SOL is the native cryptocurrency of the Solana blockchain. It serves multiple purposes within the Solana ecosystem, including paying transaction fees, participating in governance through staking, and serving as collateral. SOL can be staked to validators to help secure the network and earn rewards. The token has a capped supply and is used to pay for the computational resources required to run the network.
Glossary Term
SOL
The native cryptocurrency of the Solana blockchain, used for transactions and staking.
Beginner
Solana
Crypto Terminology
SOL: what is it?
Examples
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Paying transaction fees on the Solana network
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Staking to validators to earn yield
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Used as collateral in DeFi protocols
Common Use Cases
Securing the Solana network through staking
Governance participation in Solana's ecosystem
Trading and investment
Payment for NFTs and other digital assets on Solana
Pro Tips
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Store SOL in a non-custodial wallet for maximum security
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Consider staking your SOL to earn passive income
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Keep some unstaked SOL for transaction fees
Frequently Asked Questions
How do I stake SOL?
You can stake SOL through various wallets like Phantom, Solflare, or Solana Beach. Choose a validator, specify the amount to stake, and confirm the transaction. Staking rewards are automatically added to your stake. There's usually a cooldown period of a few days when unstaking.
What determines the price of SOL?
SOL's price is determined by market supply and demand across various exchanges. Factors influencing its value include Solana network adoption, overall crypto market trends, technological developments, institutional investment, regulatory news, and tokenomics (including inflation rate and token distribution).
How is SOL different from other cryptocurrencies?
SOL powers the Solana blockchain, which offers high throughput (thousands of transactions per second) and low fees compared to Ethereum. It uses a unique combination of Proof of Stake and Proof of History consensus mechanisms. SOL has a different tokenomics model than Bitcoin (which is deflationary) and serves as both a utility and governance token.