“I will buy all the SOL you own at the market price of 3 US dollars now, sell it as you like, and then get out.” This is January 10, 2021, FTX founder SBF said to an unhappy person on Twitter The reply from a trader who is bullish on Solana is, “SOL is about to receive a huge buy order because every billionaire in the world is calling me and SBF (inquiring about Solana).” On December 1 of the same year, Kyle Saman, managing partner of Multicoin Capital, spoke on Twitter. At that time, the price of SOL had exceeded US$230, with an increase of more than 150 times throughout the year, making it a star in the entire encryption industry.

“Here are the reasons why the Solana chain disappeared and the SOL tokens returned to zero.” This was a year later, in December 2022, when ETH maximalist James Spediaccid tweeted predicting that SOL would be purged from the crypto market. At that time, SOL was affected by the crypto winter and FTX’s declaration of bankruptcy. It fell as low as $8, a drop of more than 96% in more than a year, almost to zero.

“Only Possible On Solana”, as the community collectively shouted this slogan, on November 22, 2024, the price of SOL reached US$260, breaking through the highest point of the previous bull market. From the low point to the high point, it increased more than 30 times, completing the phoenix nirvana.

Solana’s first half of life

Solana’s birth story

A start worth hundreds of billions of dollars doesn’t seem to be that uncommon. Anatoly Yakovenko, a Ukrainian-born former Qualcomm engineer, wants to build an on-chain order book trading platform. Then he discovered very quickly that Ethereum was actually unable to carry such a large throughput of on-chain transactions. One night, Anatoly drank 3 cups of coffee, tossed and turned and couldn’t sleep, so he got up and wrote the initial Solana code.

According to Mable, chief revenue officer of STEPN and a former partner at Multicoin Capital, in her podcast, Solana’s fundraising phase was not smooth. In 2018, the Solana team went to Asia for financing. It happened to be that the crypto market was in a bear market, and the market had been hurt many times by the rhetoric of high-performance public chains. Therefore, Solana’s financing in China, South Korea, and Japan encountered obstacles everywhere.

In 2019, Anatoly, who participated in the Blockchain Week in Shanghai, was already somewhat famous. New chains at that time, such as Solana and Near, continued to appear at various peripheral events. Anatoly explains to others what Solana is over and over again, but most people don’t actually pay much attention to it. Just like Vitalik in China a few years ago.

In the end, after multiple rounds of fundraising, the Solana team finally raised $25.53 million. It is far lower than the current star public chains that frequently raise hundreds of millions of dollars, and also lower than the public chains such as Near and Avalanche that released tokens at the same time in the previous round.

The Rise of Solana – SBF’s Choice

In fact, no one paid much attention to Solana after the mainnet was launched. For example, when the network interrupted block production due to certain problems, no one in the community noticed. It wasn’t until the second half of 2020 that Solana officially entered the public eye. There is only one reason, that is, the founder of FTX, SBF, is here. The real rise of Solana is absolutely inseparable from the support of SBF. According to Mable, the encounter between SBF and Solana was more like mutual choice than chance.

At that time, FTX had just been founded for a year and quickly occupied its own territory in the trading circuit. SBF, which came out of Wall Street, has indeed made the encryption industry see a difference. Not only does its trading tool experience differ from other competing products, SBF himself is also deeply involved in the industry and participates in all hot spots.

In the early days of DeFi Summer, SBF wanted to put as many transactions as possible on the chain. Therefore, the SBF team took the initiative to contact star public chains such as Polygon, Avalanche and Near. Rumors in the market at the time were that FTX was the most interested in Near, but it would take some time for their mainnet to be online, but SBF couldn’t wait any longer. After learning the news, Kyle from Multicoin tried to get others to introduce Anatoly to SBF.

One early morning in July 2020, Kyle communicated with SBF for 3 hours, and SBF became interested. The next day, the Solana chain was suddenly attacked by dust. Countless small transactions occurred simultaneously and for a long time on Solana. Yes, it was SBF who did it. He wanted to personally test the actual performance of the Solana chain. In the end, Solana withstood the attack from Massive junk transactions from the SBF team. On the same day, SBF decided to invest in Solana. A few days later, the design of Serum, a decentralized order book matching engine incubated by FTX, was born.

Subsequently, the Solana ecosystem ushered in explosive growth.

The ecological rise of Solana

First, Serum’s circulating market value exceeded US$1 billion at its peak, and Solana ecological projects such as Raydium, Oxygen and Star Atlas were launched on FTX.

Not only that, FTX’s support means that other centralized trading platforms have to start accessing and supporting this new Layer 1 network, which has greatly improved the priority of the major centralized trading platforms Solana-related matters. SBF also personally mobilized groups for Anatoly and Jeremy, CEO of Circle, the parent company of USDC, to support the integration of USDC into the Solana chain.

In addition to the support of SBF, the Solana team itself is also actively organizing hackathons to attract developers from around the world. It can be said that today’s Solana Hackathon has become an important source of Solana’s ecological vitality. Relying on the performance advantage and SBF’s unprecedented absolute pulling power, the Solana token SOL has gone from less than $1 to the highest point of $248 in 2021, and a myth was born.

At that time, Solana ranked behind the top Ethereum and BSC, and could not be said to be the absolute king of the public chain ecosystem. However, compared to Avalanche and Near at the same time, Solana’s basics had completely changed with the blessing of FTX, but I did not expect that. SBF can actually cause trouble.

End

The crypto winter is coming in 2022, and with the Terra (Luna) ecosystem and Three Arrow Capital (3AC) experiencing successive thunderstorms, market panic continues to spread. In the end, due to the combined forces of internal and external factors, Solana’s largest supporter and the most powerful supporter in the industry at the time also fell – FTX declared bankruptcy.

