The market is dull and there is a lack of phenomenal new projects to drive narrative changes.
But looking back, Solana is still an ecosystem worth paying attention to. The user demand is obvious, and the transaction frequency and activity have remained at a certain level.
As liquidity and attention accumulate, an opportunity is needed to break the dull market structure.
Currently, games on Solana seem to have been overshadowed by Meme popularity, but there is huge room for imagination:
First, there is still no game of equal size to the ETH-related ecosystem; second, in the context of mobility and narrative rotation, the Solana gaming track as a whole needs to be activated to take over the existing liquidity and attention.
From the "dull summer" to the "gaming feast", which projects will become the key drivers and provide promotion in terms of technology, ecology and funding?
Sonic, the first Layer2 built for games launched on Solana, and also the first modular SVM chain on Solana, may be worth paying attention to.
The project proposes a Rollup expansion framework called HyperGrid, which can combine the speed of Solana and the customizability of game-specific rollups to create conditions for the explosion of the gaming ecosystem on Solana.
Meanwhile, in June this year, Sonic also received a $12 million investment led by Bitkraft, with participation from Galaxy and Big Brain Holding. The token will be launched in October, which is expected to be fully realized. According to public information, Sonic is also developing game and partner cooperation plans, trying to introduce more games into the Solana ecosystem through incentives;
For users who are more interested in Degen, Sonic has been conducting node pre-sales in recent days, which has added more reasons to pay attention to this project.
In this issue, we will take a closer look at Sonic, explore the rationale for its existence, and conduct research from aspects such as products, technology, and ecological resources.
Times make heroes, Sonic's self-consistency and timing
Don't rush into it.
Whether a project is worthy of attention, the "self-consistency" in terms of demand and narrative is very important.
Before you get to know Sonic, you must be wondering: Does Solana, which is already fast enough, still need L2? What capabilities does Sonic have to meet these needs?
At first glance, stereotypes seem like problems, but if you think about it, you'll find new market opportunities.
For example, Solana's second-generation mobile phone sales received 60,000 orders within 3 weeks. The market demand for mobile devices is significant. While mobile devices are available, games within the ecosystem are missing (leaving aside the question of whether Web3 games are fun or not, whether there are games is the prerequisite question):
The main Web3 games at present are basically on Polygon/BNB/ETH. Although Solana is called the so-called retail chain, the game category closest to retail investors has not yet developed.
Data from DappRadar shows that none of the TOP25 UAW (unique active wallet) games are on Solana; nor are any of the TOP10 games by market value on Solana.
It's like two sides of the same coin. You can see the absence of current games, but it also means there are great opportunities to provide seats for games.
Regarding another question, whether Solana needs L2, in fact, technology, public opinion and applications all show the need.
Technically, Solana’s main chain L1 faces foreseeable performance pressure and requires a sharing method; while L2’s Rollup is an optional option.
As dAPP and DeFi activities on Solana grow faster, the number of on-chain transactions per day exceeded 200 million in January 2024. Some analysts conservatively estimate that the transaction volume will exceed 4 billion in 2026.
Under this foreseeable pressure, Solana's TPS is around 2500-4000, and the average ping time of the Solana cluster fluctuates between 6 seconds and 80 seconds; when TPS becomes increasingly saturated and even exceeds 4000, the success rate of Solana transactions only reaches 70% to 85%.
At the same time, when Meme transactions on the chain are frequent, other applications will be affected; when games interact with high frequency, the performance of L1 will also be dragged down to a certain extent.
In terms of application, some projects have begun to consider Rollup-like designs.
Since Solana lacks advanced data structures for games, project developers need to manually implement them in smart contracts, which makes it more difficult to make games on Sol. At the same time, the lack of a caching mechanism also means that common operations in games such as cross-transaction calls and data account access are difficult to handle, further increasing the difficulty of game development.
Non-gaming projects, such as Pyth, are building application chains based on Solana, and Grass is packaging high-frequency DePIN data and passing it to L1 through zk aggregation. L2-like behavior is occurring.
The same is true for applications (games). Obviously, they prefer to have their own L2 Rollup, which is more conducive to value capture, privacy and real-time settlement of their own fees.
