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Today’s essay, everything, is presented by… solana
hello friends 👋,
Today we are breaking some rules that are not boring and I want to explain why.
So far, I’ve only done sponsored deep dives on Thursdays, never on Mondays. As a reminder, you can read how I choose companies to write sponsored deep dives for here.
A couple of months ago, I started talking to ben sparango and austin federa on the solana labs team about doing a sponsored deep dive. in the smallest of small worlds, ben and i grew up in the same neighborhood and are family friends, and last year he joined the solana labs team as strategy lead. I started researching solana earlier this year and have been very impressed. I included sections on solana in who interrupts the disruptors? and own the internet.
we picked a date for this deep dive, last thursday, and i asked austin what the dream result of the play was. His response: “We want people to have an accurate understanding of where Solana excels and where she’s not as strong.” no pumping, no shilling, just a fair, balanced and honest assessment of solana.
Then, just over a week ago, Solana broke out and entered the mainstream. its price almost doubled. is attracting the interest of mainstream users. if there hadn’t been a scheduled deep dive, I’d probably be writing about solana anyway (please don’t tell the solana team!). so i decided to move the deep dive to today, monday.
I’m not going to make a habit out of this, but I felt solana is so relevant, has so many exciting things going on, and will play such a big role in the future of crypto, that it was worth making an exception this time.
I am writing this article as I would write any Monday article. there is no tracking link and I am not asking you to buy anything. I just want to tell you about solana and the role it will play in expanding crypto’s addressable universe, before everyone else catches up.
Disclaimer: This is not investment advice! sun has risen a lot in the last few weeks, I have no idea what will happen in the short or long term. I own a small amount. This is for educational and entertainment purposes only. Do your diligence, degenerates.
let’s get to it.
I have a confession. Last Saturday night, Puja was out of town. the baby was asleep. And I did something on the internet that I’m not proud of.
shortly before 8 p.m. We were all there to get into NFT’s last big mint on the ground floor: Degenerate Ape Academy.
There is a new nft drop every hour these days. degenerate apes are handsome, obviously, and a bit more three-dimensional than the punks or apes you’re familiar with, but that’s not what makes this release special. what made this release special was that it was one of the first big nft releases on solana.
solana is a layer 1 protocol, or blockchain, like bitcoin, ethereum, or several others. I have written about solana in not boring before. On the internet, I wrote that solana is one of the non-ethereum blockchains that I am most optimistic about.
Technically, what makes solana interesting is that its radically different system architecture leads to much higher speeds and lower costs than other blockchains. while bitcoin can handle around 7 transactions per second (tps) and ethereum can handle 30 tps (until eth 2.0 drastically increases it), solana can currently handle 65,000 tps.
While it currently costs ~$3 to transact on the bitcoin blockchain, and ~$8-40 on ethereum, it costs $0.0001 to transact on solana.
That’s an absurd performance. Solana’s goal is “for a decentralized network of nodes to equal the performance of a single node.” if that sounds too technical, the proof is in the experience. i spent a lot of time playing with solana: bought sol on ftx.us, downloaded ghost wallet, staked and unstaked, bought ray on raydium and staked, and i must say its very fast and very cheap. . you don’t need to think twice about doing something because it moves so fast and costs so little. that is the point. feels like using the internet.
how she does it is solana’s magic. We’ll get into the nitty-gritty, but for now, what you need to know is that solana uses a proof-of-stake plus proof-of-history” consensus mechanism, a decentralized time source that solana’s CEO labs and founder anatoly yakovenko told me is “the implementation of the arrow of time in mathematics”. sounds amazing, and it is, but what it means is that transactions in solana are verifiably ordered without all nodes having to agree simultaneously. that’s what makes it so fast.
also means that solana can be of a single fragment. while eth2 is expected to hit 100,000 tps, it and other new blockchains will do so by sharding, creating sidechains that link to the main ethereum blockchain. solana does everything in a single chain, in a single state.
solana may have the best technology of any blockchain on the market, but the best technology is wasted without a strong community of developers and users. the solana community is strong and passionate. you can see them by pit viper’s shadows on his pfps and ◎ where the o’s should be. but needed something to get him into the crypto stream.
Which brings us back to those degenerate apes.
Last Saturday, I waited over two hours with a group of irate would-be ape owners while the degenerate ape team figured out how to handle all the demand. one of the tools they used couldn’t handle the load. at 9:52 p.m. m., finally started up.
when the mint was finally released i was stuck, i kept staring at this screen no matter how many shapes i tried to get around.
The 10,000 apes were exhausted in eight minutes. didnt get one while sitting there mad at myself for wasting the night away from a degenerate ape cartoon auction eating pizza and stuff i started writing a section for this piece on why i thought it didnt make sense for an nft brand new project in solana. ethereum could own culture, solana could own high frequency trading.
but, as we all know by now, I’m an idiot.
Almost immediately after the launch ended, as I typed those words, the price of solana’s native token, sol, began to plummet. at 10 pm. est, it was at $45.24. reached $79 this weekend and currently sits at $73.50, corresponding to a market cap of $21.2 billion and a fully diluted market cap of $37.1 billion.
there are direct reasons why the apes increased the price. people needed to buy soles to buy monkeys, and at ◎6 per monkey, the release locked in 60,000 soles. once people bought sun and experienced the speed and low transaction costs for themselves, they became more optimistic.
but the biggest reason is that crypto is driven by narratives. it is a global game of intersubjective chicken. To start a new blockchain or app, you need to convince people that other people will also use that blockchain or app. the best blockchain technology in the world is useless without people building on top of it. the fact that all these people saw all these other people doing things in solana was a point in favor of the chain.
and it’s about people. Despite all the talk about technology, decentralization, and lack of trust, the success of any crypto project depends, to a surprisingly high degree, on people.
The right people in the corner of a project give it crucial credibility.
The name of the game is to convince as many people as possible to rely on your protocol.
then, it’s about those developers to properly attract and incentivize users.
luckily for solana, she has the right people, like anatoly, sbf and a16z.
crypto is a game of self-fulfilling beliefs. and the participation of the correct names helps to create belief. if technology can back it up, there could be something special afoot.
now, to be clear, this is not a post about why solana is the best blockchain, the eth-killer, the one chain to rule them all. i love ethereum, eth is my biggest involvement in crypto, and most of the time i (and others) spend interacting with crypto via nfts, defi, and daos, is spent on ethereum. ethereum is where the smartest people in crypto spend most of their time.
but I’m also a maximalist minimalist. when I wrote own the internet to expose the bull case for ethereum, I said the same thing:
There are a lot of maxi somethings, people who think theirs is the only solution, but I subscribe to the idea that every successful l1 or l2 will focus on what they do best and interoperate with others who do something else better. I am a maximalist minimalist.
