Author: Nakamao, BlockBeats
"I will buy all the SOL you have at the market price of 3 USD, you can sell it however you want, then you can roll out of here." This was a response from SBF, the founder of FTX, to a trader who was skeptical about Solana on Twitter on January 10, 2021, "A huge buy order for SOL is coming because every billionaire in the world is calling me and SBF (consulting about Solana)." On December 1 of the same year, Kyle Saman, managing partner of Multicoin Capital, made a statement on Twitter. At that time, the price of SOL had exceeded 230 USD, with an annual growth rate exceeding 150 times, becoming a star in the entire crypto industry.
"Here are the reasons why the Solana chain disappeared, and the SOL token went to zero." This was a tweet from ETH maximalist James Spediaccid predicting that SOL would be eliminated from the crypto market, one year later in December 2022. At that time, SOL was affected by the crypto winter and the bankruptcy of FTX, dropping to a low of 8 USD, a decline of over 96% in more than a year, nearly reaching zero.
"Only Possible On Solana," as the community collectively shouted this slogan, on November 22, 2024, the price of SOL soared to 260 USD, breaking through the previous bull market's peak. From the low to the high, it increased by over 30 times, completing a phoenix-like rebirth.
The First Half of Solana's Life
The Story of Solana's Birth
A hundred billion dollar start seems not too uncommon. Anatoly Yakovenko, a Ukrainian former Qualcomm engineer, wanted to create an on-chain order book trading platform himself. He quickly discovered that Ethereum could not handle such high throughput on-chain transactions. One night, after drinking three cups of coffee, Anatoly could not sleep and got up to write the initial Solana code.
According to Mable, the Chief Revenue Officer of STEPN and former partner at Multicoin Capital, in her podcast description, Solana did not have a smooth fundraising phase. In 2018, the Solana team went to Asia for fundraising, coinciding with the crypto market being in a bear market, and the market had already been hurt multiple times by high-performance public chain rhetoric, so Solana faced many obstacles in fundraising in China, South Korea, and Japan.
In 2019, Anatoly, who participated in the blockchain week in Shanghai, was already somewhat famous. During that event, new chains like Solana and Near kept appearing in various peripheral activities. Anatoly explained what Solana was again and again, but most people did not pay much attention. It was like Vitalik in China a few years ago.
Ultimately, after several rounds of fundraising, the Solana team successfully raised 25.53 million USD. This was far lower than the star public chains that now easily raise hundreds of millions, and also lower than public chains like Near and Avalanche that released tokens in the same period.
The Rise of Solana — SBF's Choice
In fact, after the mainnet went live, Solana did not attract much attention; for instance, the network interrupted block production due to certain issues, and the community did not even notice. It wasn’t until the second half of 2020 that Solana began to officially enter the public eye. The reason was simple: SBF, the founder of FTX, came along. The true rise of Solana is absolutely inseparable from SBF's support. According to Mable's account, SBF and Solana's encounter was not only accidental but felt more like a mutual choice.
At that time, FTX had just been established for a year, quickly occupying its territory in the trading track. SBF, coming from Wall Street, truly showed the crypto industry a different experience, not only in trading tools but also deeply engaged in the industry, participating in every hot topic.
At the beginning of DeFi Summer, SBF wanted to move as many trades as possible on-chain. Therefore, the SBF team actively reached out to star public chains like Polygon, Avalanche, and Near. The market rumor at that time was that FTX was most interested in Near, but their mainnet launch needed some time, and SBF couldn't wait. After Kyle from Multicoin learned this news, he managed to have someone introduce Anatoly to SBF.
In the early hours of a July day in 2020, Kyle had a 3-hour conversation with SBF, sparking SBF's interest. The next day, the Solana chain was suddenly attacked with dust, with countless small transactions occurring simultaneously and for an extended period on Solana. Yes, it was SBF who wanted to personally test the actual performance of the Solana chain. In the end, Solana withstood the massive garbage transactions from SBF's team. On the same day, SBF decided to invest in Solana. A few days later, the design of Serum, the decentralized order book matching engine incubated by FTX, was born.
Subsequently, the Solana ecosystem experienced explosive growth.
The Rise of the Solana Ecosystem
First, Serum had a circulating market value of over 1 billion USD at its peak, while other Solana ecosystem projects like Raydium, Oxygen, and Star Atlas landed on FTX.
Moreover, the support from FTX meant that other centralized trading platforms had to start integrating and supporting this new Layer1 network, which significantly increased the priority of Solana-related matters on major centralized exchanges' schedules. SBF even personally created a group for Anatoly and Jeremy, the CEO of USDC's parent company Circle, to support the integration of USDC into the Solana chain.
In addition to SBF's support, the Solana team itself was actively organizing hackathons to attract developers from around the world. It can be said that today's Solana hackathons have become an important source of vitality for the Solana ecosystem. Leveraging performance advantages and SBF's unprecedented absolute pull, the Solana token SOL rose from less than 1 USD to its peak of 248 USD in 2021, creating a myth.
At that time, Solana was ranked behind the top Ethereum and BSC, it cannot be said to be the absolute king of public chain ecosystems, but compared to Avalanche and Near at the same time, Solana had fundamentally changed under the support of FTX, but did not expect SBF to have an accident.
Curtain Call
The crypto winter of 2022 arrived, and with the Terra (Luna) ecosystem and Three Arrow Capital (3AC) collapsing one after another, market panic continued to spread. Ultimately, under the combined pressure of internal and external factors, Solana's biggest supporter and the most powerful supporter in the industry at the time also fell — FTX declared bankruptcy.
