In this article, we'll look at the unique features and benefits that make Solana a viable option for enterprises. We’ll also look at real-world examples of companies that have successfully integrated with Solana, explore why existing blockchain projects are migrating to Solana, and how new Ethereum scaling solutions are finding value through the Solana Virtual Machine (SVM).
Why should I choose Solana?
Solana is designed for scalability as it delivers high transaction speeds, low latency, and affordable fees. It also focuses on optimizing on-chain storage, maintaining a high degree of decentralization, and minimizing environmental impact. In this section we'll cover:
Speed and Latency - How Solana achieves high transaction throughput
Transaction Fees - Predictability and affordability of transaction fees
State Compression - Optimize on-chain storage
Decentralization - How decentralized the network is
On Criticisms of Centralization - Addressing Common Problems with Centralization
Energy Efficiency – Solana’s approach to sustainability
speed and latency
For businesses, speed is of the essence. Slow transactions could hinder innovation and the practical use of blockchain technology. For example, problems can arise if transaction time delays exceed the waiting times users would expect when using traditional systems.
Solana is designed for high transaction throughput. It processes an average of 400 user-generated transactions per second (TPS) and can peak at over 2000 TPS. In terms of raw TPS (including voting transactions by validators to reach consensus), Solana averages about 4000 TPS. Solana 's theoretical upper limit is 710,000 TPS on a standard Gigabit network and 28.4 million TPS on a 40 Gigabit network . The network has the potential to reach such high speeds thanks to innovations like Firedancer , a new validator client created by Jump Crypto. For comparison, the average TPS for the Ethereum network (including all its sidechains) last month was approximately 42 TPS .
Unlike traditional blockchains that process transactions one at a time, Solana's runtime system Sealevel is designed to process transactions in parallel. Sealevel achieves this goal by leveraging all cores available to validators. Solana's transactions explicitly specify all states they will interact with, which allows non-conflicting transactions to be processed simultaneously.
Proof of History (PoH) also helps improve Solana's speed. PoH is a cryptographic timestamping feature for transactions that allows nodes to agree on a sequence of events without having to communicate with each other. This speeds up transaction confirmation times without compromising security or scalability.
Solana excels in transaction finality, which is the time it takes for a transaction to be confirmed on the network. Solana's target slot time is 400 milliseconds. In fact, it can vary between 500-600 milliseconds depending on network needs, but is still faster than other leading blockchains. For example, in a deep dive into Solana, Visa analyzed blockchain confirmation times in blocks and seconds/minutes using data provided by Circle . Visa noted that USDC on Solana takes about 0.4 seconds and 1 block to confirm on average. In comparison:
USDC and EUROC on Avalanche take approximately 2 seconds and 1 block to confirm
USDC on Stellar takes about 5 seconds and 1 block to confirm
USDC, EUROC and ETH on Ethereum take ~3 minutes and 12 blocks to confirm
Bridging USDC on Polygon takes approximately 30 minutes and 372 blocks to confirm
Not only is Solana fast, it outperforms all other blockchains in terms of transaction finality.
transaction fee
Solana's transaction fees are very low, typically less than $0.001 , with average no-vote fees ranging from 0.000005 to 0.00007 SOL . At a SOL price of $23.75, this is roughly equivalent to $0.000119 to $0.00168.
What makes Solana unique is the predictability of its fees. The network uses localized fee markets to manage demand, ensuring that only transactions trying to access specific high-demand states will see fee increases. This localization differs from gas-based networks such as Ethereum, where users collectively paid over $150 million for failed transactions during past periods of high demand. Solana maintains low fee levels by isolating congestion situations and creating localized fee markets based on state contention areas, rather than using a global fee market.
Solana offers low and predictable fees.
state compression
Solana’s ledger is a historical record of all transactions since the network’s inception. State refers to a dynamic snapshot of the ledger, adaptable to real-time operations such as transfers and program execution. State compression is Solana's way of optimizing on-chain storage by using cheaper ledger storage space. Unlike traditional compression, Solana converts large amounts of ledger data into cryptographic hashes. This hash is stored on-chain in state using a specialized data structure called a concurrent Merkle tree . This data structure allows for rapid updates and verification based on a secure record of recent changes, called a change log.
This approach is cost-effective because it allows developers to use cheaper ledger storage instead of more expensive account-based storage. State compression brings innovative use cases, such as enabling Dialect users to share NFT stickers at scale, and DRiP airdropping free collectibles to thousands of users every week. Messari noted that nearly 45 million compressed NFTs were minted on Solana in the third quarter of 2023.
This unique approach to optimizing on-chain storage provides unique advantages that are only available with Solana.
