Written by: Asher Zhang
Solana has released three innovative technologies, Actions, Blinks, and ZK Compression, which have attracted much attention in the market. What are the characteristics of Solana's three new technologies? What are the other reasons for Solana's strong performance in the second quarter? How will Solana develop in the future?
What are Actions, Blinks, and ZK Compression? And how innovative are they?
On June 24, Mert Mumtaz, CEO of Solana ecosystem development platform Helius, announced on X platform that ZK Compression is being introduced to Solana. On June 25, the Solana Foundation announced the launch of two new features: Solana Actions (transactions) and Solana Blinks (blockchain links). With the launch of a series of new features, Solana has once again sparked heated discussions in the market. So, what technical innovations do Actions, Blinks, and ZK Compression have?
Solana Actions is an API designed to allow websites to interact with the Solana blockchain and implement on-chain activities such as transfers, voting, and donations. It is a compliant API that returns transactions on the Solana blockchain, which can be previewed, signed, and sent in a variety of different contexts, including QR codes, buttons + widgets (user interface elements), and websites on the Internet. Users can send various transaction instructions through Actions, such as on-chain asset transfers and purchases of token assets. At the same time, developers can also use Actions to call and execute smart contracts to implement complex on-chain logic. Actions has the characteristics of high performance, low latency, and high flexibility. Its emergence makes Solana network application development and user transactions more convenient, while also adding support for the execution of on-chain smart contracts and laying a solid foundation for Solana to enter the SocialFi field.
Blinks is a concrete representation of Actions, which can be a QR code, a URL, a clickable button, etc. Blinks can convert any Solana Actions into any dissemination method on any information platform, allowing clients that can detect Actions (such as browser extension wallets, robots, etc.) to display additional functions to users. When using Blinks, users can operate specific matters on the current platform page without entering the Dapp behind this concrete representation (which can be a QR code, URL, etc.), making the interaction method extremely convenient and simple.
What is ZK Compression? ZK Compression uses a process called state compression to enable developers to use Solana's ledger space in a more economical way, rather than more expensive account space, to store certain types of data. ZK Compression uses the hash value of off-chain data to store on-chain, stores specific data off-chain, and verifies it using the state tree. The application of this technology can effectively reduce the demand for on-chain storage space, thereby reducing costs and improving overall scalability. By adopting ZK Compression technology, the Solana ecosystem can handle large amounts of data more efficiently and provide developers with more flexible storage options, promoting the development and innovation of blockchain applications. Solana's official documentation defines ZK Compression as: ZK Compression is a new basic function built on Solana that helps developers and users build applications at scale.
From a technical point of view, Actions and Blinks are a set of development tools that make it easier for developers to integrate applications, which helps blockchain applications become more user-friendly like Web2 applications. From a technical point of view, ZK Compression is mainly committed to reducing the development costs of developers. Overall, Actions, Blinks and ZK Compression are all committed to promoting Solana towards large-scale applications. However, Solana's above-mentioned innovations still have many shortcomings. For example, the use of Blinks is currently limited to the computer side.
Crypto V Haotian wrote that (the launch of Blinks, etc.) faces many practical challenges. For example: directly implanting interactive links on Twitter for interactive payment can bring a certain experience upgrade, but the adaptation issues between mobile and desktop terminals, the cognitive gap and trust issues of users clicking on links, the potential security risks and obstacles behind the links, etc. are all fundamental factors that affect the in-depth application of this interactive method in the short term. Personally, I think that what Blinks can bring to Solana and how many platforms and users can accept it still lack a "rigid" driving factor. Imagine that users use Bots on Telegram to grab chips faster, but what would be the motivation for users to use Blinks? Voting, mini-games, rewards, etc. are obviously not powerful driving scenarios.
Solana's impressive performance in the second quarter: Which ecological protocols contributed to this?
The overall performance of the crypto market in the second quarter was actually lackluster, but the MEME craze on Solana became a rare hot spot in the crypto market, which also made the overall performance of the Solana ecosystem eye-catching in the second quarter. The most noteworthy of these is the pump.fun protocol, which benefited from the Meme craze brought about by pump.fun, further making the DeFi ecosystem on Solana hot.
pump.fun drives the meme coin craze on Solana. pump.fun is a meme coin launch platform on Solana, where users can easily create meme tokens on the platform without providing liquidity. In May, several celebrities launched their own tokens on pump.fun, triggering a celebrity meme coin craze on Solana. According to DefiLlama data, pump.fun generated $48 million in revenue in the second quarter, an average of $525,000 per day.
pump.fun indirectly promotes the activity on the Solana chain. According to Dune data, in the second quarter, the number of transactions deploying Meme coins on the Pump.fun platform alone exceeded 1 million; the number of active addresses and new addresses on the platform was also on an upward trend throughout the second quarter, and the average number of daily active addresses exceeded 60,000 in June. Correspondingly, in the second quarter, the proportion of fees generated by non-voting transactions in Solana network transaction fees increased significantly.
With the active trading on Solana chain, the DeFi ecosystem on Solana has also performed strongly. In the second quarter, the DEX trading volume on Solana surged, and the average daily trading volume of spot DEX increased by 32% month-on-month to $1.6 billion. It is worth noting that Raydium has been the biggest beneficiary of the Meme coin launch platform pump.fun, because once the token reaches the market value threshold of $69,000, all liquidity of the pump.fun joint curve will be transferred to Raydium.
Jupiter’s spot trading volume and derivatives TVL also increased significantly during Solana’s meme carnival. Between Q1 and mid-Q2, Jupiter accounted for more than 50% of DEX trading volume. In addition to spot, derivatives trading volume on Solana has also grown significantly. Zeta Markets is a perpetual DEX on the Solana ecosystem. Zeta Markets’ average daily perpetual contract trading volume increased by 212% quarter-on-quarter in the second quarter, reaching $82 million.
What will Solana look like in the future?
Solana has performed strongly in this round of bull market and has always been a hot spot in the market, and there are certain surprises every once in a while. In the early days, the DePIN track in the Solana ecosystem was highly expected by the market, and a number of leading projects emerged, such as Render, Helium, etc.; subsequently, leading projects also emerged in the full-chain game, AI and other tracks in the Solana ecosystem; recently, the overall performance of the crypto market has been weak, but the MEME track has once again made Solana the focus of attention, and a number of projects such as WIF and BONK have emerged.
Solana recently announced a 2.0 upgrade, which still has great potential in the future. From the perspective of the Solana ecosystem, Solana launched Solana Mobile, highlighting its commitment to mobile integration. Currently, Solana Mobile 1 has 20,000 users, and Solana Mobile 2 has more than 50,000 pre-orders. This provides a direct distribution channel for the DePIN project to solve the initial user acquisition challenges. DePIN will continue to be an important development pillar for Solana in the future.
In addition to DePIN, Solana's important strategy is undoubtedly to move towards Web2. In December 2023, the Firedancer validator was launched, paving the way for Solana's large-scale adoption; earlier, Solana integrated with Paypal to open up payment channels. With the emergence of new technologies such as Actions, Blinks, and ZK Compression, Solana is further moving towards large-scale adoption.
Overall, Solana has technical advantages such as high performance; as its technology matures, Solana's next step is to achieve large-scale applications. At present, Solana's series of actions are mainly aimed at continuously lowering the development threshold for developers and the usage threshold for users.