In public opinion, the founders of Solana-related ecological projects have also been constantly discussing the need for L2.
From the perspectives of performance, ecology, application, and communication, Solana needs a game chain to expand its ecosystem.
Changing our thinking and starting from an investment research perspective, the above information together means: whoever solves the needs in the Solana ecosystem first will have a better chance of becoming the next Alpha.
This is the consistency and opportunity facing Sonic.
Hypergrid, the secret weapon for easy "one-click chain release"
Now that we understand the necessity, let’s take a look at how Sonic plans to do L2.
What makes Sonic unique is Hypergrid, a horizontally scalable Rollup architecture designed specifically for Solana SVM.
You can understand that Sonic's L2 is built on HyperGrid and is Solana's first concurrent expansion framework; further, the name HyperGrid means that multiple independent grids are allowed to run at the same time, each grid can process transactions independently, but ultimately consensus and confirmation are achieved through the Solana mainnet.
The advantage of this design is that it can greatly improve the scalability and performance of the system.
You can think of it as an "autonomous system" that is both autonomous and centralized:
Independent operation: Each grid can independently handle its internal transactions, including verification, logging, and state changes. This means that applications in one grid will not affect the operation of other grids.
Connected to the mainnet: Although the grid can run independently, the final consensus and confirmation still rely on the Solana mainnet. This ensures data consistency and security for all grids.
Flexible expansion: Developers can choose to use a public grid or create an independent grid to obtain higher performance isolation and control based on their needs.
If you still don't understand, a better analogy is a large shopping mall and independently operated shops.
Think of HyperGrid as a large shopping mall, and each grid is an independent store in the mall. Each store (grid) can operate independently and handle its own transactions and customers (application transactions).
Real Estate (Solana Mainnet) is responsible for the security and management of the entire mall, ensuring that the transaction records and status changes of each store can be finally confirmed. If a store is particularly busy, a new branch can be opened (creating a new independent grid) to ensure the smooth operation of the business without affecting other stores.
Specifically in terms of architecture, Hypergrid actually consists of the following parts:
Solana Base Layer: Responsible for the final consensus and data recording. This layer receives batch zero-knowledge proofs (Batch ZK proofs) from Hypergrid for settlement and shares status information.
Hypergrid: A shared sorter network that coordinates and manages multiple grids, and also contains multiple validators, each of which is responsible for processing and verifying transactions.
Different Grids: Each grid can be considered as an independent application or service (such as a game), handling its specific transactions and state changes.
Users: make transactions with Hypergrid, which is responsible for receiving and processing these transactions. Transactions are processed by Hypergrid's validators and ultimately settled and recorded through the Solana base layer.
The Hypergrid architecture alone is not enough to fully realize its effect. It needs to be equipped with some auxiliary tools to make it easier to use.
The first is the EVM interpreter, which allows existing Ethereum-based games to be deployed on Hypergrid with only minor changes. At the same time, Hypergrid has also developed a native game engine that covers the runtime loop function, game-specific types, containers, and sandbox environments of the game, reducing the various barriers to game access, development, and debugging.
In the final stage of interaction with assets, Hypergrid also provides a complete set of payment and settlement infrastructure, such as embedded NFT markets, token swaps, bridges and liquidity pools, identity authentication and wallets and other supporting tools.
Therefore, Hypergrid combined with the above tools can enable developers to quickly build a customized Rollup for their own game without having to reinvent the wheel from start to finish. All the aspects required for Web3 games can be handled end-to-end using existing architectures and toolkits.
At the same time, the benefits brought to developers will eventually spill over to all stakeholders around Solana.
Crypto players can get a better trading and gaming experience, but they cannot perceive any changes technically, they just subjectively feel that the transaction speed has become faster. For the entire Solana ecosystem, applications' own customized Rollups can also reduce the performance pressure of the main network, so that project parties are willing to introduce more Solana games. Each game will bring users and liquidity to the in-game assets, which will also penetrate into Solana's base layer.
It is worth mentioning that as an L2, Hypergrid’s system also adopts a staking design. Validators in the network need to stake SOL to become nodes, which indirectly improves the value capture effect of SOL.
