Solana (blockchain platform)
Based on Wikipedia: Solana (blockchain platform)
In January 2025, something unusual happened. The price of a cryptocurrency called SOL shot up to nearly three hundred dollars, approaching its all-time high. The cause? A newly inaugurated American president had just launched his own digital token, and he'd chosen to build it on a platform called Solana.
This is a story about speed, crashes, billions of dollars, and the peculiar way that technology and politics have become intertwined in the age of cryptocurrency.
What Solana Actually Is
To understand Solana, you first need to understand the problem it was trying to solve.
Imagine a giant ledger book. Every time someone sends money to someone else, a new line gets written in this book. Now imagine that instead of one person keeping this book, thousands of computers around the world all keep identical copies, constantly checking each other's work to make sure nobody cheats. That's essentially what a blockchain is: a shared record of transactions that no single person controls.
The most famous blockchain, Bitcoin, processes about seven transactions per second. Its main competitor, Ethereum, handles around fifteen. For context, Visa's payment network processes roughly twenty-four thousand transactions per second during peak times.
This is the bottleneck that has plagued cryptocurrency since its inception. The very thing that makes blockchains trustworthy, having thousands of computers verify every transaction, also makes them painfully slow.
Solana's pitch was simple: what if we could make a blockchain that runs almost as fast as traditional payment systems, without sacrificing the decentralized nature that makes cryptocurrency interesting in the first place?
The Founders and Their Bet
Anatoly Yakovenko spent years working at Qualcomm, the company that designs chips for smartphones. He understood something important: the fundamental problem with blockchains wasn't computing power. It was time.
Specifically, it was the problem of getting thousands of computers to agree on what order things happened in. When you're trying to record transactions, sequence matters enormously. If Alice sends Bob ten dollars, and then Bob sends Carol five dollars, that's very different from Bob trying to send Carol money before Alice's payment arrives.
Traditional blockchains solve this by having computers take turns proposing batches of transactions, then waiting for everyone else to verify them. It works, but it's slow, like a committee that can only move forward when everyone raises their hand.
Yakovenko's insight was to create a cryptographic clock, a way for every computer in the network to independently verify when something happened without having to ask anyone else. He called this "proof of history." Combined with other technical innovations, this allowed Solana to process transactions much faster than its competitors.
In 2018, Yakovenko teamed up with Raj Gokal to found Solana Labs in San Francisco. The network went live in March 2020, with its first block created on the sixteenth of that month, just as the world was shutting down for the pandemic.
The Spectacular Rise
What happened next was extraordinary even by cryptocurrency standards.
In June 2021, Solana Labs announced it had sold three hundred fourteen million dollars worth of SOL tokens to a group of investors led by Andreessen Horowitz and Polychain Capital. These weren't small players. Andreessen Horowitz, often called "a16z" in Silicon Valley circles, had made early bets on Facebook, Airbnb, and Coinbase. When they put money into something, people paid attention.
The timing was perfect. A strange new phenomenon called NFTs, or non-fungible tokens, was sweeping through the art and entertainment world. NFTs are essentially digital certificates of ownership that live on a blockchain. You might own a JPEG of a cartoon ape, but what you really own is a record saying you own that particular JPEG, and that record is stored on a blockchain for anyone to verify.
Creating and trading NFTs requires lots of small transactions. On Ethereum, each transaction cost several dollars in fees, sometimes much more during busy periods. On Solana, the same transaction cost a fraction of a penny.
Artists, collectors, and speculators flooded in. By September 2021, Solana's market capitalization, the total value of all SOL tokens in existence, had surpassed sixty-three billion dollars. By early November, it hit seventy-four billion. The price of a single SOL token reached nearly two hundred sixty dollars, up almost twelve thousand percent from the start of the year.
The New York Times and Financial Times were calling Solana a serious alternative to Ethereum. It seemed like nothing could go wrong.
When Speed Becomes a Problem
Then the network started crashing.
On September 14, 2021, something unexpected happened. So many transactions flooded the network that different computers in the system started disagreeing about what had actually occurred. In blockchain terminology, the network "forked," meaning different validators, the computers that verify transactions, had different views of reality.