Tribalism is strong in crypto and makes sense. If some magical internet money made me a billionaire or billionaire in a decade, I would defend it to the death and recruit others to the cause to make my magical internet money worth even more.
Tribalism is fun, it’s like sports, but that’s not what makes all of this so fascinating to study. the good comes from figuring out how it all fits together: how certain chains complement each other while others compete, why people build on one chain versus another, where people choose to spend their valuable time and money online. Nowadays, people spend more time and money than internet in solana ecosystem.
they are platform wars, with interoperable platforms, that take place in real time, and it is still very early. there will be multiple massive winners, and i think solana will be one of the biggest.
When I originally planned this piece, it was to let you know about a lesser-known blockchain that was about to blow up. but in crypto, you blink and everything changes. Solana is now a real contender, and deserves her own deep dive to explain why and what’s next. so today we will cover:
the core questions
the story of solana
how solana works
case studies: star atlas, saber, audius
how the value for solana is accumulated
bull case for solana
bear case for solana
Ultimately, solana’s success or failure comes down to two questions…
the central questions
Blockchains and cryptocurrencies are relatively new. they can look strange and be a little scary. Part of what I’ve been trying to do to not get bored this year is show that ultimately crypto projects are subject to the same dynamics as any business.
so while we explore all this complex technology and learn new things, let’s simplify it by keeping two questions in mind:
can solana convince developers to build on top of it?
Can those developers attract users to their product?
I wrote those two questions before solana released this rebrand on Friday night:
powerful for developers. quick for everyone. attract developers who attract users. that is all.
in the short term, there is speculation, noise and blockchain tribalism. There are arguments about trade-offs between decentralization, scalability, and speed. but in the long run, it all comes down to attracting developers who attract customers. anatoly has repeatedly said that with the technology in place, the next phase is “onboarding the next billion users“.
while coinbase has 56 million users, anatoly uses people who “control their own keys”, by using something like a metamask or ghost wallet, as a proxy for real crypto adoption. without controlling your keys, you can’t really engage in cryptography. by that count, there are only a few million users.
It’s too early, both for cryptocurrencies and for sunshine itself. even solana’s idea is only four years old.
story of solana
“I was manic for a week.”
In a recent special episode of Acquired (which you should listen to if you want to dig deeper here), Anatoly told Ben and David about the moment he realized it might be possible to build an Arrow of Time.
Anatoly is a seasoned engineer by experience, having spent 13 years at Qualcomm, where he was most recently Senior Manager of Staff Engineers.
at qualcomm, anatoly worked on wireless technology very close to the metal, such as working on code division multiple access (cdma) chipsets, which allow multiple transmitters to send information simultaneously over a single communications channel.
He left Qualcomm in 2016 to work at Mesosphere, which built an IT infrastructure optimized for businesses, and joined Dropbox in 2017 to work again on making distributed systems faster and more efficient.
So, when cryptocurrencies began to take off in 2017, minting millionaires and creating network congestion, anatoly was perfectly prepared. In October, he realized that he was crazy: Blockchains have the same problems as communication networks and could have the same solutions. as he explained in acquired:
I had two coffees and a beer, and was up until 4:00 am. I had this eureka moment that proof-of-work-like puzzle using the same sha-256 preimage resistant hash function, instead of running it in this massive parallel, use both electricity as you can to find this answer as fast as possible, you actually make that thing slow, recursive and force it to run on a single core on a single thread on the computer, you can force it to test that it is taking a certain amount of time, that there is an enforced delay before performing an action. I knew I had this arrow of time.
That arrow of time was both theoretically fascinating and practically important. it represented a way of keeping time between computers that don’t trust each other. Solana’s website explains: “A reliable clock makes network synchronization very simple. when synchronization is simple, the resulting network can be ultrafast, limited only by network bandwidth.”
Just five months into his time at dropbox, anatoly resigned to build his blockchain. In November 2017, he had written and published the solana whitepaper, “solana: a new architecture for a high-performance blockchain”. he then set out to raise money.
back then it wasn’t obvious that this would work. a vc i spoke to showed me a calendar invite for a december 2017 coffee meeting with anatoly to discuss the project. after coffee, it happened. there was a lot of competition to be the next big blockchain. this vc told me, “you had dfinity, polkadot, tezos, and cosmos, all of which had a lot of hype and a lot of funding.”
Some crypto funds saw the vision and committed, but when the twists came, the crypto markets began to unravel. all possible sponsors of solana withdrew.
Fortunately, as is clear from talking to him and listening to dozens of hours of interviews, anatoly is not motivated by money. he just wants to build cool shit on the outer limits of what’s technically feasible. While other blockchains launched before solana promised the moon, anatoly and team have just built.
It started with the team. raj gokal, director of operations at solana labs, joined in december 2017 from the world of health technology. In early 2018, Anatoly hired two former Qualcomm colleagues, Greg Fitzgerald and Stephen Akridge, to begin turning paper into a product. anatoly had started out in the c programming language, but greg convinced him to port it to rust. In February, Greg began prototyping an open source version, and at the end of the month, he made his first release. stephen pointed out that they could increase performance by handling signature verification in gpus. The co-founders incorporated as “loom” but quickly changed their name to avoid confusion with an ethereum-based project called the loom network.
in march, they named the company solana after solana beach, where anatoly, greg and stephen surfed together when they worked for qualcomm in san diego.
A 2019 New York Times story on Solana Beach called it an “aspirational suburb” and asked, “but can you afford it?” Similarly, and I admit I’m stretching myself here, the founders of solana had big blockchain aspirations, but they didn’t have any money in the bank. could they afford it?
in april 2018, solana found its first sponsors: ramtin naimi of abstract ventures, chris mccann and edith yeung of 500 startups (chris and edith have now merged to form race capital) participated in the initial sale of the company.
