What exactly happened on Solana?
Today, the correlation between cryptocurrencies and US stocks has weakened, and the sensitivity to interest rate changes has also decreased. On Solana, the meme craze is fading, while sandwich bots are making a fortune, which many people expected. The network's stability issues, shortcomings in base and storage fees, and reliance on a single client have been criticized, and many people are skeptical or even disgusted. If you haven't lost faith yet, we can all agree that we are in an era of exploration.
This was the ultimate warm-up for enthusiasts and critics before SolanaConf.
“The wider the highway, the more congestion it will cause.”
Higher TPS (transactions per second) leads to “induced demand”, attracting more crazy projects, which in turn leads to more traffic and congestion, as in the case of OREsupply. To scale Solana, there are multiple efforts underway:
On the mainnet level: anza_xyz solves the scheduling problem by avoiding "locks" on conflicting transactions. Clients like jump_firedancer and jito_sol enhance horizontal scalability, improve fault tolerance, and reduce latency.
At the Rollup level: consistently faster than mainnet, with co-located nodes. Batch (temporary) solutions like magicblock maintain smart contracts and liquidity on mainnet while maximizing efficiency.
“What is the mission of Solana Rollup?”
Ethereum and Solana’s second layer (L2) networks each have different roles. Op and Arb are solving scaling issues for Ethereum. However, on high-performance Solana, simply emulating a second layer network may be redundant.
Solana’s L2 can focus on runtimes for specific uses, such as gas-free transactions, privacy protection, signature verification, different block times and MEV policies, etc. ZetaMarkets is working on its perpetual contract DEX, DriftProtocol may utilize L2 for transaction reordering, and getgrass_io is used for large-scale data verification. (Avoiding the term coined by mhonkasalo and KyleSamani, etc.).
“Will centralized exchanges boost LST on Solana?”
I am not a big fan of LST. Solana’s staking is very simple and can be unstaked at any time, which makes native staking, which is free from contractual risks, the first choice for 93.7% of stakers. Jito captures most of the remaining market by incentivizing its MEV income.
Recent news from binance, bitgetglobal, and Bybit_Official indicate positive LST inflows, and sanctumso's unlimited LST pool is expected to boost liquidity. However, the real question is how to translate this into actual user growth. Imagine LST combined with PayFi: use the proceeds to pay for your Helium 5G subscription instead of USDC, or like the soleconomist example, support creators with the proceeds by staking LST.
Re-staking, jito_sol launched cooperation projects with SquadsProtocol, RenzoProtocol and fragmetric, and competed with solayer_labs. Hope to see more powerful AVS solutions soon.
“Why do people need cryptocurrency?”
Decentralized Internet of Things (DePIN). I am a user of Helium5G, which is not only powerful but also cheap. Now, they want to become a "network of networks" - this means opening up more DePINs to build on existing devices or networks, while helping them with compliance, operations, etc.
Artificial Intelligence (AI). While it is uncertain whether exolabs will eventually run on Solana, it is conceivable that end users will use edge devices to run AI clusters - which means real users, real incentives, and real value. In addition, more AI trading bots are expected to provide simple and intelligent access.
PayFi. Available easily on your phone through slingmoney and Tiplink, Buy Now Pay Never offers the opportunity to capitalize on the time value of money.
Prediction markets. Drift brought us prediction markets for elections, but who says you can’t predict the price of a meme (like jogojogo), earnings (like rateX), or even more broadly?
Meme is not a sin, the other side of the coin is fair issuance. We must consider sustainable business ideas instead of simply deceiving a minority.
“What are the issues worth discussing?”
If almost all Solana applications are centralized, what’s the point?
It’s unfair to blame applications for wanting to build moats and private ownership. Protocols can’t capture all the profits.
Why does MEV extract so much unethical value from the meme, aren’t mature players competing to reduce slippage to protect users?
Applications should improve the user experience by providing fair and (automatically) accurate slippage, perhaps by building a reputation system for validators based on their slippage execution.
Who is building DeFi on Solana?
JupiterExchange serves as an interface, RaydiumProtocol and orca_so take a permissionless approach; perpetual contracts have DriftProtocol and ZetaMarkets; your favorite exchanges Backpack and Perena__ provide stablecoin infrastructure, metaplex brings digital assets to more SVMs; there is also the lending platform thesendcoin, etc.
“It’s not a mistake that birds can’t swim”
Blockchain has its own development path. The best globalization is localization - I learned when I worked at tiktok_us that they regard Southeast Asia, the Middle East, North America, Europe and China as five important strategic regions. These regions are different in language, compliance, resources, policies, culture and atmosphere.
Now living in New York, I feel two powerful forces - base, as a representative of EVM compliance, its total locked value (TVL) is mainly dominated by stablecoins, thanks to the support of Coinbase and Circle. In addition, cbBTC may be its next major project. However, solana is more like a paradise for ordinary users, a real retail carnival. Even if you think it will not be the home of RWA, I am willing to accept it, but look at those who keep working hard, such as aeyakovenko, 0xMert_, calilyliu and Colosseum's hackathon, and communities from the United States, Singapore, South Korea, and China, where they celebrate, gamble, have fun, and live in an efficient and affordable world.
What is happening with Solana right now?
Build it and make it happen.