The network went completely offline. It stayed down for seventeen hours.
For a system designed to be trustless and always available, this was embarrassing. Imagine if Visa's entire payment network went dark for seventeen hours because too many people tried to buy things on Black Friday.
But this was just the beginning. On May 1, 2022, the network crashed again, this time for seven hours, overwhelmed by automated trading programs called bots. Thirty days later, another outage lasting four and a half hours, caused by a bug in how the system processed certain transactions. October brought yet another crash, six hours this time, triggered by a misconfigured computer that managed to publish conflicting information.
Each outage followed the same pattern: the price of SOL would drop, users would complain, the team would fix the immediate problem, and then, weeks or months later, something else would break.
The irony was painful. Solana's entire selling point was speed. But the same architecture that enabled blazing-fast transactions also made the system more fragile. When you're processing thousands of transactions per second, small problems cascade quickly.
The Hack, the Collapse, and the Lawsuits
If the outages were embarrassing, what came next was catastrophic.
On August 3, 2022, hackers drained approximately eight million dollars from over nine thousand Solana wallets. The culprit turned out to be a popular wallet app called Slope Finance, which had been storing users' private keys, essentially their passwords, in a way that attackers could access.
This wasn't strictly Solana's fault. The blockchain itself hadn't been compromised; a third-party application had made a security mistake. But for users who lost money, the distinction felt academic.
Three months later, disaster struck from an entirely different direction.
FTX, one of the world's largest cryptocurrency exchanges, suddenly collapsed in November 2022. Its founder, Sam Bankman-Fried, would later be convicted of fraud. But the immediate fallout hit Solana especially hard.
FTX and its affiliated trading firm, Alameda Research, had been major holders of SOL tokens. Alameda's second-largest position, in fact. FTX alone held nearly a billion dollars worth. When the company went bankrupt, those holdings had to be liquidated, flooding the market with SOL tokens just as confidence in the broader cryptocurrency industry was cratering.
The price of SOL dropped forty percent in a single day. By the end of 2022, Solana had lost more than fifty billion dollars in market capitalization since the start of the year.
Then came the regulators.
In June 2023, the Securities and Exchange Commission, the American agency that regulates financial markets, sued the cryptocurrency exchange Coinbase. Among the allegations: that SOL and twelve other tokens were actually unregistered securities.
This requires a brief explanation. In American law, a "security" is essentially an investment where you give money to someone else, expecting to profit from their efforts. Stocks are securities. So are bonds. Securities have to be registered with the government, and the people selling them have to follow strict rules about disclosure.
Cryptocurrency has long existed in a gray area. Are these tokens more like currencies, which aren't regulated as securities? Or are they more like shares in a company, which are?
The SEC was arguing the latter. If SOL was a security, then Solana Labs had been selling unregistered investments to the public, and exchanges like Coinbase had been facilitating illegal transactions.
The Solana Foundation, the nonprofit organization that supports the network, denied that SOL was a security. But the damage was done. The price dropped nearly thirty percent after the announcement. Several exchanges, including Robinhood, delisted SOL entirely to avoid regulatory trouble.
The Lawsuit Nobody Talks About
Even before the SEC got involved, private lawsuits were piling up.
In July 2022, a class action suit was filed against Solana Labs. The allegations were serious: that the company had sold unregistered securities, and that it had misled investors about how many SOL tokens were actually in circulation.
According to the lawsuit, Anatoly Yakovenko had secretly lent a market maker, a company that helps maintain trading activity, more than eleven million tokens in April 2020. This information wasn't disclosed to the public. The lawsuit claimed that while Solana had promised to reduce the total supply of tokens, it had only "burned," or permanently destroyed, 3.3 million of them, not the full amount that had been lent out.
Why does this matter? In cryptocurrency, as in any market, the value of something depends partly on how rare it is. If there are more tokens in circulation than investors think, each token is worth less than they believe. It's like discovering that a limited-edition print run was actually much larger than the artist claimed.
The Phoenix Rises (Sort Of)
By early 2023, things were looking grim. Solana's market capitalization had shrunk to around seven billion dollars, a ninety percent drop from its peak.
