Author: Nakamao, BlockBeats
'I will now buy all the SOL you own at the market price of $3, you can sell it anytime, and then you can just get lost.' This was FTX founder SBF's reply on Twitter to a trader who was not optimistic about Solana on January 10, 2021. 'SOL is about to receive huge buy orders because every billionaire in the world is calling me and SBF (to inquire about Solana).' On December 1 of the same year, Multicoin Capital managing partner Kyle Saman tweeted. By then, the price of SOL had surpassed $230, with an annual increase of over 150 times, becoming a star in the entire cryptocurrency industry.
'The following are the reasons for the disappearance of the Solana chain and the zeroing of the SOL token.' This is a tweet from a year later, in December 2022, where ETH maximalist James Spediaccid predicted that SOL would be wiped out of the crypto market. At that time, SOL was affected by the crypto winter and FTX's bankruptcy announcement, dropping to as low as $8, with 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 SOL price reached $260, breaking through the previous bull market's peak. The increase from the low to the high exceeded 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 so uncommon. Anatoly Yakovenko, a Ukrainian former Qualcomm engineer, wanted to create an on-chain order book trading platform. He quickly realized that Ethereum could not support such a large throughput for on-chain transactions. One night after drinking three cups of coffee, Anatoly couldn't 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, Solana did not have a smooth fundraising phase. In 2018, the Solana team went to Asia for fundraising, coinciding with the bear market in the crypto market, which had already been harmed many times by the rhetoric of high-performance public chains, so Solana faced obstacles in fundraising in China, Korea, and Japan.
In 2019, Anatoly, who participated in Blockchain Week in Shanghai, was already somewhat famous. During that event, new chains like Solana and Near continuously appeared at various side events. Anatoly explained to others what Solana was over and over again, but most people didn't really pay much attention, just like Vitalik a few years ago in China.
In the end, after several rounds of fundraising, the Solana team raised a total of $25.53 million, which is far lower than the star public chains that now raise hundreds of millions, and also lower than the public chains like Near and Avalanche that issued tokens in the same round.
The rise of Solana - SBF's choice
In fact, after the mainnet launch, no one really paid attention to Solana, such as when the network interrupted block production due to some issues, and the community didn't notice. It wasn't until the second half of 2020 that Solana officially entered the public eye. The only reason was that SBF, the founder of FTX, came along. Solana's true rise was undoubtedly inseparable from SBF's support. According to Mable, SBF and Solana's meeting seemed not just coincidental but more like a mutual choice.
At that time, FTX had just been established for a year and quickly seized its territory in the trading space. SBF, coming from Wall Street, indeed showed the crypto industry something different, not only in trading tools that differed from other competitors but also by deeply engaging in the industry, participating in every hot topic.
In the early days of DeFi Summer, SBF wanted to put as many trades on-chain as possible. So the SBF team actively reached out to stars like Polygon, Avalanche, and Near. Market rumors at the time suggested that FTX was most interested in Near, but their mainnet launch would take some time. However, SBF couldn't wait. Kyle from Multicoin learned of this news and found a way to introduce Anatoly to SBF.
In the early hours of July 2020, Kyle had a 3-hour conversation with SBF, piquing SBF's interest. The next day, the Solana chain suddenly suffered a dust attack, with countless small transactions happening simultaneously and for a long duration on Solana. Yes, it was SBF who wanted to personally test the actual performance of the Solana chain. Ultimately, Solana withstood the massive amount of junk transactions from SBF's team. On that same day, SBF decided to invest in Solana. A few days later, the design of the decentralized order book matching engine - Serum, incubated by FTX, was born.
Subsequently, the Solana ecosystem experienced explosive growth.
The rise of Solana's ecology
First, Serum's circulating market cap exceeded $1 billion at its peak, while projects like Raydium, Oxygen, and Star Atlas from the Solana ecosystem landed on FTX.
Moreover, FTX's support meant that other centralized exchanges had to start integrating and supporting this new Layer1 network, significantly elevating the priority of Solana-related matters on major centralized exchanges. SBF also personally created a group for Anatoly and Jeremy, the CEO of USDC's parent company Circle, to support USDC's integration with the Solana chain.
In addition to SBF's support, the Solana team itself was actively hosting 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. With its performance advantages and SBF's unprecedented absolute pull power, the Solana token SOL rose from less than $1 to its peak of $248 in 2021, creating a myth.