When I asked mccann why he invested, he said he knew anatoly from his time at greylock, when anatoly was an active member of the greylock infrastructure engineering community, and that he is “ridiculously impressive”:
in 2018 people were complaining about cryptokitties clogging up the network and anatoly said “i think i could design a solution for this”. it’s quite easy’. a lot of people were building l1 which were forks of ethereum. anatoly invented a completely new technology to solve it.
That initial faith was rewarded with what already appears to be one of the best venture investments of all time. (Race’s initial investment in ftx in 2019, now valued at $18 billion, is right up there.) According to this Binance research report, Solana raised $3.17 million by selling 16.23% of its tokens in an initial sale at $0.04 per token.
According to my calculations, beep bop boop, that $3.17 million is now worth $5.8 billion. That’s a return of 1,838 times in just over three years, good for an unprecedented 820% tir.
Over the past three years, solana has conducted five token sales, as tracked by binance research, in addition to the monstrous $314,159,265 (yes, that’s pi, nerds) token sale led by a16z and polychain announced in June .
While the price of the a16z/polychain round is not public, it is very likely that it was significantly discounted from the market price, which stood at $11.7 billion at the time of the a16z/polychain round, at change of a multi- annual vesting schedule. investors, including the community (via coin listing) and validators, have done absurdly well.
The vc I spoke to that happened said: “Maybe my biggest mistake in the company so far. The one I regret the most. Sure, there are worse, but this hurt.”
so what changed? where did solana succeed where other chains failed with an advantage?
first, the difference between solana and all those other chains was, of course, the speed and performance, not only on the blockchain itself, but also on the cadence at which the team created and sent. Noah Jessop put it succinctly: “I think they just nailed the focus. make the platform faster than anyone else.” there is very little altruistic nonsense with solana. they set out to build the fastest network possible, hired a bunch of grizzled engineers, and just built. they sent better product, faster.
With that foundation established and some money in the bank, according to Race’s McCann, Solana’s growth came in a series of waves and tipping points, all powered by people and supported by technology.
Before we reach people, we need to understand how the technology works.
how solana works
the first slide in the round solana seed deck read: “solana is blockchain at the speed of nasdaq.”
Remember when I quoted anatoly saying solana’s goal is “for a decentralized network of nodes to equal the performance of a single node”? this is what it means.
A centralized exchange like nasdaq is a single node through which all of its participants’ data is routed. someone who trades on the nasdaq pays to do so, and sets up a machine on the nasdaq that is connected by ethernet cables of exactly the same length as all the other participants, so that they can receive price information and send orders at exactly the same speed as everyone else. As Anatoly said at Acquired, “Your information reaches the markets at the same speed as everyone else. that’s censorship resistance.”
As long as everyone trusts nasdaq to provide accurate information as quickly as possible and is willing to pay to participate, that system works very well.
See also: Ethereum 2.0, The Merge, Triple Halving
The challenge is to achieve that same censorship resistance with a decentralized network of nodes that need to agree with each other on the state of the network without trusting a centralized entity. When I spoke to Anatoly in May, he explained that Solana is building a “censorship-resistant, globally distributed, single-fragment machine that ensures anyone can access orders and view information as quickly as possible.” .
The main benefit of decentralization in this case is that by cutting out the middleman and allowing people to trade peer-to-peer, more value accrues to both sides of the transaction. there are fewer entities between taking a cut. the main drawback of blockchains so far is that they have been too slow, underperforming and expensive.
The benefit of the single node is that it only has to agree with itself. Blockchains need to achieve consensus among a group of participants in an open and immutable way. they use consensus mechanisms like proof-of-work (pow) and proof-of-stake (pos) to do so.
consensus mechanisms come with trade-offs, captured in the scalability trilemma or the blockchain trilemma:
ethereum co-founder vitalik buterin wrote: “the scalability trilemma says that there are three properties that a blockchain tries to have (scalability, security, and decentralization), and that if you stick to techniques ‘simple’ , you can only get two of those three.”
Blockchains og bitcoin and ethereum (up to eth2) use proof-of-work (pow) consensus mechanisms to validate transactions. In proof of work, “miners” anywhere in the world use ever-increasing amounts of thermodynamic energy to solve increasingly difficult mathematical problems to validate new blocks of transactions. miners are rewarded with tokens for their work, some of which they keep and some of which they sell to pay for equipment and power. proof of work is decentralized and secure, but not scalable.
bitcoin and ethereum can handle much less than 100 tps with transaction fees in the $2-50 per transaction range. that works for sending bitcoins to another address or buying and selling nfts, which, even with all the recent activity, doesn’t happen dozens of times a second. plus, $50 in fees don’t matter for a $1 million purchase of a rock jpeg. however, nasdaq handles 500,000 transactions per second and is one of many exchanges. To decentralize the world’s financial markets, you need a solution with higher performance and lower costs.
Most new blockchains use a proof-of-stake (pos) consensus mechanism. ethereum is also moving to pos with eth2. In proof of stake, instead of miners validating blocks by expending energy, “validators” run a program on a specialized computer to secure the network by processing incoming transactions and voting and adding new blocks to the blockchain. each validator in the network can cast votes for which blocks it thinks should be added to the blockchain, confirming all transactions in the block. the votes of each validator are weighted by the number of tokens they have staked, or essentially presented as collateral to ensure they do not act dishonestly. if they validate correctly, they get rewards in the form of more tokens; if they behave dishonestly and try to push inaccurate blocks, they lose their bet. there is a game theory at play here: the number of tokens each validator has at stake is greater than what they should be able to steal if they misbehave.
solana uses pos, specifically “bonded proof of stake” (bpos), which means that anyone with sol can delegate their votes to any validator they choose and share in the rewards (or penalties) for validating transactions. according to vitalik, most high-performance dpos (similar but slightly different to bpos) blockchains are secure and scalable, but not decentralized.
The reason for this is that in a traditional POS system, each of the validators must coordinate with each other to understand when transactions are validated and which block to use next. if anyone can submit blocks at any time, validators must wait to see which block passed before adding the next block in the chain. with thousands of nodes, it would take an impractical amount of time to get a consensus, so they end up resorting to using a smaller number of validators. for example, the binance smart chain, with a throughput of ~160 tps, uses a proof-of-stake authority algorithm that requires only the 21 validators with the highest participation to reach a consensus to add a new block to the chain. binance controls 10 of the validators themselves. it is more scalable, but less decentralized.
eth2 plans to solve the trilemma by introducing sharding. as I wrote on the internet:
For scalability, sharding aims to increase throughput, or transactions per second, by 100x by creating 64 shard chains that validate transactions in parallel. each shard will only need to validate a fraction of the total chain, rather than each miner needing to validate the entire chain today.