The bankruptcy of FTX and Alameda has seriously affected the entire Solana ecosystem. Not only did the Solana Foundation suffer a loss of more than $180 million in crypto assets. It also directly destroyed Serum, an important underlying protocol of the Solana DeFi ecosystem. Because important authority existed on the FTX side, this cornerstone agreement was soon declared invalid.

Affected by this series of “destructive” events, Solana’s TVL (Total Value Locked) has also dropped from the bull market high of 10 billion to about 200 million US dollars. A series of star projects have chosen to leave the Solana ecosystem and move to EVM chain.

To make matters worse, Solana’s technology was also experiencing frequent problems. In mid-2022, the network experienced multiple outages due to a surge in transaction volume. All this has caused the outside world to question the reliability of its technology. Downtime chain seems to be Solana’s exclusive term.

The community was wailing, and the SOL token was falling all the way. It seemed that Solana had “no way back.”

Solana’s new life

Five days after the SOL token dropped to $8, Ethereum founder Vitalik Buterin issued a tweet.

“Some smart people tell me that Solana has a genuinely smart developer community, and now that the horrible opportunistic money has been washed away, the chain has a bright future.

It’s hard for me to judge from the outside, but I want the community to get a fair chance at development. “

Vitalik’s words seemed to be reassuring, and the SOL token rose in response. The panic in the Solana community was alleviated by subsequent consecutive increases.

In the days that followed, in addition to Multicoin continuing to firmly support Solana, Chris from Placeholder has been publicly supporting Solana since December 2022, and another partner, Joel Monegro, who once wrote a fat agreement at USV In October 2023, I wrote a comparison article between Ethereum and Solana, pointing out that Ethereum is like Android, while Solana is more like iOS.

Everyone knows what will happen in 2024. The dust attack tested by SBF in the early morning became a reality. When hundreds of new assets are issued every minute and tens of thousands of transactions are carried out simultaneously, the prosperous era really emerges. Only Solana can be perfect. Support this huge transaction feast. With the birth of the meme with a market value of billions of dollars, SOL has also reached a record high from US$8, with a market value of hundreds of billions.

Why is Solana hitting new highs?

Precise rhythm control of the team and the foundation

In the darkest moments after the collapse of FTX, Solana’s fate seemed to have been decided. FTX is not only an investor in Solana, but also one of its most important ecological promoters. However, the collapse of FTX not only deprived Solana of its strongest ally, but also pushed it to the edge of market trust.

Faced with such a crisis, the Solana Foundation chose a pragmatic path to recovery. They quickly disclosed all assets related to Alameda, demonstrating the transparency of financial status, and at the same time significantly optimized the network infrastructure, effectively reducing downtime events by improving verification mechanisms and transaction flow control. This kind of persistence that is not swayed by external pressure has won Solana back some of the trust of the community.

However, what really makes the market pay attention to Solana again is not just its technical improvements, but the value it creates for developers and users through practical actions.

Hackathon: The engine of Solana ecosystem

Starting from the end of 2022, the Solana Foundation has increased its efforts in organizing hackathon events, attracting the attention of developers around the world. These activities not only enhance community vitality, but also incubate a number of projects with great potential.

According to incomplete statistics, in the past three years of hackathons, 60,000+ developers have participated in hackathons held by Solana, 4,000+ projects have been launched, and cumulative financing has exceeded 600 million US dollars, giving birth to Jito, Tensor, io.net, Marinade, and Solend Waiting for star projects.

Hackathon is not only a platform for developers to communicate, but also an important source of Solana ecological innovation. Many projects were quickly implemented after the hackathon, injecting strong impetus into ecological prosperity.

The triumph of pragmatism

Mable, who has personally experienced the rise of Solana, mentioned when summarizing the reasons for Solana’s success, “The ego of the founder of Solana is very small, and the entire team has a very pragmatic style. They don’t have too many obsessions, and they don’t feel that they have to have a set of rules. According to the Bible, they will try whatever can help the project gain more attention and recognition, and they are not afraid of losing face and failing again.”

Solana does not shout slogans of “disruption” or “changing the world”, but focuses on improving efficiency and reducing costs. With the ability to process over 65,000 transactions per second and transaction costs as low as $0.00025, Solana is the network of choice for MEME transactions. This strategy of focusing on practical applications also allows Solana’s ecosystem to show broad diversity, from payment tools to Web3 social networking to consumer-grade devices, covering all aspects of users’ lives.

This technically pragmatic style is not only popular in the crypto world, but has also won recognition from traditional financial institutions. Financial giants such as Visa have piloted cross-border payments on the Solana chain, verifying the potential of Solana technology. These collaborations not only expand Solana’s application scenarios, but also open the door for it to penetrate into the mainstream financial world.

Summarize

Solana’s performance in 2024 has been outstanding, demonstrating strong on-chain economic vitality and even approaching or even surpassing Ethereum in multiple key indicators. Relying on its ultra-high transaction throughput capacity and extremely low transaction costs, Solana has become an excellent choice for high-frequency transactions on the chain. The number of active user addresses and on-chain transaction volume continue to rise. Especially driven by the MEME coin craze, pumpfun has attracted a large number of new users, making Solana the center of secondary market transactions.

From falling to the bottom to getting back to the top, Solana’s story may not just be the victory of a project, but also a symbol of the resilience of the encryption industry. Judging from price performance, SOL’s market capitalization has reached 33% of Ethereum, soaring more than 18 times from the bear market low. Such growth not only reflects the market’s recognition of Solana’s technological advantages, but also demonstrates its strong ecological recovery capabilities and market appeal. Whether it is payment, DeFi or the trading craze of MEME coins, Solana is using actual data to prove that “returning to zero” to the top is only possible on Solana.

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