'I will buy all the SOL you have at the market price of 3 dollars right now, you can sell it as you wish, then just roll away.' This was the response of SBF, the founder of FTX, to a trader who was not optimistic about Solana on Twitter on January 10, 2021, 'SOL is about to receive huge buy orders 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. By then, the price of SOL had surpassed 230 dollars, with an annual increase of over 150 times, becoming a star in the entire crypto industry.
'Here are the reasons for the disappearance of the Solana chain and the zeroing of the SOL token.' This was a tweet from ETH maximalist James Spediaccid predicting in December 2022 that SOL would be wiped out of the crypto market. At that time, SOL was affected by the crypto winter and the bankruptcy announcement of FTX, dropping as low as 8 dollars, with a decline of over 96% over more than a year, nearly reaching zero.
'Only Possible On Solana,' at the moment the community collectively shouted this slogan, on November 22, 2024, the price of SOL reached 260 dollars, breaking through the previous bull market's peak. From low to high, the increase exceeded 30 times, completing a phoenix rebirth.
The first half of Solana's life
The story of Solana's birth
A hundred billion dollar start doesn't seem too rare. Anatoly Yakovenko, a Ukrainian former Qualcomm engineer, wanted to create an on-chain order book trading platform. He quickly realized that Ethereum could not handle such a large throughput of on-chain transactions. One night, Anatoly, after drinking three cups of coffee, couldn't sleep and got up to write the initial Solana code.
According to Mable, Chief Revenue Officer of STEPN and former partner at Multicoin Capital, Solana did not have a smooth fundraising phase. In 2018, the Solana team went to Asia for financing, coinciding with the crypto market being in a bear phase, and the market had already been hurt multiple times by the rhetoric of high-performance public chains, so Solana faced numerous obstacles in securing financing in China, Korea, and Japan.
In 2019, Anatoly, who participated in blockchain week in Shanghai, had already gained some fame. During that year, new chains like Solana and Near frequently appeared at various surrounding events. Anatoly repeatedly explained what Solana was, but most people didn’t pay much attention, similar to how Vitalik was in China a few years ago.
Finally, after multiple rounds of fundraising, the Solana team ultimately raised 25.53 million dollars. This amount is far lower than the hundreds of millions typically raised by star public chains today, and also lower than the public chains like Near and Avalanche that released tokens in the same round earlier.
The Rise of Solana - SBF's Choice
In fact, after the mainnet launch, hardly anyone paid attention to Solana. For instance, the network experienced block interruptions due to certain issues, and the community didn't notice. It wasn't until the second half of 2020 that Solana began to enter the public eye. The reason was simple: SBF, the founder of FTX, arrived. Solana's true rise was undoubtedly inseparable from SBF's support. According to Mable, the encounter between SBF and Solana was not just coincidental but seemed like a mutual choice.
At that time, FTX had just been established for a year and quickly occupied its territory in the trading track. SBF, coming from Wall Street, indeed showed a different world to the crypto industry, not only in the trading tools that provided a different experience from other competitors, but SBF was also deeply involved in the industry, participating in every hot topic.
At the beginning of DeFi Summer, SBF wanted to put as many transactions on-chain as possible. So the SBF team proactively 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 would take some time, while SBF could not wait. After Kyle from Multicoin learned about this, he found a way to introduce Anatoly to SBF.
In the early hours of a July day in 2020, Kyle had a three-hour conversation with SBF, who then became interested. The next day, the Solana chain was suddenly subjected to a dust attack, with countless small transactions happening simultaneously and for an extended period on Solana. Yes, it was SBF who wanted to personally test the actual performance of the Solana chain, and ultimately Solana withstood the massive influx of garbage transactions from SBF's team. It was also on that day that 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 Solana's ecosystem
First, Serum had a circulating market cap of over 1 billion dollars at its peak, while Solana ecosystem projects like Raydium, Oxygen, and Star Atlas landed on FTX.
Moreover, FTX's support meant that other centralized trading platforms had to start integrating and supporting this brand new Layer 1 network, which significantly elevated the priority of Solana-related matters on major centralized trading platforms. SBF even personally helped Anatoly and Jeremy, the CEO of Circle, the parent company of USDC, to form a group to support USDC's integration with the Solana chain.
Apart from SBF's support, the Solana team itself actively held 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. Thanks to performance advantages and SBF's unprecedented absolute pulling power, the Solana token SOL rose from less than 1 dollar to its peak of 248 dollars in 2021, creating a myth.
At that time, Solana ranked behind top chains like Ethereum and BSC; it couldn't be said to be the absolute king of public chain ecosystems, but compared to contemporaries like Avalanche and Near, Solana had fundamentally changed with FTX's backing, although it was unexpected that SBF would run into trouble.