That will allow ethereum to parallelize transactions by running 64 shards simultaneously and putting those shards onto the mainchain in batches.
solana takes a different approach, allowing you to keep all activity in a single fragment.
Anatoly’s key innovation was the test of history. In most blockchains, miners or validators need to communicate with each other to figure out how to order blocks. in solana, all the blocks act as radio towers, checkable with a clock. according to a 2019 blog post by anatoly:
using history proof creates a historical record that proves an event has occurred at a specific time. while other blockchains require validators to talk to each other to confirm that time has passed, each solana validator maintains its own clock by encoding the passage of time in a simple sha-256 sequential hashing verifiable delay function (vdf) .
This video is a helpful explanation:
Instead of waiting for other validators, solana validators can use the information encoded in the ledger to determine whether or not a transaction is valid. because poh allows for predictability, there will be no delays waiting for other validators, validators can take turns in a pre-scheduled “leader rotation”. only the leader can produce one ledger entry at any given time, based on an algorithmically generated random order, weighted by each validator’s stake. For example, if I have 10% of all bets, I know I will be the leader 10% of the time, but I won’t know what 10% of the time.
you can watch the leader rotation live at solana beach. it’s fascinating.
the proof of history is one of the “8 innovations that make solana the first web-scale blockchain”, the eight are:
proof of history (poh): one clock before consensus;
tower bft : a poh-optimized version of pbft;
turbine: a block propagation protocol;
gulf stream: transaction forwarding protocol without mempool;
sea level: execution time of parallel smart contracts;
pipeline: a transaction processing unit for validation optimization
cloudbreak – Scale-out account database; and
Filers: distributed log storage
If you want to dig deeper, you can click on those links and go all the way down the technical rabbit hole. For our purposes, what’s important to know is that those eight innovations combine to solve the scalability trilemma, making Solana scalable, secure, and reasonably decentralized.
It is important to dig a little deeper into the point of decentralization, because one of the main drawbacks against solana and other pos blockchains is that they are less decentralized than pow blockchains.
The generally accepted way of measuring decentralization is what Balaji Srinivasan coined the “Nakamoto coefficient“. Since you need to control 51% of a pow blockchain to take control, “we define the nakamoto coefficient as the minimum number of entities in a given subsystem needed to reach 51% of the total capacity. this, according to anatoly and raj, is really a measure of censorship resistance. balaji was writing about pow blockchains; for pos blockchains, he only needs 33% to stop the network (and 67% to produce arbitrary transactions of any kind).
while bitcoin and ethereum are theoretically more decentralized, because anyone can run a miner with cheap hardware, and solana requires more advanced hardware to maximize network capabilities, solana has a higher nakamoto coefficient than ethereum or bitcoin, and it’s on the rise. The reason is that while there are a greater number of bitcoin and ethereum miners than solana validators, those miners operate in “pools” that behave as one and often run software managed by the pool. As blocks become more difficult to mine, miners are more likely to pool resources. bitcoin’s current nakamoto coefficient is around 4. ethereum’s is 3 or 4. solana’s is 19, compared to december 8, which you can follow live on solana beach.
while the team’s goal is to continue to increase the nakamoto coefficient and thus resistance to censorship, solana appears to be decentralized enough, particularly given that most users care much less about decentralization than to crypto experts.
The next billion users will want a good user experience, faster speeds, lower costs, and more value in their pockets, and in that regard, solana shines.
What all this technology adds up to is a decentralized system that can handle over 60,000 transactions per second (with a theoretical limit of over 700,000 as technology and bandwidth improve). band) at a fraction of a cent per transaction.
with the infrastructure in place, solana needs to attract people to use it. and people follow people.
solana orbit: popular power
Technology that enables high performance and low costs is a crucial first step, but crypto is all about adoption. When I asked bill swo, a crypto veteran and investor at launch code capital, what he thought of solana, he told me: “solana is a prime candidate to become mainstream because of what it’s building and the names out there.” behind”. .” we’ve covered what you’re building; the names behind it are just as important as an ingredient. solana needed powerful believers to reach escape velocity.
In the early days of solana, while anatoly, the core team, and an army of validators and volunteers created, tested, and optimized the technology, anatoly also struggled to find partners to build on solana. He had a grand vision from the start: to rebuild the New York Stock Exchange, or NASDAQ, completely on-chain. “Not just transactions or order book matching,” McCann explained, “but everything. data, execution, literally everything.”
mccann put him in touch with exchanges. they didn’t buy it. decentralized exchanges (dexes, think uniswap), were low-performing and difficult to use. they worked if you wanted to trade crypto assets with each other, because there was no alternative, but they couldn’t even come close to handling traditional financial needs. nasdaq processes something like 500k transactions per second, including offers and requests that are made but not executed, most of which come from machines, not humans. the dexes couldn’t sniff out that performance at the time.
In July 2020, however, solana reached its first major turning point: cryptocurrency trading platform ftx announced that it was going to build its dex, serum, on top of solana.
The specific dex was less important than who was behind it. there are many dexes, but there is only one sam bankman-fried. sbf is something of a deity in cryptography. Mario Gabriele’s recent FTX trilogy on The General (Parts 1, 2 and 3) is worth the price of an annual subscription alone and covers the magnificent rise of SBF. In Serum’s decision, Solana chose not only a new project, but essentially landed Crypto Lebron as a spokesperson in the process.
sbf is a trader by training, having spent the early part of his career at quantum giant jane street. The teams he put together at both Alameda Research, his quantitative trading firm, and FTX, his centralized crypto exchange, were filled with people from finance: quantitative analysts, engineers, high-frequency traders. they cared less about the centralization/decentralization debate, and more about “can they do commits at scale?”
upon acquiring it, anatoly described the first meeting, back in 2019, before solana was live on mainnet:
we spoke briefly with ftx nine months before our release and said, hey, you guys are great. you are creating great products, you have a promising exchange. what if we did options or something interesting about solana? they’re like, ‘is it live? we don’t have enough time for this, we have to ship stuff tomorrow.’
once solana was live, however, anatoly returned to sbf. she brought a demo: break, “where you break the keys and you see the trades shoot up, then you see them all clear on the screen. you see them all confirmed and these are smart contract transactions, you can go see the code.”