Decentralization
Solana is one of the largest Proof-of-Stake (PoS) networks in the world by number of nodes. It is considered one of the most distributed networks, with its degree of decentralization quantified by the Nakamoto coefficient , which is a measure of the minimum number of entities required to disrupt the network. As of March 2023, Solana's Nakamoto Coefficient is 31, according to the Solana Foundation .
The network is validated by nearly 2,000 nodes located in more than 40 different countries, with different hosting arrangements in different locations. According to data from Solana Beach , at the time of writing, there are currently 1,965 validator nodes securing the network. Solana Beach currently has a lower Solana Nakamoto coefficient of 22, but this is still one of the highest on the market.
Diversity of validator clients is another factor that increases network resiliency. A validator client is an application used by validators to participate in consensus by proposing and proving blocks. Diversity of validator clients increases the network’s resiliency, as a bug or vulnerability in one client will not cripple the entire network. Solana has launched a validator client developed by Solana Labs. Since then, there have been some independent efforts to create additional full or lightweight validator clients:
Jito Labs - Released second validator client to mainnet in August 2022. It is a fork of the Solana Labs client, maintained and deployed by Jito.
Firedancer - A standalone validator client developed in C++ by Jump Crypto. In the test, the original TPS processing capacity of the client can reach 1.2 million, and the processing capacity after deduplication can reach 600,000
Sig - An intelligently optimized Solana validator client written in Zig. The client is still under development, but its progress can be monitored here
TinyDancer - An open source light client implementation of Solana. As light clients, their goal is not to produce blocks and participate in consensus. Instead, TinyDancer aims to make it easier for users to verify the state of the blockchain without having to run a full node themselves, claiming to be Solana's first light client
On the Centralization Criticism
Solana has faced criticism for its degree of decentralization and has earned nicknames such as "SQLana." These criticisms often focus on Solana's architecture and governance, rather than the network's degree of decentralization. For example, Solana's initial close association with FTX was considered a point of centralization. However, this ignores the fact that FTX has also made significant investments in other blockchain projects, suggesting that FTX’s commitment to the blockchain ecosystem is broader than these criticisms convey.
Solana has faced scrutiny over past network outages, raising questions about the network's resiliency. In response, Solana implemented several upgrades to strengthen its network . For example, Solana has had no downtime related to spam or DDoS attacks since adopting QUIC and has maintained 100% uptime for the past eight months .
The network’s high hardware requirements for validators are also cited as a potential issue that could lead to its concentration around a few well-funded entities. To address this issue, Solana’s 1.16 update to the Solana Labs validator client significantly reduces RAM requirements, making it easier for various participants to run validators.
This is because Solana previously relied on the validator's RAM to index accounts, but now reconfigures the account index to the validator's disk by default. Yanshu from Luganodes reports that since the release of the 1.16 update, their validator is running smoothly on only about 39 GB of RAM, compared to about 120 GB of RAM in the previous version:
By addressing these issues, Solana continues its efforts to increase the decentralization and resiliency of its network.
efficiency
Common criticism of blockchain technology focuses on its high energy consumption. The competitive nature of the Proof-of-Work (PoW) blockchain has given rise to large-scale Bitcoin mining farms , which has had an adverse impact on the environment. For example, a Bitcoin transaction consumes an average of 5 billion joules of energy. Projects such as Ethereum have recognized these environmental issues and transitioned from PoW systems to Proof of Stake (PoS) through a process called "merging." This shift resulted in a 99.84% reduction in the energy consumption of the Ethereum network . Even after this shift, Ethereum transactions still consume about 144,000 joules on average.
In stark contrast, Solana is very energy efficient. The average energy consumption per transaction on Solana is only 658 Joules. The average energy used per non-voting Solana transaction (that is, a user-generated transaction) is only 7568 Joules. To put it in perspective, a single Solana transaction consumes as much energy as several online searches. This uses less energy than fully charging an iPhone or leaving an LED bulb on for an hour.
The Solana Foundation is committed to neutralizing Solana's carbon impact. Solana is the first Layer 1 blockchain with real-time energy emissions tracking . Emissions tracker software is embedded directly on Solana nodes, providing dynamic and detailed metrics that are free to access. These indicators include RPC node emissions, emissions granularity, marginal (or indirect) emissions, embodied emissions, and power usage effectiveness (PUE). The Solana Foundation encourages all projects and validators to examine their emissions data and adopt mitigation strategies. For example, Orca created the Orca Climate Fund (OCF) , a community-driven initiative to promote climate sustainability.