The curtain falls
In 2022, the crypto winter arrived, and as the Terra (Luna) ecosystem and Three Arrow Capital (3AC) collapsed one after another, market panic continued to spread. Ultimately, under the combined pressures of internal and external factors, Solana's biggest supporter, who was also the most powerful supporter in the industry at the time, 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 dollars in crypto asset losses but also directly undermined the important underlying protocol Serum in the Solana DeFi ecosystem. Since critical permissions were held by FTX, this cornerstone protocol soon announced its invalidation.
Affected by a series of 'devastating' events, Solana's TVL (Total Value Locked) dropped from the bull market peak of 10 billion down to around 200 million dollars, leading a series of star projects to choose to leave the Solana ecosystem and migrate to EVM chains.
Worse still, Solana's technology frequently encountered problems. In mid-2022, the network experienced multiple interruptions due to a surge in transaction volume. All of this led to doubts about the reliability of its technology. Downtime seemed to have become a proprietary term for Solana.
The community was in despair as the SOL token kept falling, seemingly indicating that Solana was 'beyond saving.'
The rebirth of Solana
On the fifth day after the SOL token dropped to 8 dollars, Ethereum founder Vitalik Buterin posted a tweet.
'Some smart people told me that Solana has a genuine and intelligent 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 remarks seemed to become a reassuring pill, and the SOL token responded by rising. The panic in the Solana community was alleviated in the following continuous upward trends.
In the following days, besides Multicoin continuing to firmly support Solana, Chris from Placeholder has been publicly backing Solana since December 2022, while another partner, Joel Monegro, who once wrote about the fat protocol at USV, wrote a comparison article between Ethereum and Solana in October 2023, pointing out that Ethereum is like Android, while Solana is more like iOS.
As for 2024, everyone knows that 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 happening simultaneously, Solana is the only one that can perfectly support this massive trading feast. With the birth of meme coins with a market value in the billions, SOL, which was at 8 dollars, has reached a historical high with a market cap of hundreds of billions.
Why has Solana reached new highs?
The precise rhythm control of the team and the foundation
In the darkest moments 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 ecological promoters. However, the collapse of FTX not only caused Solana to lose its strongest ally but also pushed it to the brink of market trust.
In the face of such a crisis, the Solana Foundation chose a pragmatic path to revival. They quickly disclosed all assets related to Alameda, indicating financial transparency, while significantly optimizing network infrastructure. By improving the verification mechanism and transaction traffic control, they effectively reduced downtime incidents. This steadfastness, unshaken by external pressures, helped Solana regain some trust within the community.
However, what truly brought the market's attention back to Solana was not just its technological improvements but its actual actions in creating value for developers and users.
Hackathon: The engine of the Solana ecosystem
Starting from the end of 2022, the Solana Foundation increased the intensity of its hackathon activities, attracting global developers' attention. These events not only enhanced community vitality but also incubated a batch of highly promising projects.
According to incomplete statistics, in the past three years of hackathons, over 60,000 developers participated in hackathons organized by Solana, with more than 4,000 projects launched, raising over 600 million dollars in total, giving birth to star projects like Jito, Tensor, io.net, Marinade, and Solend.
Hackathons are not just a platform for developer communication but also an important source of innovation for the Solana ecosystem. Many projects rapidly took shape after the hackathons, injecting strong momentum into the ecosystem's prosperity.
The victory of pragmatism
Mable, who experienced Solana's rise, mentioned when summarizing the reasons for Solana's success, 'The ego of Solana’s founder is very small, and the entire team has a very pragmatic style. They have no strong obsessions and don’t feel the need to have a set of doctrines. They try whatever can help the project gain more attention and recognition; they are not afraid of embarrassment or failure.'
Solana did not shout slogans like 'disrupt' or 'change the world' but 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 dollars, Solana became the preferred network for MEME trading. This focus on practical applications also allowed the Solana ecosystem to present a vast diversity, covering various aspects of user life from payment tools to Web3 social, to consumer-grade devices.
This pragmatic style of technology has been widely welcomed not only in the crypto world but also recognized by traditional financial institutions. Financial giants like Visa have already piloted cross-border payments on the Solana chain, validating Solana's technological potential. 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 a strong on-chain economic vitality, and even approaching or surpassing Ethereum on multiple key indicators. Leveraging its ultra-high transaction throughput and extremely low transaction costs, Solana has become an excellent choice for high-frequency trading on-chain. The number of active user addresses and on-chain transaction volume has continued to rise, especially propelled by the MEME coin craze, with pumpfun attracting a large number of new users, making Solana the center of secondary market trading.
From hitting rock bottom to reaching the peak again, Solana's story may not just be a victory for a single project but a symbol of resilience in the crypto industry. From a price performance perspective, SOL's market cap has reached 33% of Ethereum's, skyrocketing more than 18 times from the bear market low. This growth not only reflects the market's recognition of Solana's technological advantages but also showcases its powerful ecological recovery ability and market appeal. Whether in payments, DeFi, or the trading boom of MEME coins, Solana is proving with actual data that 'zero to peak' is Only Possible On Solana.