I sent 0.2 soles to a broken account (you need soles because they are real transactions) and tried it myself. is wild
black squares represent transactions I made by breaking my space bar. when they turn green, they are confirmed. in 15 seconds i sent 80 real transactions through solana.
When I got to the results page, all 80 transactions had been processed in an average of 4.02 seconds. the page notes that I only used 0.011% of the capacity of solana, while the same load would have consumed a third of the capacity of ethereum and 15% more than the entire capacity of bitcoin.
sbf was impressed. he showed it to his engineering team, and they were too. Like few others in the world, the ftx team appreciated that, as anatoly put it, “if you can have a system that’s fast enough to do full-style central limit order books, there’s a chance that decentralized finance can potentially get 50% of world finance, maybe 25%.” they realized that solana had the potential to do so and decided to create a serum from it.
sbf’s decision was akin to a coronation, announcing to the world: “solana is the highest performing blockchain.” the day before the announcement, July 26, 2020, the sol was trading at 1.77. on August 30 it peaked at $4.78, an increase of 170% in one month.
More importantly, sbf’s blessing and involvement helped attract other developers. In November 2020, Solana hosted its first hackathon, with over 1,000 developer registrations and 60 projects built.
when i spoke to dylan and ian macalinao, co-founders of saber, the fastest growing defi project in solana, about why they chose solana, they said they first looked at solana around the time of the first hackathon because their other co-founders, “I was following sbf for a while and was using ftx at the time. From there, we saw that solana was a good chain for trading systems because the type of people using it at the time were merchants.”
no other blockchain worked for what they were trying to build, but at the time, solana’ was “going through growing pains”. documentation was poor and a boiler plate code still needed to be written”, so they decided to postpone construction of saber.
again, the sbf universe appeared. Earlier this year, Armani Ferrante, a developer at Alameda Research, released Anchor, an “open source framework for the Solana Sea Level runtime that provides several convenient tools for developers.” according to dylan and ian, anchor “reduced the code you need to write in solana by 90%”. solana uses the rust programming language, but anchor makes building apps for solana more like programming in solidity, the most popular language used on ethereum.
In February, solana held its second hackathon, the solana x serum defi hackathon, with triple the registrations (3,000) and nearly double the project submissions (100) of the first. in april the saber team revisited solana and decided to build there because the ecosystem, developer tools and support had taken off. In May, when Solana held its third hackathon, Solana Season, developer interest skyrocketed.
solana received more than 13,000 registrations and 350 product shipments, increases of 425% and 350%, respectively, in just three months. Speakers and judges at the event included a who’s who from across the crypto ecosystem, signifying a growing industry acceptance of solana as a true contender.
If sbf helped solana build some initial momentum, a16z helped solidify her legitimacy. In June, two days after the solana season ended, the company announced that a16z and polychain capital were leading a $314.159 million token sale. Launch Code Capital’s swo told me that even among a vc-skeptic crypto community, “a16z has credibility for being early and helping build the system,” saying that his involvement makes him more confident in solana’s staying power.
it seems counterintuitive to raise money from a vc when they already have a publicly traded token and a market cap of over $10bn, but raising money from a16z, polychain, alameda and other respected names in the space was essentially marketing, in the same way that traditional startups partially rise from the top vcs to help attract talent, partners, and clients.
“It’s as much about people as it is about technology,” said swo, “tokens are just a way to scale network effects.” once network effects start to kick in, a blockchain takes on a life of its own, with big names and superior technology attracting investors and developers attracting users and more developers, and so on.
sbf and a16z provided crucial votes of confidence and served as catalysts that have helped solana break out of a crowded pool, but the long-term success of the blockchain will rest on these two questions:
can they attract developers?
Can those developers attract users?
looks good. momentum is building.
the solana ecosystem
my first conversation about solana was in april with ben sparango, my childhood neighbor, who is now the strategy lead for solana labs. When I asked him what the strategy meant in solana, he said that his whole job was to build an ecosystem of developers who build on solana and make sure they have the tools and resources they need to be successful.
I’m proud. ben is doing a good job. The co-founders of Saber told me that one of the things that makes Solana unique is that they are the best at helping startups grow, offering services like:
smart contract audits. solana labs trains and helps external auditors to audit projects and make sure they are safe. projects on most other blockchains must pay for third-party audits.
solana program library. solana maintains something of an open source library with which companies can operate by building interfaces and businesses around it. they include staking pools, governance protocols, token programs, a naming service (like ethereum’s ens), and a token exchange program (on which saber was built).
solana capital. solana invests in protocol-based projects, and the solana labs team makes introductions to other investors and people who might be helpful.
anatoly, raj, and the team at solana labs are more directly involved in driving the ecosystem than the teams behind other blockchains (we don’t even know who satoshi is), which feels a bit less decentralized. but it’s hard to argue with the results.
This is what the solana ecosystem looked like in March, according to the inhabitants of solana.
at the time, there were 78 projects listed with three “coming soon”.
This is what the solana ecosystem looked like just four months later, in July:
solanians highlights 181 projects, 130% more than in March. Solana’s website lists even more: 302 projects spanning 19 categories.
This is still evolving. The table doesn’t even include the Degenerate Ape Academy, which launched in August. As I was writing this section, someone sent me an offer for a company building in Solana. mccann told me that he is inundated with emails from developers of all categories interested in building on solana. He feels like he’s ramping up, or as McCann put it, “We’ve finally hit a little escape velocity.”
The most surprising change for me since I started tracking solana has been the variety of use cases. while solana is best known for decentralized finance (defi), there has been a big rise in other categories, most notably apps and games/nfts. I think I’ve been underestimating its potential.