Ultimately, Sonic's Hypergrid design greatly improves the scalability and performance of the system while ensuring data consistency and security; it enables all parties in the Solana ecosystem to benefit, and I believe it is a reasonable choice that multiple parties can and are motivated to participate in.
Focus beyond technology
As an L2 infrastructure project that can benefit multiple parties, technology is certainly important, but what is more critical is how many partners can play together and to what extent one can expand one's business circle.
Therefore, factors such as resources, cooperation capabilities, community building and market entry strategy behind Sonic become more important.
In June this year, Sonic announced that it had raised $12 million in a Series A round led by Bitkraft, with participation from Galaxy Interactive, Big Brain Holdings and others.
The developer behind Sonic, Mirror World, has even stronger strength. As early as 2022, it received a seed round of financing of 4 million US dollars, and CEXs such as OKX and Bybit also participated in the investment. On the basis of the previous foundation, if Sonic's token TGE is held, it will further increase the expectations of the exchange.
On the other hand, Sonic and the Mirror World also have a close connection with Solana.
Public information shows that Solana’s Asia-Pacific growth team, gaming team, and ecosystem technology leaders are all consultants and angel investors of the Sonic project, which undoubtedly adds legitimacy to the project.
More official organizational connections also mean broader connections and resources, making it easier to collaborate in the Solana ecosystem, thus paving the way for project development.
Specifically, Mirror World's application development platform SDK has been deployed to 50 game clients as initial distribution nodes. It has established a good cooperative relationship with existing games, making it easier to migrate existing games to Sonic and complete the cold start of Sonic's ecosystem.
Currently, more than 10 on-chain games have been successfully deployed on Sonic’s testnet, including the first on-chain Casino Zeebit in the Solana ecosystem and Lowlife Forms, a top shooting game officially invested by Solana.
Meanwhile, the Sonic testnet has taken shape.
According to the official data panel, the number of active wallets on Sonic has exceeded 2 million. With the official launch of Sonic's mainnet in September, we can expect more games to be introduced. If a phenomenal game is launched, this number will probably only increase.
But everyone knows that Web3 games will not necessarily attract outsiders at the beginning. It is more important to activate users within the circle and inject initial traffic and attention.
The author has always emphasized that for an infrastructure project, the ability to organize and attract resources directly determines the lower limit of the project. In this regard, Sonic's advantage is very obvious. Its key cooperation advantage is that it can establish good cooperative relationships with other non-game projects and provide liquidity, traffic and security support for this chain.
For example, Backpack, OKX wallet, Metaplex, Solayer (with more than $25 million of SOL staked), Jito and other exchanges, DeFi and LST projects have now become Sonic’s partners, jointly providing blood transfusions for this L2.
In addition to connecting with partners, Sonic has also been increasing its influence in the community recently to strengthen brand awareness.
As a global L2, Sonic has now recruited promotion ambassadors in various countries and held community meet ups in incremental Web3 markets such as Turkey and Nigeria to strengthen the project's position in the minds of users and developers.
At the same time, judging from recent actions, Sonic has also accelerated the frequency of exposure. Important activities in the Solana ecosystem, such as the hacker house and breakpoint, are co-organized by Sonic; and whether it is Solana's Chinese community or the global community, Sonic is also actively sharing as a guest.
From these little actions, we finally see that Sonic is a project with multiple VC investments, official support from Solana, global user reach and good activity, as well as strong resource connection capabilities and the initial scale of ecological development.
More importantly, Sonic’s lead in narrative (the first L2 for gaming on Solana) adds up to a lot of reasons why you should pay attention to Sonic.
Current opportunities to participate: HyperFuse Guardian Node NFT sale
Currently, Sonic's token $SONIC is scheduled to be launched in October. Although it is not possible to directly participate in the token at present, we can understand its economic model and utility in advance and participate in the upcoming node pre-sale event.
First of all, SONIC tokens exist for three types of roles, namely token holders, construction contributors, and users and communities.
Token holders: $Sonic can be exchanged for $veSonic at a 1:1 ratio to participate in ecosystem governance voting or delegate to different validators for additional rewards.
