Author: flowie, ChainCatcher
Compared to the embarrassment of being caught in the FTX crisis last year, Solana was quite triumphant at this year's Breakpoint. Dan Albert, the executive director of the Solana Foundation, finally announced the launch of the Firedancer testnet to address the downtime issue, earning praise from various tech giants such as Georgios Konstantopoulos, Chief Technology Officer of Paradigm, and Raoul Pal, founder of Global Macro Investor. What's even more exciting is that during the conference period (October 30 to November 3), the token price of Solana reached a high of $45, setting a new record in 14 months, with an increase of over 80% in the past month. As of the time of writing, the price of the Solana token has fallen to $39.6.
Despite the significant surge, many crypto users joked about Solana's market manipulation every Breakpoint, with Arthur, the founder of DeFianceCapital, even quipping, "If opening Breakpoint is so effective for Sol's rise, Solana can open every week." However, we cannot deny that Solana's recovery is inseparable from the hard work of "post-disaster" reconstruction this year.
Last year, around the same time, shortly after the Breakpoint conference, ChainCatcher also wrote an article 《How Does Solana Deal with Internal and External Challenges after the FTX Crisis?》 documenting Solana before and after Breakpoint. At that time, Solana was in a sorry state, facing continuous downtime and unprecedented large-scale attacks on its ecosystem projects, as well as strong competition from new public chains Aptos and Sui in the crypto winter. Amidst unresolved challenges, Solana was also affected by the FTX collapse, with the token price dropping below $8, teetering on the brink of survival.
And now, after surviving the crisis, Solana is making a comeback, with various indicators showing growth and progress in its technical foundation and ecosystem development. As summarized in Messari's third-quarter Solana ecosystem report, "the development momentum is stronger than when it first entered the bear market." Perhaps more people are willing to believe that Solana, the "Ethereum killer," is writing a story of "the unkillable makes me stronger" as it is about to traverse two bull-bear cycles.
Looking at the DataSolana Fundamentals
While the significant increase in Solana's token price is inevitably influenced by institutional investors, various key indicators of Solana have indeed shown a warming trend. According to Defilama, Solana's TVL has reached $460 million, more than double the $210 million at the beginning of the year, currently ranking eighth in the public chain race.
More convincing than TVL is its DeFiVelocity (TVL utilization) data. DeFiVelocity evaluates the chain's activity and adoption based on the trading volume (DeFi Velocity) per dollar of TVL. According to Nansen's latest data, Solana's 7-day DeFi Velocity ratio (September 26-October 2) is 0.71, indicating that for every $1 of liquidity per week, the trading volume is close to $0.71. This ratio is higher compared to various other public chains such as Arbitrum, BSC, Base, Optimism, and Ethereum.
Looking at the daily active addresses and daily transaction volume, the active trading on Solana did not experience the expected significant decline after the FTX incident. Although the daily active addresses were briefly quiet in the early part of the year for about two months, there was a phase of peak activity around May and June, exceeding 500,000. The daily transaction volume also peaked in May and June, exceeding 25 million transactions. Overall, the transaction volume is also leading compared to Ethereum, Polygon, and Aptos. At that time, Bitcoin ecosystem protocols and meme coins were popular, leading to congestion and increased transaction fees on the Bitcoin and Ethereum networks, prompting many developers and users to choose the lower-cost option of trading on Solana.
Regarding developer activity, the collapse of FTX last year did not actually cause a large-scale exodus of Solana developers. In November last year, X platform users conducted a survey of the developer community, in which about 73% of developers believed that there was no need to leave Solana, and about 67% of developers chose to deploy exclusively on Solana.
Currently, according to data from the Solana official website, the number of active developers per month has exceeded 2,000, a significant increase compared to the 1,234 monthly active developers reported in the Solana Q2 report (as of April), showing a clear increase and gradually returning to the peak state of March this year. According to Electric Capital's developer report data, after the FTX incident, Solana's developer activity significantly increased in March, with 2,732 monthly active developers, but has since declined. The main reason for this is the significant changes in part-time developers, while the decrease in full-time developers is not significant.
Overall, the trauma brought to Solana by FTX did not destroy the solid fundamentals established by Solana in the previous cycle.