To understand what’s being built, let’s take a deep dive into three of the most promising projects.
case study: saber
after seeing the rapid maturity of the solana ecosystem, the macalinaos decided to build sable in solana in april. saber is a cross-chain exchange, which means it facilitates the transfer of assets between solana and other blockchains. when pairing assets with similar values, such as stablecoins or wrapped btc from different blockchains, know:
minimizes slippage for traders (how much price movement you will accept on your trade)
eliminates the transient loss for liquidity providers (which comes from changing the value of the asset you lock while locked)
since saber was based on solana’s existing token swap program, they launched on the mainnet in less than three months, on June 1st:
Saber already has $621 million in total value locked (tvl), the most widely used measure of activity in defi. which ranks third among all solana projects, including solana itself.
saber already ranks tvl #40 among all defi protocols on all blockchains, according to defillama. The vast majority of major defi projects are on ethereum, which has $115bn in total tvl compared to solana’s $2.46bn (not including solana holdings).
expect to see sable move up the ranks. As solana has become all the rage in recent weeks, sable has skyrocketed, growing 3x from $200m tvl to $600m in just one week :
In fact, the growth of solana is so positive to know that the team is actively helping launch new projects at solana. “In theory,” Dylan and Ian said, “you could buy any asset that exists in the world, trade it on solana, and collateralize it with the sable lp token.” the more activity grows in sunshine, the more valuable the saber becomes. aligned incentives are a beautiful thing.
case study: star atlas
A few weeks ago, I wrote about axie infinity, a play-to-win game that generates $10 million in revenue a day. axie is based on its own ronin sidechain, which interfaces with ethereum. play-to-win games have enormous potential because they allow people to own and transfer the fruits of their in-game labor and in-game assets, and potentially make a living playing a game.
solana has her own highly anticipated money-making game: star atlas. In a podcast conversation, Star Atlas founder and CEO Michael Wagner told Anatoly that Star Atlas will be a space-themed massively multiplayer online metaverse that is one of the first AAA gaming experiences on the blockchain. . he hopes to appeal to a mainstream audience, all of whom will need to have atlas tiles and/or solana-based cops to play.
In addition to the game, Star Atlas is creating financial incentives for players. “every asset in the game must be an nft,” wagner told anatoly. “everything from ships to crew, components, virtual terrain, and structures on those terrains.” that would mean players can use in-game tokens and also trade their assets on open exchanges for other cryptocurrencies or fiat currencies.
next friday, star atlas will start public token sales in ftx, raydium and appllo-x.
two tokens will go on sale:
atlas: In-game transactional currency needed for operating expenses, purchase of consumables and repair, refueling, or ship upgrades. atlas is what most people will earn for playing.
polis: government tokens used in dao star atlas and in-game. In the game, the polis will be used for strategic purposes and political domination, such as politically controlling certain regions of space and establishing taxes, fees, and rules. outside of the game, the polis will behave like a dao government token, with holders able to determine things like long-term inflation and which areas of space should be developed next.
The launch of the star atlas token in the short term will draw attention to the variety and quality of projects being built in solana and may increase the demand for staking tokens to buy atlases and cops. In the long term, Star Atlas wants to create its own metaverse, with a persistent environment and a functional in-game economy. an economy needs fast and cheap transactions to run smoothly.
Join the star atlas discord here to dive in and keep going.
case study: audio
🔊 currently listening to: netsky – brownies & lemonade in the (live set)
audius is like web3 soundcloud, with new tracks, remixes and live sets uploaded directly by artists. it has gained a particular foothold on edm, with many of the world’s top electronic artists using the platform. I’ve written about audius before, most recently on the internet:
audius, the web3 music streaming platform, is based on ethereum and solana. issues and manages the $audio token on ethereum, but runs upvotes and likes, things that need high speed and low cost to run, as well as a web2 counterpart, on solana, powered by the same engine used by some of the most sophisticated financial professionals in the world.
ever since that piece, audius has been in a tear. in July it exceeded 5 million monthly active users (MAUS), compared to 3 million in March. Just last week, Audius announced a partnership with TikTok that will allow its artists to upload their songs for use in TikTok videos and drive traffic back to Audius.
which caused the price of the $audio token to skyrocket, from $1.61 to a high of $3.80. its market capitalization is currently above $1b.
all this activity, from projects like audius and saber, to increased volume in dexes serum and raydium, to zeitgeist grabbers like degenerate ape academy and star atlas, has caused an increase in activity on solana, and solana is ready For that.
Since the launch of its mainnet in March 2020, there have been 24.9 billion transactions on solana.
for comparison, there have been 1.255 billion transactions in the entire history of ethereum since 2015, and 664.6 million transactions in the entire history of bitcoin since 2009. at the current rate, solana is doing almost all the transactions made in ethereum every week.
(note: solana includes consensus messages in this number, so even though these are transactions that require payment of fees, many would argue that the actual number of transactions is less than half the main number).
That solana has handled so many multiples of the transaction volume of bitcoin and ethereum in its much shorter life is a testament to the fact that the technology works. and the fact that it’s growing those numbers while only managing around 2,000 tps shows there’s a ton of capacity left to handle the growth. But as mentioned, Solana charges minuscule transaction fees. how is the value accumulated for solana?
how the value for solana is accumulated
How is a blockchain token valued?
btc, which acts as a store of value, is valued based on a combination of:
intersubjective belief: other people think this is worth so much
supply and demand: there will only be 21 million btc, so with more demand, the price goes up
minimum mining cost: it costs a certain and increasing amount of btc, so the price must be kept above that minimum to incentivize miners to validate blocks
gold price: some people compare btc to gold and use gold’s market capitalization as an indicator of where btc may go if it replaces gold as a store of value.
eth is more interesting because eth is triple point money. serves as:
store of value: eth is held as collateral for defi transactions. for example, you can place eth to secure a loan or provide liquidity to a dex.
Consumable Asset: With EIP 1559, gas rates act like gasoline in a car. every time something happens in ethereum, gas needs to be burned, which decreases the overall supply.
Capital Asset: Ether acts as a capital asset in several ways. Owning eth represents a part of the ethereum network, like owning shares in a company. once staked, eth grants its owner the right to work for the network by becoming a validator and the right to collect fees generated by the network.
the bullish argument for eth is that there is more activity on the ethereum blockchain, that with the successful implementation of eip-1559, eth is being burned on every transaction, and that if the eth2 merge is successful, value will accumulate to people who have and bet eth. more demand, less supply, higher price.
sol behaves similarly to eth, with a few key differences. it’s also triple dot money:
store of value: sol is locked up as collateral for defi transactions. for example, you can contribute sol to guarantee a loan or provide liquidity to a dex.
consumable asset: transaction fees, although very low, still make users consume sol. Every time someone does something in the sun, they get a little sunburn.
