which has been downloaded over 2 million times on chrome-based browsers alone. while solana's popularity was initially due to its d5 protocols lately its nft projects have been luring hundreds of thousands of users to its blockchain every day.
It should come as no surprise, then, that according to crypto slam solana is the third biggest blockchain by NFT sales volume behind ethereum and flow. more recently, solana's ecosystem has been pivoting towards payments and blockchain gaming with the creation of products such as solana pay which continue to onboard new merchants and users. circle's USDC stablecoin has been at the center of this initiative, which makes sense given that solana is apparently USDC's official blockchain. now all of this is quite a deviation from solana's initial purpose, which was to become a Decentralized alternative to centralized stock exchanges like the nasdaq.
Hence why solana is FTX's de facto exchange chain. the last thing you need to know about solana is how its long-term transaction history is stored. we thought that solana's transaction history was still being stored by a decentralized storage Crypto called Arweave. Yet it seems that Solana recently switched its transaction history storage to Google BigTable. this makes the solana blockchain even more centralized than meets the eye.