OCF is not an isolated effort; Solana has a growing climate-focused ecosystem. Some notable climate-focused projects on Solana include:
GainForest - A Swiss non-profit using transparency with Solana and AI to help fight deforestation
WaterDAO - a water credit verification agency working towards a more decentralized and regenerative water infrastructure
Sunrise Stake - A regenerative finance dApp designed to strengthen the Solana blockchain while using staking rewards to offset carbon emissions
As stewards of technological progress and environmental sustainability, we have a responsibility to support and invest in solutions that are consistent with these values. Solana's commitment to energy efficiency is a model worth considering - it offers a carbon-neutral blockchain solution with an annual carbon footprint of 9,579 tons of CO2 and a net carbon impact of zero. This commitment to energy efficiency is deeply embedded in the core architecture of the network, making it a compelling choice for environmentally conscious businesses.
Solana Licensing Environment
For businesses that need to comply with certain regulatory guidelines or compliance requirements, blockchain offers a flexible solution. A blockchain does not have to be a large, permissionless network. Instead, enterprise blockchains can opt for permissioned blockchains, where a shared and immutable ledger is used and can only be accessed by authorized members. Network members can control what information each organization or member can see and the actions each organization or member can take. In this environment, business partners do not have to trust each other. Trust is built into the blockchain’s design, providing greater transparency and verifiability.
While blockchain has the potential to deliver cost efficiencies by simplifying change and automation, it’s worth noting that actual cost savings may vary based on specific use cases, existing infrastructure, and many other factors related to operational costs. Nonetheless, blockchain has the advantage of reducing clerical errors, paperwork, and other administrative expenses.
Solana Licensed Environment (SPE) brings the power of Solana to enterprises with customized needs. Here, businesses can run their own instance of Solana in a dedicated environment, tailoring all the benefits of Solana to their specific needs. SPE offers high throughput, parallelization, affordable fees, fast settlement times, and low environmental impact.
Solana comes with a native set of innovations, eliminating the need for third-party tools. This includes state compression, support for the Solidity programming language, programming methods for bridging across different blockchains, and built-in support for zero-knowledge proofs. Solana's new token standard Token22 introduces multiple functions such as confidential transfers and transfer pegs, further enhancing enterprises' ability to build SPEs.
VISA: Why companies choose Solana
The growing interest in blockchain technology in payments and digital currencies is evident from the institutional and corporate sectors. Visa was one of the first major payment networks to experiment with stablecoin settlement on Ethereum, recently expanding its pilot program to include issuer and acquirer partners as well as Solana. According to Visa's own analysis , Solana is "a blockchain whose innovative design enables it to process more than 2,000 transactions per second."
In Visa’s comprehensive review of Solana , they outlined the network’s payment potential and the success of Visa’s stablecoin settlement pilot. In their comments, they noted, “[Solana] has the potential to enable payments due to its speed, scalability, and low transaction costs, which helps make it a good candidate for efficient blockchain settlement rails using stablecoins like USDC. ” The report also compared Solana’s capabilities with other leading blockchains, finding that Solana consistently scored the highest.
While Solana's current throughput cannot match Visa's own 65,000 TPS capability, it has the potential to exceed current limitations. Visa, a company responsible for transmitting $14.5 trillion in total transaction volume in more than 200 countries around the world , believes Solana is a "compelling payments value proposition."
Visa's interest in Solana is part of a broader trend of enterprise adoption. For example, Shopify has integrated with Solana Pay to provide millions of merchants with more dynamic and efficient payment options for their consumers. Discord has also added Solana integration for linked roles , a first for any blockchain. Google Cloud also runs a block generation validator on Solana .
As blockchain technology continues to evolve and the ecosystem grows, Solana's high throughput, low latency, low transaction fees, and parallel processing capabilities make it a worthy candidate for enterprises to consider integrating into their operations.
Helium: Why blockchain projects choose Solana
Existing blockchain projects are also choosing to migrate to Solana. This is the case with Helium , a decentralized LoRaWAN network that powers personal hotspots in more than 170 countries as well as 5G service in certain U.S. cities. Helium aims to create a decentralized wireless infrastructure to support Internet of Things (IoT) devices. To do this, they created a new protocol called LongFi, which combines the long-range capabilities of LoRaWAN with Helium's own blockchain. Users can purchase and host their own hotspots and receive tokens in exchange for providing nodes to the network. These nodes are similar to microcell towers, creating a point-to-point wireless network of small, low-power devices connected over long distances.
HIP 70 was proposed by the Helium core development team to improve operational efficiency by moving Helium from its own blockchain to Solana. The proposal states that this migration will enable the Helium ecosystem to achieve greater uptime, greater composability, and a faster user experience, while maintaining a high degree of security and low cost of use. The Helium community voted overwhelmingly in support of the proposal, and Helium migrated to Solana in April 2023.
