Company: FWDI
Filing Date: 2025-11-14
Form Type: 424B5
Source: 0001683168-25-008451
Chunk: 34

Company: Forward Industries, Inc.
Filing Date: 2025-11-14
Form: 424B5
Chunk 34
---
ana Improvement
Document 96.

How SOL is Used

SOL is used as part of Solana’s proof-of-stake
consensus mechanism. In general, proof-of-stake blockchains have block producers called validators that run nodes, bond or stake the protocol’s
native token, propose blocks when chosen to do so, and validate/sign the transactions and blocks of others when not. Validators are chosen
to produce a block in proportion to their stake, which makes it extremely costly for bad actors to attempt to control the network and
add invalid transactions to the blockchain. Validators receive staking rewards for the work they perform, which further incentivizes validators
to behave properly, as they would otherwise miss out on such rewards. Other proof-of-stake networks often “slash” some or
all of a validator’s stake if it intentionally or unintentionally performs its duties poorly, for example, by double-signing a transaction,
though Solana has not implemented slashing at this time. In addition to its use within consensus, SOL is also a “gas token”,
meaning that users of the Solana blockchain pay SOL to validators (and delegators) as compensation for processing their transactions.

We see three particularly notable items giving
Solana a technical advantage compared to many smart contract blockchain peers. Solana’s proof-of-history gives validators a notion
of time and allows them to produce blocks without requiring the network to first agree upon the current block, resulting in speed advantages.
Further, unlike peer blockchains that often use single-threaded virtual machines, Solana enables parallel transaction execution to increase
throughput and take advantage of future hardware improvements resulting from increased CPU core counts. In addition, Solana is optimized
for speed and security, and is naturally growing into decentralization as hardware and bandwidth costs fall over time, positioning it
well along the Blockchain Trilemma.

While Solana Labs and the Solana Foundation have
played important roles in the development of the Solana ecosystem, no single entity owns or controls the Solana network. However, concentration
of influence in these entities, particularly in early-stage protocol governance, presents risks that investors should consider.

The Solana Ecosystem

Solana’s performance and technical capabilities
enable many use cases from DeFi to decentralized physical infrastructure networks, AI agents, social media, gaming, stablecoins, real-world
assets, among others. We believe Solana is advantaged by best-in-class technology and strong network effects that have attracted a large,
growing, and vibrant ecosystem of users, developers