How Many Solana SOL Coins Are There In Circulation?

How Many Solana Coins Are There?

Solana's coin, also known as its native token, is the Solana SOL. Currently there are 339 million Solana SOL in circulation as of May 2022, and 522 million fully-diluted SOL. At $50 per SOL, that implies Solana has a market capitalization of $17 billion, and a fully-diluted market capitalization of $26 billion.

Various sites on the internet show total Solana circulating supply, market capitalization, and inflation rates. It's important to note that the methodology can vary by site, so numbers may not match up perfectly. One of the best resources to get current and accurate information is SolanaBeach.io. Other sites that track Solana coin supply include CoinGecko, CoinMarketCap, and Solana Explorer.

Solana Coin Circulating Supply Since Inception

Source: Messari

The chart above shows the number of Solana SOL in circulation since inception. The number of Solana SOL in circulation jumped at the beginning of 2021 when the locked tokens owned by investors, validators and service providers entered circulating token supply. Early investors had lockup agreements that prevented them from selling their Solana SOL prior to that date.

Solana Token Inflation Schedule

Source: Solana

Solana's coin is inflationary, which means that the total supply of SOL tokens increases every year. Inflation rates in early years are higher - around 8%, and the annual inflation rate gradually decreases through year 10 to 1.5%.

Token inflation is an easy concept to understand. If a token's supply is 100 and the inflation rate is 5%, that means the token's new total supply will be equal to 105 after one year.

In crypto there is a lot of talk about inflationary and deflationary coins. Deflationary coins are tokens that reduce the overall supply every year.

All fiat currencies, such as the US dollar and Euro, are inflationary currencies. The long-term median inflation rate for the US dollar is about 3.5%. Solana's long-term inflation rate is 1.5%, which is below the US dollar long-term inflation rate. All else equal, the price of Solana SOL tokens should appreciate relative to US dollars given the difference in long-term inflation rates.

The Solana blockchain offsets inflation with deflationary factors such as burning tokens related to transaction fees. As of May 2022, 50% of Solana SOL transaction fees are burnt. Burning SOL tokens means that the tokens are destroyed, and the overall circulating supply of SOL tokens is reduced by this amount. As the number of transactions increases more SOL tokens will be burnt.

After one considers the deflationary offsets mentioned above, Solana SOL could theoretically become a deflationary token in the future when the annual inflation rate is lower - there could be enough network transaction fees burning SOL tokens to offset inflation and make it deflationary.

Crypto tokens follow the economic rules of supply and demand. When supply goes up, the price goes down. When supply goes down, the price goes up. All else equal, lower inflation rates are better for the price of SOL. As the annual inflation rate of SOL tokens goes down, the price of SOL could rise at a greater rate. It's also important to consider the demand for SOL will likely continue increasing as more people use SOL for NFTs, GameFi, Solana Pay and other decentralized apps.

Other blockchains such as Bitcoin have a maximum supply quantity. Bitcoin has a maximum supply of 21 million Bitcoins. After those Bitcoins are created, there is no new supply. Solana SOL does not have a maximum quantity.

Who Owns Solana SOL?

No single person or entity owns all of Solana. Accounts that hold Solana SOL have a stake in the network and can determine the future of the network.

Solana's initial token distribution was approximately:

• Community tokens comprise 39% of the total token supply.
• Seed tokens comprise 16% of the total token supply.
• Team tokens comprise 13% of the total token supply.
• Founding tokens comprise 13% of the total token supply.
• Foundation tokens comprise 10% of the total token supply.
• Validator tokens comprise 5% of the total token supply.
• Strategic tokens comprise 2% of the total token supply.
• CoinList Auction Sale tokens comprise 2% of the total token supply.

Since then, the distribution has broadened as investors and team members sold their stakes to the public.

Initial Token Allocations For Public Blockchains

Source: Messari

Distribution of Solana SOL by Account Balance

Source: Solana

As of May 2022, there are approximately 9.2 million Solana accounts with a SOL balance. Approximately 84% of Solana accounts have a balance less than 0.1 SOL. 13% of Solana accounts have a balance of 0.1 to 10 SOL, and 3% of Solana accounts have a balance of more than 10 SOL.

Approximately 3,682 of the largest accounts (less than 0.1% of total accounts) with balances above 10,000 SOL control 88% of the total diluted supply.

This statistic might sound concerning since Solana is meant to be decentralized. The number is not as concentrated as it seems at first glance. The statistics treat validators as a single account. Validators have staked 385 million (74% of total diluted supply). Also, a large share of SOL not in circulating supply is held by the Solana Foundation. The Solana Foundation releases tokens into circulation for various community, partnership, grant, exchange, and fundraising activities.

Total Value Controlled By Account Size

Source: Solana. View the data at Airtable.

Solana SOL Top 10 Largest Accounts

Circulating Supply Versus Fully-Diluted Supply

Circulating supply is the amount of Solana SOL tokens available to be bought and sold. A quantity of the Solana SOL tokens are locked, and they cannot be bought and sold. These locked tokens are held by Solana Labs , Solana Foundation , team members, and early investors.

The locked Solana SOL tokens will enter the the market at various points in the future when the lockup agreements expire.

Most sites reference the circulating supply when calculating the market capitalization. It is better to referene the fully-diluted supply because the locked tokens will eventually become available to the public in time.

What Is The Solana Tokens List?

The Solana Tokens List is a public GitHub repository that includes over 9,000 Solana SPL Tokens. The Solana Tokens List is open-source, which means that anyone can contribute to it and add their token. The tokens on the Solana Tokens List are not endorsed or verified by a centralized party, so you should always be careful when referencing it.

The Solana Tokens List may be phased out in time in favor of more organized alternatives. The Solana community has discussed various solutions to implement in the near future.

Understanding Terms

When you read about crypto tokenomics, you will see many different terms. Below is a list of terms to help you understand what they mean.

Circulating Supply

Circulating Supply is the number of tokens that are currently unlocked and in accounts outside of the control of the Solana Foundation or Solana Labs.

Total Supply

This is the total amount of tokens (locked and unlocked) that have been generated minus any tokens that have been burnt or slashed.

Burned Tokens

Tokens that have been locked indefinitely and removed from the circulating and total supply, either manually or through transaction fees.

Inflation Rate

The Inflation Rate is the annualized growth rate of the Total Current Supply at any point in time. The Solana protocol will automatically create new tokens on a predetermined inflation schedule.

Inflation Schedule

The Inflation Schedule is a predefined amount of token issuance over time. For example, 8% in Year 1, 1.5% in Year 10, etc.

Staking Yield

The Staking Yield is a rate of return (also known as interest) earned on Solana SOL staked with validators. Staking yield is often quoted as an annualized rate. Learn more about staking and liquid staking SOL on Solana.

Token Dilution

Token Dilution is the change in value of tokens when new tokens are supplied with inflation. For example, let's say Bob owns 10 tokens and total supply is 100. If the total token circulation were to double to 200, then the dilution would be 50%. Bob's ownership went from 10% to 5%.

Resources

Solana Docs
Solana Transparency Report
What Is Solana?