At that time, Solana was ranked behind the top chains Ethereum and BSC. It couldn't be said to be the absolute king of public chain ecology, but compared to contemporaries like Avalanche and Near, Solana had fundamentally changed with the support of FTX. However, no one expected that SBF would run into trouble.
Curtain call
In 2022, the crypto winter arrived, and with the collapse of the Terra (Luna) ecosystem and Three Arrow Capital (3AC), market panic spread continuously. Ultimately, under the combined effects of internal and external factors, Solana's biggest supporter, also the most powerful supporter in the industry at that time, fell - FTX announced its 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 in crypto asset losses but also directly destroyed the important underlying protocol of Solana's DeFi ecosystem, Serum. Because important permissions were held by FTX, this foundational protocol quickly announced its invalidation.
Affected by a series of 'catastrophic' events, Solana's TVL (Total Value Locked) also plummeted from a bull market peak of $10 billion to around $200 million, with a series of star projects choosing to leave the Solana ecosystem and migrate to EVM chains.
Worse still, Solana's technology frequently encountered problems. In mid-2022, the network was interrupted multiple times due to a surge in transaction volume. All of this made the outside world question the reliability of its technology. Downtime seemed to become a proprietary term for Solana.
The community was in mourning, and the SOL token kept falling, seemingly Solana was 'beyond saving.'
The rebirth of Solana
Five days after the SOL token fell to $8, Ethereum founder Vitalik Buterin tweeted.
'Some smart people tell 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 difficult to judge from the outside, but I hope the community gets a fair opportunity to develop.
Vitalik's remarks seemed to be a reassurance, and the SOL token responded with a price increase. The panic among the Solana community was alleviated by the subsequent continuous rise.
In the following days, besides Multicoin continuing to firmly support Solana, Chris from Placeholder has been publicly supporting Solana since December 2022, while another partner, Joel Monegro, who had previously written about the Fat Protocol at USV, published 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 what happened in 2024, everyone knows that the dust attack that SBF tested in the early morning became a reality. When hundreds of new assets were issued every minute and tens of thousands of transactions occurred simultaneously, it was only Solana that could perfectly support this massive trading feast. With the birth of meme projects valued at several billion dollars, SOL climbed from $8 to an all-time high, reaching a market value of $100 billion.
Why did Solana reach new heights?
Precise rhythm control by the team and foundation
In the darkest moments following the FTX collapse, Solana's fate seemed to have already been determined. FTX was not only Solana's investor but also one of its most important ecological promoters. However, the collapse of FTX not only left Solana without 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 the network infrastructure. By improving validation mechanisms and controlling transaction traffic, they effectively reduced downtime incidents. This steadfastness, undeterred by outside pressure, helped Solana regain some trust from the community.
However, what truly made the market pay attention to Solana again 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 its efforts in organizing hackathons, attracting global developers' attention. These activities 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, over 4,000 projects went live, and a total of more than $600 million was raised, giving birth to star projects like Jito, Tensor, io.net, Marinade, and Solend.
Hackathons are not just platforms for developer交流, they are also an important source of innovation for the Solana ecosystem. Many projects quickly landed after the hackathons, injecting strong momentum into the ecological prosperity.
The victory of pragmatism
Mable, who experienced Solana's rise, mentioned when summarizing the reasons for Solana's success: 'The Solana founders have a small ego, and the entire team has a very pragmatic style. They don't have too many obsessions and don't feel the need to have a set of scriptures. Whatever can help the project gain more attention and recognition, they try it. They are not afraid of losing face and failing 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, Solana became the preferred network for MEME trading. This focus on practical applications also allowed Solana's ecology to exhibit a wide diversity, covering all aspects of users' lives, from payment tools to Web3 social, and consumer-grade devices.
This pragmatic technical style is not only popular 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 the potential of Solana's technology. These collaborations not only expand Solana's application scenarios but also open the door for it to penetrate the mainstream financial world.
Summary
Solana's performance in 2024 is remarkable, showcasing a strong on-chain economic vitality, even approaching or surpassing Ethereum on multiple key metrics. With its extremely high transaction throughput and very 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, pumpfun attracted a large number of new users, making Solana the center of secondary market trading.
From hitting rock bottom to standing on top again, the story of Solana may not just be a victory for one project, but a symbol of resilience in the cryptocurrency industry. In terms of price performance, SOL's market value has reached 33% of Ethereum's, skyrocketing more than 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 ecological recovery capability and market appeal. Whether it's payments, DeFi, or the trading frenzy of MEME coins, Solana is proving with real data that 'from zero to the top, Only Possible On Solana.'