Multiple Boots on the Ground, Impressive Technological Breakthroughs
The long-discussed solutions for downtime and EVM compatibility have gradually made progress this year.
First is the highly anticipated Firedancer testnet launched on Breakpoint. Firedancer is a new generation node validation client introduced by Jump Crypto for the Solana public chain. As Solana's second client, it will reduce the single-point risk caused by a single client, increase the diversity of node clients, and improve the stability of the Solana blockchain, expected to increase Solana's throughput by 10-100 times.
Firedancer is the most anticipated infrastructure upgrade for Solana in the coming years. Solana co-founder Anatoly Yakovenko referred to it as a long-term solution to Solana's downtime, highlighting its importance. Since its launch in 2020, Solana has experienced at least five major interruptions, three of which occurred in 2022. The significant instability of Solana led ecosystem projects to suffer large-scale attacks and flee to new chains like Aptos and Sui.
The mainnet for Firedancer is expected to launch in 2024. However, it's worth noting that Delphi Digital analysts believe that the actual launch of Breakpoint will only include the network component Frankendancer for Firedancer. The full version of Firedancer may face significant challenges and may not be achieved until 2025.
In terms of downtime issues, network upgrades including QUIC, Stake-weighted QoS, and localized fee markets have improved Solana's network stability significantly this year compared to 2022. The Solana Q2 report stated that there was only one network interruption on February 25 (during the last software upgrade), and there have been no such issues since the improvement.
Furthermore, in addition to solving the downtime issue, the EVM ecosystem solution is also being implemented. In July of this year, the Solana EVM compatibility solution Neon finally went live on the mainnet, followed by the release of the Solidity smart contract compiler Solang, making it easier for developers to write Ethereum applications on Solana.
Additionally, during last year's Breakpoint, Solana announced the new anchor point GameFi, which has also made progress. During this year's Breakpoint, Solana also announced the launch of the GameShift game development tool, aimed at reducing the difficulty and complexity of developing games on the Solana blockchain.
In addition, Solana's Web3 phone Saga was also publicly released in May of this year, although the sales performance was not impressive, it represents Solana's early layout in the mobile entry.
After solving long-standing issues such as downtime, Solana has also made some impressive technological breakthroughs. In April of this year, Solana announced the launch of state compression. State compression is a new method of storing data that can reduce the cost of minting NFTs by over 2000 times. According to the Nansen report, through state compression technology, the cost of minting 1M NFTs has been reduced from $25,300 to $113, compared to costs of $33.6M and $32,800 on Ethereum and Polygon, respectively. Helium benefited from state compression technology during its migration to Solana in April of this year. During the migration process, nearly 1 million hotspots on the Helium network were minted as NFTs, which would have cost over $200,000 without compression technology, but only cost around $110 afterwards.
The ecosystem remains resilient
In addition to its technical advantages, Solana has always excelled in ecosystem construction. Despite a brief lull in the Solana ecosystem due to the crypto winter and the FTX scandal, this year, with technological upgrades, the Solana ecosystem unexpectedly welcomed giants of Web2 such as Visa and Shopify.
Around September, payment giant Visa announced the expansion of USDC stablecoin settlement functionality to the Solana blockchain. E-commerce giant Shopify also announced integration with Solana Pay, allowing its platform users to use USDC for payments. Visa also outlined the reasons for choosing Solana in its report, citing "Solana's unique technical advantages including high throughput parallel processing, low-cost localized fee markets, and high elasticity of a large number of nodes and multi-node clients." The addition of Visa and Shopify has brought a great start to the use cases in the Solana ecosystem's payment field.
In addition to the support of Web2 giants, top players and star projects in Web3 are also backing Solana. In particular, MakerDao founder Rune, at the risk of offending Vitalik, publicly stated in a post that after comparing numerous public chains, he believes Solana is the most suitable for being the NewChain. The L2 blockchain Eclipse's solution also embeds Solana's SVM (Solana Virtual Machine) and states that the network effect of SVM is also growing.