Capital Asset: sol acts as a capital asset in several ways. owning sol represents a part of the solana network, like owning shares in a company. once staked, sol grants its owner the right to work for the network by becoming a validator (or delegating their stake to a validator and sharing the rewards) and the right to collect fees generated by the network.
Unlike eth, whose value is largely derived from gas fees, thinking about how the sun accumulates value is a bit more complicated. there are two main ways sun becomes more valuable: stake and mev.
the betting point is both simple and complex 3d chess.
for an average user, betting is simple. if you own sol, you can stake them directly through a wallet like ghost to one of the validators. validators make money for securing the network, both through small transaction fees and, more importantly, through inflation. the protocol mints tokens (up to a limit of 504.2 million soles) as a reward to validators. the more participation they have, the more often they “lead” and the more they earn. to attract more engagement, validators offer returns to stakeholders; for example, I bet sol on chorus one in exchange for an 8% return.
the way betting makes sun more valuable is where this gets complex 3d chess. Ben Sparango explained it to me, and I’ll do my best to explain it to you.
there is an idea that with pos networks, the value created at the top of the chain must be less than the value staked on the network, or else it would be worth the Validators will attack the network to capture the value built on top. The more value at stake, in theory, the more secure the network, because validators have more incentive to act benevolently.
then everyone in the network is incentivized to make sure that the stake value is greater than the value of the applications created in solana. If you are building your business in Solana, the only thing that guarantees that your business stays safe is that the price of Sol is high. these companies can essentially pay for security by buying and gambling more soles. if the project has a dao with a treasury, like audius or as you plan to know and star atlas, the dao might say: “it looks like the value of the dao will exceed the value of our staked tokens, so we should commit 10% of our treasury to buy and stake more tokens.”
As more valuable projects are built on solana, the value of the sol wagered should increase accordingly. while this is theoretically true, there is a spectrum. most validators wouldn’t behave maliciously given the chance. however, the important thing is that this idea is true enough to provide a schelling dot (crypto people love schelling dots) for everyone in the sol ecosystem.
It’s simple: attract more developers who attract more users, and everyone agrees that the value bet should increase accordingly.
The other way soles holders and market participants can accumulate value is mev.
miner extractable value (mev) refers to the ability of miners to create value for themselves by setting the order of transactions within a block. the way a typical blockchain works is that users submit transactions, which go into a global “mempool” from which miners choose transactions to include in the next block and which miners can order as they choose within the block, often based on gas prices. Ethereum gas is divided into base fee + tip, and people who need their transactions verified first pay higher tips to move up the block.
miners can order blocks in a way that allows them to transact in advance or otherwise extract value, and third-party bots can also capture mev by playing around with their transaction fees. the end result for users can be higher transaction costs or increased slippage (the price goes up if a bot gets ahead of your trade).
If you have been paying attention until now, you will realize that there is less risk of mev in solana due to the proof of history. each transaction comes with its own timestamp, so validators can’t arbitrarily reorder them so easily.
But that doesn’t mean that mev won’t happen in solana, just that users might get compensated for it. anatoly described what could happen to me like this:
mev means that the validators have some information that they have calculated that if they take your request, they can make a profit. if the information you submit is useful enough to someone, they will actually pay you to take their order. it is pay per order flow (pfof) at the micro level, but in a fair and open market. makes the high frequency trading (hft) spread a commodity.
In other words, instead of having super-fast, expensive computers controlled by high-tech companies that capture small amounts of value by getting ahead of transactions, which happens in today’s market and costs regular merchants small amounts of money, people who send exchange, transactions can be compensated for their information by parties that can take advantage of it.
Because solana is proof of stake and because mev goes to validators, sol accumulates value based on mev. it’s the web3 playbook: cut out the middle man, let each side accumulate more value.
mev and staking are two of the more specific forms of solana in which value will accumulate for sol holders, but at the end of the day, real and sustainable value will be generated by the same things as any other product: supply and order.
as new projects are built in solana, more people need to buy more sol to use them. Since an increasing number of sol tokens will be staked and locked in defi protocols, there is less supply of sol tokens for that growing demand. more demand for fewer tokens means a higher price. That is the basis of the Solana bull case.
the case of the bull for solana
solana’s advantage is that it will make web3 bigger and faster than anticipated, as more developers build on solana and bring more users to the web. faster, cheaper and smoother transactions will attract the next billion users to cryptocurrencies, and many will come through solana. they will have to buy sole and sole-based tokens to participate.
Before researching this article, I thought the optimistic case was that solana would own an increasing amount of the execution layer for a massively growing defi pie. that’s a great opportunity in its own right. the financial services sector comprises 20-25% of the global economy, and cryptocurrencies are still too early to steal share.
Until solana, there was no blockchain that could handle even close to the transaction volumes required by traditional financial markets. bill swo believes that, “something like solana opens up the potential for connection to real life assets, real life products and real value creation.” he believes that in the next 4 year cycle, we will put everything back on the blockchain, but this time with much better technology like solana that makes it feasible. “Low tps was a limiting factor for institutional adoption,” he said, “but 50,000 tps or more is attractive to institutions that can benefit from decentralization at the speed of a centralized provider.” ”
In fact, gaining a share of traditional finance is one of anatoly’s goals. he told me, “we should be competitive with the nyse. I have no idea if it is half of global finance or 5%, but now it is possible on a global scale and it is worth doing”. What would that look like?
On the one hand, there are web3 applications with many users. on the other, there are risk computers that synthesize information, calculate risk, price and position. between the two sides, there is no one in the middle, everything is visible, more robust, fairer, cheaper.
Serving as the execution layer for even 5% of global financial markets is an unimaginably large opportunity for Solana and the developers who build applications on top of it to make that future a reality.
but over the months since i started following solana and the weeks since i started researching this article, an even bigger opportunity has arisen. solana will be able to eat a wider range of web3 activity across all categories than I initially realized, and in doing so will expand the reach of web3 even faster than I initially expected.
There’s something magical about transactions that are confirmed instantly, at almost no cost, whether it’s a trade, an nft purchase, or even a “forward” on audius. new decentralized economies and, dare I say it, the *metaverse* will need fast and cheap transactions. imagine buying lunch and waiting a minute for your credit card transaction to clear, then paying $15 in fees. we will not accept that experience in the metaverse.
