Solana Celebrates Fifth Anniversary with 408 Billion Transactions, $987B DEX Volume

Solana, a prominent Layer-1 blockchain, is celebrating its fifth anniversary since the first Solana block was built on March 16, 2020. Founded in 2017 by Anatoly Yakovenko and Raj Gokal under the brand name Solana Labs, the blockchain's Mainnet was launched in 2020, pioneering the Proof-of-History (PoH) concept. Yakovenko, a former Qualcomm engineer, aimed to create a high-speed, low-cost, and scalable network that could rival traditional financial systems. Today, Solana boasts of enabling 408 billion transactions with nearly $987B DEX Volume, supported by 1300+ validators.

Solana's journey has been marked by several breakdowns and breakthroughs. In July 2019, Solana received $20 million in funding led by Multicoin Capital, one of the earliest and most influential investors in the blockchain. Multicoin Capital recognized Solana’s potential early on and played a key role in its rise. However, the venture capital firm was heavily exposed to FTX and Alameda Research, both of which were deeply intertwined with Solana. When FTX collapsed in November 2022, SOL’s price plunged, and Multicoin too suffered major losses. Despite this, they remained committed to Solana, citing its strong developer ecosystem and technology.

Solana's network instability, characterized by recurrent outages, has been a significant challenge. Unlike Ethereum’s Layer 2 scaling solutions, Solana processes all transactions on a single layer, making it vulnerable to spikes in demand. High transaction per second (TPS) and bot activity attracted bots that flooded the network with spam transactions, overwhelming validators and creating a history of network outages. Since its launch, the blockchain suffered multiple downtimes, including a 17-hour outage in September 2021 due to excessive transaction load. In May 2022, it suffered a 7-hour outage due to NFT minting bots flooding the network with over 4 million transactions per second. In August 2022, Solana collaborated with Jump Crypto to develop Firedancer, a new validator client aimed at enhancing network efficiency and reducing downtime.

Solana earned the title of “Ethereum killer” due to its high throughput, low transaction costs, and developer-friendly ecosystem. It was seen as a strong competitor to Ethereum, addressing its scalability and congestion issues. Solana’s high-speed blockchain came as a game-changer for DeFi, NFTs, and gaming, making transactions nearly instantaneous compared to Ethereum’s slower confirmations. However, its narrative of being an “Ethereum Killer” received a significant setback during the FTX collapse in November 2022, which came as the biggest challenge for Solana when FTX and Alameda Research collapsed. As a major investor in Solana, Alameda held significant SOL tokens, and its bankruptcy sent shockwaves through the ecosystem. Solana’s total value locked (TVL) in DeFi dropped from over $10 billion to under $500 million, and its price plummeted by more than 90% from its all-time high of $260. Many assumed that Solana would struggle to recover, but the community and developers remained steadfast.

Solana (SOL) reached its all-time high (ATH) price of $259.96 on November 6, 2021, during the peak of the 2021 crypto bull run. In November 2024, Solana (SOL) broke its previous record to reach a new all-time high above $264, fueled by a prolonged market rally and optimism following Donald Trump’s re-election as US president. The success of Solana-based NFT projects like Degenerate Ape Academy and the rise of Magic Eden (a leading Solana NFT marketplace) brought massive demand to the ecosystem. On the DeFi front, Serum DEX, Jupiter Aggregator, Raydium, and Marinade Finance have driven Solana’s resurgence. Solana’s DeFi TVL surpassed $3 billion by early 2024, proving that it was more than just a speculative asset. Solana’s NFT ecosystem has also exploded, with marketplaces like Magic Eden and Tensor rivaling Ethereum’s OpenSea. Notably, the Mad Lads collection became a breakout success, reinforcing Solana’s dominance in the NFT space.

Solana found unexpected momentum through memecoins, particularly BONK and DogWifHat (WIF). BONK’s airdrop in late 2022 revived interest in Solana, while WIF’s meteoric rise in 2024 turned it into one of the top-performing tokens. These events demonstrated Solana’s ability to capture viral trends and engage retail traders. Its boldest move was in 2023 with Solana Mobile, which introduced the Saga phone—a Web3-native smartphone enabling seamless crypto transactions and NFT minting. The Chapter 2 mobile device, announced in 2024, promises to expand this vision, positioning Solana as a leader in mobile blockchain.

Solana has positioned itself as an alternative to Ethereum and BNB Chain, competing on speed, cost, and user experience. However, Ethereum’s Layer 2 networks (Arbitrum, Optimism) have narrowed the gap by improving Ethereum’s scalability. Meanwhile, BNB Chain’s recent dominance in DEX trading volume has also shown that competition in DeFi is heating up. The challenge for Solana is to maintain its unique value proposition—high-speed transactions with low fees—while ensuring network reliability.

As Solana enters its fifth year, the roadmap ahead looks promising. The full release of Firedancer is anticipated in 2025, with ongoing testing and development to ensure its robustness and effectiveness in enhancing Solana’s network stability. Anza, Solana’s main software development team, has unveiled a 2025 roadmap aiming to double the network’s blockspace. This initiative seeks to enhance transaction throughput, accommodating a growing number of decentralized applications (dApps) and users. The roadmap includes micro-advancements such as optimizing Agave’s scheduler, scaling the Turbine protocol, and adopting a faster hashing algorithm. These enhancements are designed to improve transaction handling and overall network performance. Recognizing the need for better data accessibility, the Solana Foundation plans to revamp the network’s read layer.

Solana’s journey from network outages and the FTX collapse to a vibrant DeFi, NFT, and memecoin ecosystem is one of the most dramatic comeback stories in crypto. While challenges remain, Solana has proven that innovation, a strong community, and a relentless focus on scalability and speed can drive long-term success. As the blockchain industry evolves, one thing is clear: Solana is here to stay with more anniversaries and birthdays to come and celebrate.