The present working model for the formation of the Solar System is called the protoplanet hypothesis. It is built on the main concepts of the nebular hypothesis, with added concepts based on new knowledge on fluids and states of matter. According to this hypothesis, the Solar System began with a fragment from an interstellar cloud composed mainly of hydrogen, helium, and trace amounts of the light elements. The fragments of the intersellar cloud then formed the dense central region of the solar nebula, which collapsed more rapidly than its outlying parts. As the solar nebula contracted, it rotated more rapidly, conserving its angular momentrum. It also grew by accretion as material continued to fall inward from its surrounding. This solar nebula eventually evolved into the sun.
Gravitational instabilities ruptured the thin disk into eddies, each containing many small particles which built up and accreted. As the accretion continued, larger asteroid-sized aggregates called planetisimals are formed, which orbited the center of the solar nebula. The planetisimals further grew in size due to the gravitational attraction they exert on to one another, forming moon-sized bodies that would later become planets.
The planetisimals differ in chemical composition, depending primarily on their initial distance from the sun as they are formed. As a consequence, the terrestrial planets formed near the central portion of the solar nebula, where the temperatures are high enough to vaporize all compounds in the dust except the high-temperature metallic and silicate minerals in the inner portion of the disk. The gas giants, on the other hand, formed in the outer disk which remained relatively cooler, allowing them to be rich in volatile, icy, and gaseous materials.