What are the fundamental reasons behind Solana's resilience? What projects in the Solana ecosystem are worth paying attention to?

By Asher Zhang, Bitpush

We previously wrote an article in September titled "Why did Visa choose the 'rebirth' of Solana?" discussing why Solana has been able to remain resilient amid market fluctuations. With the recent surge in SOL price, it has further attracted the attention of the market. Coupled with the resolution of the FTX incident, Solana seems to be back in the spotlight. So, why did the FTX incident have such a direct impact on Solana? What are the fundamental reasons behind Solana's resilience? What projects in the Solana ecosystem are worth paying attention to?

FTX may reopen, and Sol rises with the momentum

With the temporary conclusion of the FTX case, on Thursday, November 9, FTX's token FTT suddenly surged by about 90%, from around $1.8 to over $3. At the same time, SOL also skyrocketed from around $40 to a high of $63.95, with an increase of about 60%. Why did FTT suddenly surge? What is the relationship between FTT's surge and SOL?

FTT's surge is mainly related to a statement by Gary Gensler, the chairman of the U.S. SEC, at the Washington, D.C. Fintech Week, where he said, "If Tom (former NYSE president, now leading a major bidding company trying to restart FTX) or others want to enter this field, I would say, do it within the framework of the law."

So, who is the background player behind taking over FTX? Last month, a banker who provided auction process consulting for FTX stated at a hearing that the company received interest from over 70 parties, but it was eventually narrowed down to three: the one mentioned by Gary Gensler is a cryptocurrency exchange Bullish operated by former NYSE president Tom Farley, and the other two are a financial technology startup Figure Technologies and a cryptocurrency venture capital company Proof Group. Bullish is a subsidiary exchange of Block, registered in Gibraltar, mainly targeting institutional clients, and currently not serving U.S. users. Figure Technologies provides financial services using blockchain technology, while Proof Group is a Silicon Valley investment group, which has won the acquisition of the bankrupt Celsius and is also an investor in Aptos and Sui.

Next, let's look at the relationship between FTX and SOL. FTX's largest holding is Solana (SOL), with approximately 55.8 million SOL, worth $11.62 billion, accounting for 10% of the total SOL supply. It is worth noting that most of FTX's SOL holdings are subject to a structured unlocking plan. According to the unlocking plan, 6.184 million SOL will be unlocked each month. It is worth noting that it is expected that 7.5 million SOL will be unlocked on March 1, 2025, accounting for 13.5% of FTX's total SOL holdings. The specific SOL unlocking plan for FTX is as follows:

From the perspective of the holding structure, if FTX undergoes bankruptcy restructuring, aside from FTT, SOL will undoubtedly be the biggest beneficiary. If FTX is simply liquidated, its SOL holdings will create significant selling pressure, suppressing the rise in SOL price. However, if FTX reopens, SOL will become FTX's most important crypto asset and resource. The acquirer of FTX will undoubtedly continue to collaborate deeply with SOL, driving SOL's development. With the increase in SOL's value, it will ultimately greatly help FTX overcome its financial difficulties.

Amid the cycle of bull and bear, countless projects have perished, so why has Solana remained resilient

With each cycle of bull and bear, a large number of projects collapse. On October 24, according to Bitpush, Parity Technologies, the development organization of the cross-chain king Polkadot, plans to lay off 30% of its staff, about 100 employees, despite once having many accolades. However, Solana has been continuously developing and achieving many accomplishments, which is also the deeper reason behind its strong price performance.

In April of this year, Solana launched a new feature for NFT storage called "state compression," which can reduce the cost of minting NFTs on Solana by 2,400 to 24,000 times. The cost of minting 1 million NFTs will be reduced from $250,000 to $110. In July, Solana released the GameShift API, aiming to better empower developers to develop Web3 games on Solana, simplifying their development difficulty. In the same month, the EVM-compatible solution Neon based on Solana officially launched its mainnet, followed by Solana releasing a Solidity-compatible smart contract compiler, aiming to further bridge the connection with the EVM ecosystem.

From late August to early September, Shopify and Visa announced their integration with Solana, expanding Solana's payment services in the Web2 world. In September, Rune Christensen, the founder of the Ethereum OG project Maker, publicly praised Solana, and some of the reasons he mentioned may also be the fundamental reasons for the significant increase in SOL price.

Why does MakerDao believe Solana is the most suitable public chain? On September 1, MakerDao founder Rune posted on the forum, stating that Cosmos is not built with efficiency as its core, which means that the cost of maintaining and preserving performance will be higher. As for public chains like Aptos and Sui, they are fundamentally unsuitable. Regarding the reasons for choosing Solana, Rune mainly put forward three points: first, the technical quality of Solana's codebase is very good, which is very consistent with NewChain's goal of solving Maker's technical debt; second, Solana already has two clients, which is crucial for flexibility. In addition, Solana's ecosystem has survived the FTX incident, proving the resilience of the public chain; third, there are already examples of Solana's codebase being forked and adjusted for application chains, which will help MakerDao build its own application chain in the future.

Opportunities in the Solana ecosystem

Recently, although Solana's token has increased by 4 times, its TVL has only doubled, mainly due to many projects in its ecosystem not issuing tokens. Many of these projects are worth paying attention to. In the past month, seven of the top ten TVL growth projects were launched within the past year.

From the above classification, it is clear that these projects contribute to creating a diverse ecosystem on Solana. According to TVL, the most successful project is Jito, which is a liquidity provider that offers liquidity staking and MEV rewards. Marginfi provides another liquidity staking token (LST) based on jitoSOL (Jito's LST), as well as a lending service focused on risk management. Among the projects not in the top ten, many have also performed well. Phoenix (a project from Ellipsis Labs) is a fully on-chain limit order book that seems to want to fill the gap left by Serum. Jupiter is an exchange and cross-chain bridge aggregator that has just launched a perpetual protocol on it. There are also many other types of projects. Tensor is Solana's response to Blur, and Squads is a multi-signature protocol used by most Solana projects, protecting over $500 million in funds.

In addition, Solana is also vigorously supporting ecosystem projects. In the just-ended third quarter, Solana has jointly organized and sponsored multiple hackathon events with other ecosystem partners, providing early-stage funding of millions of dollars to multiple outstanding teams.

Conclusion

The recent conclusion of the FTX case has directly stimulated the rise of Solana, but the more fundamental reason lies in Solana's underlying technology. Solana's core team has a background in high-tech companies such as Qualcomm and Google, and its history has proven that the Proof of History (PoH) algorithm has significant advantages in scalability, speed, security, and efficiency, which is also the reason why many people choose it as the underlying infrastructure. Looking at the future development space, due to the deep connection between SOL and FTX, if FTX reopens, SOL and FTX may once again enter a "honeymoon" period, mutually driving each other. From an ecosystem perspective, the overall TVL of new projects on Solana is relatively low, and the future development space is worth looking forward to.

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