Written by: akshaybd
Compiled by: zhouzhou, BlockBeats
Editor's note: The recent cycle of Solana has been robust, with intense meme trading on-chain and continually rising token prices, thanks to the Solana Foundation's focus on enhancing infrastructure performance and reducing latency to meet market demands, thereby promoting the growth of founders, applications, and tokenized projects.
The following is the original content (for readability, the original content has been adjusted):
Internet capital markets and F.A.T. protocol engineering
Solana's commitment is to enable anyone with an internet connection to participate in the capital markets. Today, you can join the internet capital market - a globally accessible ledger that can tokenize entities, currencies, and culture - simply by downloading a wallet or app and clicking a few buttons.
Why does this matter?
It helps us create a world where anyone with an internet connection can own assets anytime and anywhere. These assets can be global companies, real estate, commodities, or even cultural expressions. This lays the foundation for 'universal foundational ownership'. The competition for high-performance L1 is not just to establish a decentralized NASDAQ but to create an internet-native successor to NASDAQ - a capital market with better accessibility, lower latency, and shared global liquidity.
The opportunity is both simple and enormous: Currently, only about 15% of the global population can participate in the US capital markets - the most liquid markets in the world. Many other countries' capital markets lack liquidity, have high entry costs, and suffer from inefficient settlement. The cryptocurrency market, in contrast, is more accessible and liquid. At peak times, its trading volume even exceeds that of NASDAQ and NYSE, and we have the opportunity to build the best capital market on the internet.
In the future, companies will be able to list 'on the internet' directly and reach over a billion investors holding private keys - voting with their funds to decide the future they want. This is not limited to stocks but includes all valuable asset classes, culture, and ideologies.
How to accelerate towards this future?
This is the significance of F.A.T. protocol engineering, as the industry has mostly been built on the idea that 'value will primarily concentrate on the infrastructure layer' (Fat Protocols, 2016). Eight years later, we are still building infrastructure because it often attracts higher valuations.
In contrast, Solana's ecosystem chooses to bet on products, a fact reflected in the Breakpoint conference in 2024. By focusing on founders, applications, and tokenization, Solana's share of the trading fee market - a great indicator of ecosystem activity and overall health - grew by 1,489% in 2024, reaching 12%.
F = Founders, not just developers
Now, for a group of determined founders, it has never been easier and quicker to go from garage startups to billion-dollar companies, solely with an internet connection.
1.tensor: Two founders from Canada, company valuation of $445 million
2.pump.fun: UK team, achieved $155 million in fee revenue in 8 months
3.birdeye: Based in Vietnam, users reached 24 million in 2024
The startup flywheel will continue to operate at high speed in 2025, with the colosseum hackathon (Solana's hackathon) being the largest talent discovery and growth program in the crypto space, with past participants having raised a total of $650 million.
This flywheel benefits from the ecosystem support built for scaling: from the hub of the superteam, workspaces of the shipyard, to the solanaturbine accelerator, community-led infrastructure further accelerates the growth of founders.
A = Application, not just infrastructure
Infrastructure represents uncertain optimism, while applications represent certain optimism. The Solana ecosystem prioritizes products that users truly need. What is the result?
Just in October of this year, application revenue reached $73 million, a year-on-year increase of 185 times, now leading all networks. Additionally, 74% of funds within the ecosystem flowed to applications (compared to Ethereum's 40%), as founders followed user demands.
Solana has always adhered to the principle that what matters is not TVL, but rather the gathering place of economic activity. Chain GDP (revenue generated by applications) is the primary indicator of a protocol's long-term success. When revenue generated by applications exceeds the base layer, it indicates that the protocol layer has achieved product-market fit. If your infrastructure layer is exploitative, applications will leave, opting to build their own chains or migrate to others.
Study the Laffer Curve.
T = Tokenization, not just TVL
TVL is a passive, self-referential metric. Active metrics like capital efficiency and trading volume are more instructive. The more important ultimate goal is: Solana is the best platform for issuing internet assets. In the past six months, we have witnessed the release of 2.6 million tokens, accounting for 78% of the total across all chains. While memes may occupy a significant share of public awareness, they are not the only things growing.
The treasury balance has doubled to $134 million, stablecoins have grown by 120% to approximately $4 billion, and it also includes 4,200 physical assets from BAXUSco and dvinlabs, 190 million digital collectibles from drip haus, and over 1 million hotspots from helium, just to name a few examples.
With the follow-up of adoption, tools, and regulation, super-tokenization will accelerate - this will become a globally accessible ledger where all assets will be tokenized.
Each component of F.A.T. is mutually reinforcing: more founders launch products, more products attract users, more users drive the tokenization of more capital, and more capital attracts more founders. Just in Q3 2024, the Solana native team raised $178 million.
The 'protocol' part of the F.A.T. protocol engineering
Teams focused on core protocols (like Anza, Jump, Jito, etc.) are working daily to enhance performance and optimize experiences. They push the limits of hardware and software to improve Solana's performance and capacity at the base layer. Increasing bandwidth and reducing latency is a key strategy for Solana, emphasizing Solana's continuous commitment to building infrastructure for actual use, not just for valuation.
Finally, I refer to it as engineering (rather than theory) because it elucidates an important value inherent in the ecosystem. A product culture that is opinionated yet pragmatic, continuously making tough trade-offs, launching and iterating in the real world to find product-market fit (PMF). This culture attracts practitioners rather than just academics.
As the ecosystem continues to grow, we should maintain this culture rather than become dogmatic, or worse - complacent due to any temporary success. The development of cryptocurrency is rapid, and we will always remain flexible and adaptable.
Currently, it is expected that the foundation's marketing activities will support these core pillars through various events and content - in the process, we celebrate the best founders, applications, and tokenization projects, while teams continue to work on enhancing Solana's speed and performance. Additionally, given that innovation seems to be unfolding in the US, we will refocus on the US market.