During the migration process, Helium mints each hotspot as an NFT. This is only possible on Solana due to state compression; minting compressed NFTs is orders of magnitude more economically feasible than minting NFTs on any other network. Only on Solana can Helium migrate such large blocks of state without issue. Helium Foundation COO Scott Sigel described the migration as "no issues, nothing to report. It was boring! The migration was exactly what we were hoping for."
While migrating to Solana has many advantages, projects must consider the complexities and potential challenges involved in such a transition, including compatibility issues, community consensus, and the technical aspects of the migration process itself. This was a huge undertaking for Helium, requiring careful thought and a thorough migration process. Helium outlines the scale of this effort in their documentation and migration guide . Despite this, the Helium migration was a huge success and has greatly benefited the Helium community.
Helium's migration to Solana is not an isolated incident - yes, Helium's migration is the first of its kind and an amazing technical feat, but blockchain projects are choosing Solana.
For example, Maker is an Ethereum project through and through. Maker is an Ethereum token that describes itself as “the utility token, governance token, and recapitalization resource for the Maker system.” Maker aims to unlock the potential of decentralized finance by building an inclusive platform called the Maker Platform to achieve economic empowerment and equal access to global financial markets. The Maker Platform consists of MakerDAO "for managing Maker projects" and Maker Protocol "for building and promoting the use of DAI , the world's first fair currency and leading decentralized stablecoin".
Maker founder Rune Christensen caused quite a stir on Twitter in September when he proposed using a fork of the Solana codebase to start developing the Maker app chain:
In light of these developments, it’s clear that Solana is becoming an increasingly popular choice for mature blockchain projects looking to improve operational efficiency, scalability, and user experience. These developments highlight Solana’s reputation as a blockchain that can meet the diverse needs of established projects.
Eclipse: Why choose Solana for your new EVM solution
Despite its widespread adoption, Ethereum faces serious scalability issues that limit its transaction throughput and increase costs. To solve these problems, new Ethereum Virtual Machine (EVM) solutions are increasingly turning to Solana due to its unparalleled scalability and efficiency.
Eclipse is the new second layer solution for Ethereum, powered by SVM. Layer 2 (L2) is a collective term that describes a specific set of Ethereum scaling solutions. L2 is an independent blockchain that extends Ethereum and inherits Ethereum’s security guarantees. The goal of L2 is to increase transaction throughput without sacrificing decentralization or security.
In its Mirror article, the Eclipse team highlights several key advantages of using SVM over EVM:
Parallel processing - The Sealevel runtime allows for parallel transaction processing, which enables SVM to scale directly with hardware. This is beneficial as processors continue to add more cores at lower cost, while single-threaded runtimes (such as EVM) fundamentally do not benefit from lower costs per core
State Management - Unlike EVM where state growth becomes a bottleneck, Solana's approach to state management is more efficient. After each epoch (~2.5 days), the entire state is Merkleized (i.e., hashed into a Merkle tree), which is cheaper than the real-time Merkleization performed by the EVM.
Dynamic Account Access - In SVM, each transaction specifies all the state required for execution, eliminating the impact of state size on performance. This makes transaction processing more predictable and efficient
EVM Compatibility - EVM compatibility via Neon EVM, the ability to compile Solidity smart contract code into SVM bytecode via Solang , and the ability to bootstrap users with MetaMask Snap are all huge advantages for bringing EVM users into non-EVM environments
Security - Solana's runtime protects against reentrancy , a common vulnerability plaguing EVMs that has cost projects and users millions of dollars in the past
Efficient ZK proof - Compared to EVM, SVM's register-based architecture and smaller instruction set make it easier to prove zero-knowledge proofs
Using SVM as a scaling solution for EVM makes a lot of sense - it scales better than other options, is more cost-effective, has higher performance, is easy to transition due to the number of compatibility features, and facilitates advanced encryption features Other current L2.
in conclusion
In today's rapidly evolving digital environment, businesses face countless challenges and opportunities. From scalability and efficiency to security and decentralization, the demands continue to increase. Solana is the only blockchain built for scale, designed to meet and exceed these needs. Its high throughput, low latency, and affordable transaction fees make it a no-brainer for any enterprise looking to integrate with blockchain. Combined with Solana's unwavering focus on environmentalism, robust security features, and the ability to create custom, permissioned environments, it's clear why Solana is the blockchain of choice for enterprises.
Whether you are an existing blockchain project (such as Helium), or a traditional enterprise looking to explore the benefits of blockchain (such as Visa), Solana is the perfect solution. Solana is unique in providing innovative features such as parallel processing and state compression in a single environment.
As blockchain technology continues to disrupt industries from supply chain management to election systems, the question is no longer "Why should I use blockchain?" but "Why shouldn't I use Solana?"
