What’s Actually Happening On Solana Now?
Author: Rui, researcher at SevenX Ventures; Translated by: 0xxz@Golden Finance
Crypto and US stocks have decoupled and are less sensitive to rate cuts. Now on Solana, the meme is fading, sandwich bots are making a killing, and many people are “told you so.”
The constant criticism of network stability, base and storage fee flaws, single client dependency, etc. has many people expressing skepticism and hatred. We can all agree that we are in the Age of Discovery - if people haven't lost faith. This is the ultimate warm-up for the lovers and haters before the Solana Breakpoit conference.
“The wider the road, the more congested it is.”
Higher TPS will lead to “induced demand”, which will attract more crazy projects, leading to more traffic and congestion, like what happened on ORE. Multiple efforts are being made to scale Solana:
Mainnet level: anza.xyz solves the scheduler problem by avoiding "locking" of conflicting transactions. Like Jump's firedancer client, Jito enhances horizontal scalability, improves fault tolerance, and reduces latency.
Rollup level: always faster than mainnet with co-located nodes. Batcher (temporary) solutions like magic block maintain smart contracts and liquidity on mainnet while maximizing efficiency.
“What is the mission of Solana Rollup?”
Ethereum and Solana have different L2 services. Op and Arb are solving Ethereum’s scaling problem. However, on high-performance Solana, simply emulating L2 may be redundant.
Solana L2 can focus on special-purpose runtimes such as gas-free transactions, privacy, signature verification, different block times, MEV strategies, etc.
Zeta Markets is developing its perpetual contract DEX, Drift Protocol can reorder a transaction, and Grass is used for massive data verification. (Avoid using all the terms proposed by OG Equilibrium investment partner mhonkasalo and Multicoin founder Kyle Samani here).
“Will CEXs push LST on Solana?”
I am not a member of the LST fan club. Solana staking is easy and can be unstaked at any time, making native staking with no contractual risk the choice of 93.7% of stakers. Jito captures most of the remaining market by incentivizing its MEV revenue.
Information from Binance, Bitget, Bybit indicates that new players are entering the LST market, and Sanctum's unlimited LST pool is expected to increase liquidity. However, the real question is how to translate into real user growth. Imagine LST with PayFi: use the proceeds to pay for your Helium 5G subscription instead of USDC, or follow the example of Santum founder soleconomist staking LST to support creators to earn returns.
In terms of re-staking, Jito, Squads Protocol, Renzo Protocol, and Fragmetric have started re-staking, and Solayer has also joined the competition. I hope someone can provide me with a more powerful AVS as soon as possible.
“Why do people need cryptocurrency?”
DePIN. I am a Helium 5G user, it is fully functional and cheap. Now they want to become a "network of networks" - open more DePIN to build on existing equipment or networks, help them achieve compliance, operations, etc.
AI. I don’t know if exolabs will eventually be implemented on Solana, but imagine end users using edge devices to run your AI clusters — real users, real incentives, real value. In addition, expect more AI trading bots to provide easy and intelligent access.
PayFi. Using Sling Money and Tiplink on mobile access, Buy Now Pay Never provides an opportunity to maximize the time value of money.
Prediction market. Drift brought us election predictions; but who says you can’t predict the price of a meme? There are jogojogo and Ratex’s revenue opportunities.
Meme is not the original sin, the other side of the coin is fair launch. We must consider business ideas that can grow and be sustainable, rather than purely bullying minorities.
“What’s the fair question to ask?”
If almost all Solana applications are centralized, what’s the point?
It’s unfair to blame applications for wanting to build moats and be private. Protocols can’t take all the profits.
Why does MEV extract so much unethical value from the meme, aren’t sophisticated participants competing to reduce slippage to protect users?
Applications should improve the user experience through fair and (automatically) accurate slippage, perhaps using a validator reputation system based on execution slippage.
Who is building Solana DeFi?
Jupiter Exchange serves as an interface, while AMMs such as Raydium Protocol and Orca work in a permissionless manner; perpetual contracts include Drift Protocol and Zeta Markets; exchanges have Backpack; stablecoin infrastructure includes Perena; bringing digital assets into more SVMs includes Metaplex; lending includes SEND, and so on.
“It is not a sin for a bird not to be able to swim”
Blockchain has different lineages. The best globalization is localization - this is what I learned at Tiktokus, they have identified 5 important strategic regions: Southeast Asia, Middle East, North America, Europe and China. Different languages, compliances, resources, policies, culture and atmosphere.
Now, living in New York, I feel two powerful armies.
Base is an EVM-compliant army, and its TVL dominance is dominated by stablecoins - thanks to the support of Coinbase and Circle. In addition, cbBTC may be its next big hit.
However, Solana is more like a regular army, a real retail carnival. If you think it won’t be the home of RWA, then I’ll let you win, but look at the non-stop fighters like Solana labs co-founder Toly, Helius Labs CEO Mert, Solana Foundation Chairman lilyliu, Colossum, hackathons and communities from the United States, Singapore, South Korea and China where people celebrate, gamble, have fun, and live in an efficient and affordable world.
SoLaNa What is happening now? Build and implement it.