With the support of top players, Solana is also actively promoting ecosystem incentives. Throughout the third quarter, Solana not only hosted the Solana Hyperdrive hackathon with a million-dollar prize pool, but also participated in several hackathon events such as OPOS Hackathon, Hacker Houses, and PlayGG through sponsorship. Recently, Solana has also launched an incubator aimed at attracting founders to choose Solana for their startups.And this year in the Solana ecosystem, not only have prominent DeFi protocols like Marinade Finance, Lido, and Solend shown impressive growth, but also some dark horses such as Jito, marginfi, Ocra, Tensor, and Backpack have emerged, with the majority appearing in the liquidity staking sector. According to DeFilama's data, protocols with high Solana TVL have generally increased in the past month, with three protocols achieving over 100% growth, the highest being over 255%.
Shortly after the FTX collapse, the liquidity staking protocol Jito, which went live on the mainnet, saw its TVL climb from $4 million to nearly $200 million in a year, making it the second-ranked protocol in the Solana ecosystem, second only to Marinade Finance. Jito's feature is that it provides stakers with rewards not only from staking income but also from additional MEV rewards. According to the latest data from Solana, over 31% of Solana validators are running through the Jito Labs client. In addition, the DeFi margin protocol MarginFi saw a month-on-month TVL growth of over 700% in the third quarter, leading the development of incentive mechanisms in Solana DeFi. The perpetual contract trading platform Cypher and the Solana ecosystem lending protocol Solend subsequently introduced incentive mechanisms.
Recently, the Web3 integrated application Backpack in the Solana ecosystem has also been making frequent moves and is worth paying attention to. Backpack was the first to innovate the construction of Web3.0 wallets. Unlike other wallets, it allows developers to build permissionless asset management tools in a single interface through the revolutionary new standard xNFT, using request interfaces to implement new core functions to provide a more user-friendly experience for mobile clients.
Recently, Backpack also launched the NFT project Mad Lads, currently the highest valued NFT project on Solana, with sales exceeding the top 5 NFT series within 24 hours. Backpack also announced the launch of the regulated cryptocurrency exchange Backpack Exchange. The current Backpack Exchange has obtained a Virtual Asset Service Provider (VASP) license from the Dubai Virtual Asset Regulatory Authority (VARA) and will launch a beta version to existing Backpack and Mad Lads community members in November this year.
Related reading: "a16z Dialogue with Solana Co-founder: People Should Try to Create Greater Ideas Instead of Replicating Existing Ones"
Solana's "Goodwill" Behind the Scenes
Counting them up, during difficult times, Solana has no shortage of support from big-name fans. After the FTX collapse, industry figures such as Vitalik, MakerDAO founder Rune, Bankless founder, Placeholder VC partner Chris Burniske, as well as industry giants in Web2 like VanEck and payment giant Visa, have all shown strong support for Solana.
And if you look closely at the reasons given by each supporter, most of them point directly to Solana's technical strength and community vitality, and they are even more optimistic about Solana after FTX's collapse. Shortly after the FTX collapse, Vitalik Buterin tweeted that he hoped the Solana community would have a fair chance to thrive. This is because someone smart told him: Solana is a serious and smart development community, and now those terrible, opportunistic people have been washed away." And this "smart person," Placeholder VC partner Chris Burniske, also took the opportunity to explain the specific reasons for his support, such as the fact that the Solana community has staunch and hardcore developers, and compared to Ethereum and Cosmos, Solana's on-chain innovation is more independent.And "in terms of the ecosystem, the Dapp builders on Solana are more like a hybrid of Web2 and Web3, with a highly encrypted backend operation and the ability to communicate with the mainstream on the front end." Rune, the founder of MakeDao, favors Solana for its high code quality and the resilience of its ecosystem even after FTX's collapse. VanEck's more direct report expresses optimism about Solana, comparing it to Ethereum in various aspects such as ecosystem applications and revenue. VanEck believes that "Solana's community has a strong sense of identity, which has enabled it to maintain resilience in the face of significant setbacks, even though these setbacks may have destroyed many other blockchain ecosystems." The ups and downs of Solana may be telling us that in the brutal elimination game of Web3, maintaining "resilience" through continuous innovation and major setbacks makes you stronger and unbeatable.免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