Builders and Contributors: Builders and Contributors can participate in the Sonic Partner Innovation Network (SPIN) and Sonic Accelerator Program to gain ecosystem support to co-build high-quality games, infrastructure tools, or support the growth of other parts of the ecosystem.
Users and communities: Participate in interactive experiences in ecosystem projects. Through Sonic's activities, users can earn points rewards, which can be exchanged for tokens or other ecosystem rewards.
So, what are the current spaces where users can participate to get the opportunity to receive token rewards?
On September 16, Sonic will launch a sale called HyerFuse Guardian Node (visit here). The sale will be for 50,000 NFTs representing the rights to run nodes in Sonic’s HyperGrid network.
Each NFT represents the operating rights of a Guardian Node, and different levels of NFTs correspond to different node weights and reward ratios.
The first thing to be clear about is what is the purpose of running this HyperFuse Guardian node?
In HyperGrid, Guardian nodes are an important part of maintaining the normal operation of the network. The main responsibilities of these nodes include monitoring network transactions and state transitions, detecting anomalies, verifying that the state submitted by the HyperGrid Shared State Network (HSSN) to Solana is correct, and ensuring that all operations in the Grids rollup meet security standards.
You can understand it in layman's terms as the role of a "verification node".
It is worth noting that even if users do not have the technical ability to run a node, they can still purchase NFTs and delegate them to other operators to participate in the network and receive rewards.
At the same time, the threshold for running a node is also very low, and you only need a browser to run a lightweight node.
Therefore, participating in HyperFuse Guardian Node operations not only helps maintain network security, but also brings potential financial rewards.
Token rewards: The project allocates 10% of tokens for rewards, of which 9% are used for node operation rewards and 1% are used for network expansion rewards such as referrals and invitations (the unlocking rules for different rewards are as follows).
In terms of specific rules, Sonic divides the pre-sale of the node NFT into three stages:
Lottery phase: September 16, 2024 13:00 UTC (lasts 24 hours)
Whitelist sale: September 18, 2024 13:00 UTC (lasts 24 hours)
Public sale: Starts at 13:00 UTC on September 19, 2024
Different nodes use a dynamic pricing mechanism, with unit prices ranging from $155 to $554. You can purchase on the Solana network using SOL, USDT, or USDC. NFTs at different levels have different purchase limits to ensure wider community participation.
It is worth mentioning that the initial price of the node NFT sale is relatively low. Starting at US$155 is not a very expensive price. At the same time, 70% of the nodes are within US$300.
From a grading perspective, the sale of Level 1 nodes (the cheapest) adopts the Fair Launch model, which is a relatively fair way of participation for most players. It is bound to have the highest appeal at a low price. Interested players can prepare in advance and participate on the 16th.
In addition, level 2 to level 8 nodes are only sold to white ticket holders, with prices ranging from $166 to $248. White tickets can be obtained through the testnet's odyssey activities and cooperative communities.
Currently known cooperative communities include MadLads, Solayer, Send, MonkeDAO and other well-known communities in the Solana ecosystem, as well as the broader crypto community.
Players interested in the specific rules can check here for more details.
From a valuation perspective, node pre-sales are good news for the community and retail investors, as some of the nodes offer lower costs than VC round financing.
In the first 30% of the node sales, the fully diluted valuation (FDV) remained below $100 million, which is lower than the valuation of the previous round of VC. This means that early participants have the opportunity to enter the project at a relatively favorable price and gain potential appreciation space.
It can be seen that the nodes also adopt a tiered pricing strategy. Early participants can obtain nodes at a lower price, and as the sales process progresses, the node price gradually increases. This not only rewards early supporters, but also provides investors with different budgets with the opportunity to participate, which is conducive to expanding the community base.
Conclusion
Solana’s Game Summer is still to come, but the people paving the way for its arrival are certainly worth paying attention to.
Sonic's powerful resource connection, professional products and activities have given existing liquidity and attention new destinations; whether it is professional freeloaders, ordinary players or game project parties, new, easy-to-use and well-anticipated projects will become the darlings of the market.
But how long it can be pampered also depends on Sonic’s own good operation and subsequent development. Water strives to be the first and to flow continuously. Iterating oneself in the ever-changing market expectations and demands is the survival philosophy for Web3 projects to go further.