But then, slowly, the market began to recover. Cryptocurrency prices rose across the board, and Solana rose with them. The network, despite its history of outages, continued to function. Developers kept building applications on the platform.
In September 2023, Visa made an announcement that surprised many observers. The payment giant, along with processors Worldpay and Nuvei, was adding support for Solana. Merchants could now receive payments in a digital currency called USDC, a "stablecoin" designed to always be worth exactly one US dollar, sent over the Solana network rather than through traditional banking rails.
This was significant. Visa processes trillions of dollars in payments every year. Even a small endorsement from such a company suggested that Solana, despite everything, still had a viable future.
In November 2024, Robinhood reversed course and relisted SOL for American customers, a sign that the regulatory picture was becoming clearer, or at least that the exchange was willing to take the risk again.
The Presidential Memecoin
Then came Donald Trump.
In January 2025, the newly inaugurated president launched his own cryptocurrency token, called, straightforwardly enough, $TRUMP. He built it on Solana.
The price of SOL immediately surged, reaching a new all-time high of two hundred ninety-four dollars. Whatever you think about the wisdom of a sitting president launching a personal cryptocurrency, there's no denying its impact on Solana's fortunes.
But this presidential endorsement came with complications. In November 2025, Representative Jamie Raskin, a Democrat from Maryland, released a report from the House Judiciary Committee's Democrats. The report, titled "Trump, Crypto, and a New Age of Corruption," alleged that the president's cryptocurrency policies had been designed to benefit himself and his family. It claimed Trump had added billions of dollars to his net worth through cryptocurrency ventures that were "entangled with foreign governments, corporate allies, and criminal actors."
Much of Trump's cryptocurrency activity, the report noted, ran through Solana.
Whether these allegations will lead to legal consequences remains to be seen. But they illustrate how thoroughly Solana has become intertwined with American politics, a far cry from the apolitical, purely technical project that Yakovenko and Gokal set out to build.
The Smartphone Nobody Asked For
In an unusual move for a blockchain company, Solana Labs created a subsidiary called Solana Mobile and, in April 2023, released an actual physical product: the Solana Saga smartphone.
The Saga was an Android phone with several Solana-based applications preinstalled. The idea was to make cryptocurrency more accessible by integrating it directly into the device people carry everywhere. Instead of downloading apps and connecting wallets, users could manage their digital assets as naturally as checking email.
The phone received mixed reviews. Critics pointed out that you could achieve most of the same functionality by installing apps on any Android phone. Supporters argued that the integrated experience was smoother and more secure.
More importantly, the Saga represented Solana's ambition to be more than just another blockchain. The company wanted to build an entire ecosystem, from the underlying network to the device in your pocket.
What Solana Tells Us About Cryptocurrency
The story of Solana encapsulates nearly everything interesting and troubling about the cryptocurrency industry.
On one hand, there's genuine technical innovation here. The proof-of-history mechanism represents a real advance in distributed systems design. The network can process transactions at speeds that would have seemed impossible a decade ago. Serious financial institutions like Visa are integrating with it.
On the other hand, the history is littered with crashes, hacks, lawsuits, alleged fraud, and now direct entanglement with the most polarizing political figure in America. The same speed that makes Solana attractive also makes it fragile. The same openness that lets anyone build on the platform also lets scammers and political operators take advantage.
Perhaps most tellingly, Solana's value has tracked not with technical improvements or real-world adoption, but with speculative manias, celebrity endorsements, and the whims of large investors. When NFTs were hot, Solana boomed. When FTX collapsed, Solana crashed. When a president launched a memecoin, Solana soared again.
Is Solana a revolutionary technology that will transform finance? A speculative asset that rises and falls on hype? A platform for fraud and political corruption? A legitimate competitor to Ethereum that just needs time to mature?
The honest answer is that it might be all of these things simultaneously. That's what makes cryptocurrency so fascinating and so frustrating. The technology is real, but so is the speculation. The innovation is genuine, but so is the grift. Understanding Solana means holding all of these contradictions in your mind at once, and accepting that the story is still being written.
What happens next depends on technical decisions that haven't been made yet, regulations that haven't been written, and market forces that nobody fully understands. The only certainty is that it will be interesting to watch.