The bankruptcy of FTX and Alameda severely impacted the entire Solana ecosystem. It not only caused the Solana Foundation to suffer over 180 million USD in crypto asset losses but also directly destroyed the important underlying protocol of the Solana DeFi ecosystem, Serum. Since important permissions were held by FTX, this cornerstone protocol quickly announced its invalidation.
Affected by this series of 'devastating' events, Solana's TVL (Total Value Locked) has fallen from the bull market peak of 10 billion to around 200 million USD, and a series of star projects have chosen to leave the Solana ecosystem for EVM chains.
Worse still, Solana's technology has frequently encountered problems. In mid-2022, the network was interrupted multiple times due to a surge in transaction volume. All of this has raised doubts about the reliability of its technology. Downtime seems to have become a term exclusive to Solana.
The community was in mourning, and the SOL token kept falling, seemingly indicating that Solana was 'beyond redemption.'
The Rebirth of Solana
On the fifth day after the SOL token dropped to 8 USD, Ethereum founder Vitalik Buterin tweeted.
"Some smart people told me that Solana has a sincere and smart developer community, and now those terrible opportunistic funds have been washed away, this chain has a bright future.
I find it hard to judge from the outside, but I hope the community gets a fair opportunity for development.
Vitalik's statement seemed to be a reassuring pill, and the SOL token responded with a rise. The panic in the Solana community was alleviated in the subsequent continuous rise.
In the following days, in addition to Multicoin continuing to firmly support Solana, Chris from Placeholder has been publicly standing for Solana since December 2022, while another partner, who once wrote the Fat Protocol thesis at USV, Joel Monegro, wrote a comparative article on Ethereum and Solana in October 2023, pointing out that Ethereum is like Android, while Solana is more like iOS.
And everyone knows what happened in 2024, the dust attack that SBF tested in the early hours became a reality. When there were hundreds of new assets issued every minute and tens of thousands of transactions happening simultaneously, such a grand era truly appeared, and only Solana could perfectly support this massive trading feast. With the birth of meme assets worth tens of billions, SOL rose from 8 USD to a historical high, with a market capitalization of hundreds of billions.
Why Did Solana Reach New Highs?
The precise rhythm control of the team and the foundation
In the darkest hour after the FTX collapse, Solana's fate seemed to have been determined. FTX was not only an investor in Solana but also one of its most important ecosystem promoters. However, the collapse of FTX not only caused Solana to lose 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 revival. They quickly disclosed all assets related to Alameda, indicating transparency in financial status, while significantly optimizing network infrastructure. By improving validation mechanisms and transaction flow control, they effectively reduced downtime events. This steadfastness, undeterred by external pressure, helped Solana regain some trust from the community.
However, what truly brought the market's attention back to Solana was not just its technological improvements, but the actual value it created for developers and users through its actions.
Hackathon: The Engine of the Solana Ecosystem
Starting from the end of 2022, the Solana Foundation increased the frequency of hackathon events, attracting global developers' attention. These events not only enhanced community vitality but also incubated a number of highly promising projects.
According to incomplete statistics, over the past three years in hackathons, more than 60,000 developers participated in the hackathons held by Solana, over 4,000 projects were launched, raising over 600 million USD cumulatively, and birthed star projects like Jito, Tensor, io.net, Marinade, Solend, etc.
Hackathons are not just a platform for developer exchange; they are also an important source of innovation for the Solana ecosystem. Many projects rapidly materialized after hackathons, injecting strong momentum into the ecosystem's prosperity.
The Victory of Pragmatism
Mable, who experienced Solana's rise, mentioned that when summarizing the reasons for Solana's success, "the ego of Solana's founders is very small, and the entire team has a very pragmatic style. They have no obsession, and do not feel that they must have a set of guidelines to be revered as scripture. Whatever can help the project gain more attention and recognition, they try it out without fear of embarrassment and willing to fail and try again."
Solana did not shout slogans like 'disrupt' or 'change the world,' but instead focused 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 USD, Solana has become the preferred network for MEME trading. This focus on practical applications has also allowed Solana's ecosystem to display a wide diversity, covering all aspects of users' lives from payment tools to Web3 social, to consumer devices.
This pragmatic style of technology has not only been widely popular in the crypto world but has also gained recognition from traditional financial institutions. Financial giants like Visa have already piloted cross-border payments on the Solana chain, validating the potential of Solana's technology. These collaborations not only expanded Solana's application scenarios but also opened the door for it to penetrate the mainstream financial world.
Summary
Solana's performance in 2024 has been remarkable, showcasing strong on-chain economic vitality, even approaching or surpassing Ethereum on multiple key metrics. Relying on its ultra-high transaction throughput and extremely low transaction costs, Solana has become an excellent choice for on-chain high-frequency trading. The number of active user addresses and on-chain transaction volume continues to rise, especially driven by the MEME coin craze, with pumpfun attracting a large number of new users, making Solana the center of secondary market trading.
From falling to the bottom to standing at the top again, Solana's story may not only be a victory for a project but also a symbol of resilience in the crypto industry. From a price performance perspective, SOL's market capitalization has reached 33% of Ethereum, surging over 18 times from the bear market low. This growth reflects not only the market's recognition of Solana's technological advantages but also showcases its strong ecosystem recovery capability and market appeal. Whether in payments, DeFi, or the MEME coin trading craze, Solana is proving with real data that 'from zero to peak, Only Possible On Solana.'