By enabling decentralized applications to run at centralized speed with minimal fees, solana makes it even more difficult for developers across all verticals to consider building anything other than decentralized products. serum, saber, audius, star atlas and the hundreds of other projects will be case studies attracting more developers, not necessarily from ethereum, but from traditional startups. The more offsets Solana removes, the easier it is for developers to choose Solana.
if that happens, the sol will benefit from the huge demand from projects and users who need to buy and participate in the sol, and from the need for the value of the participation sol to exceed the value created on top of the net.
While there is a mega-bull case where eth2 lags long enough to frustrate ethereum devs enough for everyone to jump to solana, you don’t need to believe that to be true to be bullish on solana. I personally think we will end up in a world with high cross-chain interoperability. we may see more projects, like audius, that are based on both solana and ethereum, using solana for more frequently executed transactions and ethereum as a settlement layer. In a cross-chain world, where people can build on solana and settle on ethereum, both chains gain from higher activity overall.
In any case, it feels like, particularly in the last couple of weeks, solana has reached a tipping point. she has gained enough momentum, first from her technology, then from the involvement of the likes of sbf and a16z, and recently from increased developer activity, that she will continue to be a key player in the space for years to come. If upcoming projects like Star Atlas deliver on their promise and highlight the diversity of Solana’s strength, the sun is the limit.
the case of the bear for solana
or… it will all come crashing down. solana is building momentum, and if she uses that momentum to create ever stronger network effects, she will be unstoppable. but if we enter a crypto bear market, that momentum could be stopped in its tracks and the bet you have built up could be wiped out.
In a bull market, people are willing to experiment with new and even broken things. the degenerate ape pitch was fun even when it flopped because people knew they would make money from the other side.
In a bear market, they might retreat to the things that work best and the most mature ecosystem. Ethereum is slower and more expensive, for now, sure, but it has a much more mature ecosystem, a more accessible coding language (robustness), and infrastructure and development tools that just work better. and it has such strong network effects that it will survive even the harshest recession.
A bear market can also scare traditional financial institutions, the ones most in need of solana’s particular set of skills.
If crypto markets crumble and liquidity dries up, financial institutions can use the opportunity to remind people of the benefits of centralized and controlled institutions. To the extent that they incorporate “blockchain technology”, it may seem like a consultant fever dream, like jpmblock.
artists and creators can hang on, but most of them are on ethereum anyway. Crypto winter’s rebuild could take place on the more familiar ethereum, giving it a less chaotic transition to eth2. by the time cryptocurrencies recover, eth2 may be fast enough, cheap enough, and scalable enough, with the benefits of familiarity, that development on other chains stops.
Even without a new crypto winter, solana is playing from the back, with a smaller user pool than ethereum and bitcoin in an industry that prizes network effects above all else. if it doesn’t get enough momentum before the eth2 merger, and if eth2 makes transactions as fast and cheap as promised, builders can opt to do everything (execution and settlement, nfts, gaming, defi and daos) in ethereum, where there are are more users, more builders and more money.
solana’s success in head-to-head battles is based on a few assumptions:
the execution layer is more valuable than the settlement layer.
can “borrow” pow security from eth or btc
fragmentation breaks definition
But what if those assumptions don’t turn out to be true?
while value flows to the execution layer in tradfi (amex, visa and nasdaq are more valuable than their respective settlement companies), that may not be the case in blockchain where there may be courage to run and settle in the same place. With visa, I don’t need to think about settling, I just swipe my card and it works. if i have to sell my ethereum based assets and move usdc to solana to run there maybe not worth it.
maybe the execution layer plays the game and the polygon can’t just borrow the security of pow blockchains at scale, and people are happy to pay higher transaction fees for more security.
Although, in theory, sharding makes defi composition more difficult (each shard can have a different price for an asset), software can solve that challenge, just as anatoly solved a seemingly impossible parallelization challenge with poh
if sharding is the answer, solana will face competition on its core strengths (speed, performance, and cost) not only from ethereum, but also from a wave of l1 and layer 2 solutions like polygon. maybe the solution is something completely different, like a zk-based protocol.
Also, solana is a bit more susceptible to state activity, because validators require a lot more bandwidth to run than a pow system.
Lastly and most importantly, the solana ecosystem has a long way to go to make the developer experience as good as it is on ethereum. there needs to be more open source front-end libraries; A look at the applications of many solana projects would suggest that it’s not that easy to create great user experiences in solana. In addition, more and better infrastructure needs to be built. Most of Solana’s big releases, such as Degenerate Ape Academy and Saber, experienced problems.
if the key question is, “can they attract developers?” So the biggest existential risk for solana is not being able to attract enough developers to take advantage of its powerful blockchain. one developer i spoke to said that most of his smarter friends are still developing on ethereum. Given the composable and exponential nature of cryptocurrencies, every new tool, dao structure, and protocol built on top of ethereum means more reasons for upcoming developers to build on top of ethereum. Each new project adds to an open source smart contract library and lengthens ethereum’s lead.
in the bear case, whether due to market conditions, eth2, or its own shortcomings, solana can’t attract enough developers, who in turn can’t attract enough users, to deliver on its promise, and ethereum runs away . with the whole damn thing.
As I mentioned above, I’m a maximalist minimalist. I don’t think ethereum will run away with all web3, and I don’t think solana will kill ethereum. I think the two will work together to bring more activity and value to the decentralized web.
In June, neon labs took a step towards that cross-chain future, a compatibility bridge between ethereum and solana. neon will allow anyone to run ethereum smart contracts on solana, which means it’s easier for developers to create programs that work on both blockchains. In the announcement article, Marina Gureyeva from Neon Labs said:
ethereum is a thriving blockchain ecosystem that has a lot to offer dapp developers and users in terms of tools and infrastructure. At the same time, Solana is attractive to many due to its technical characteristics and is perceived as an emerging market.
That’s my kind of language! both chains are good at certain things, and the easier it is for developers to reach more users with better experiences, the faster web3 will grow.
I am increasingly convinced that solana will be a great driver of that growth.
when i first spoke with austin federa at solana labs about writing this article, there was already a heartbreaking cry that was popular among solana fans on twitter: summer of solana. #solanasummer even has its own hashtag with a solana logo appearing (try it when you tweet this piece). they all had snakes in their profile pictures. there was clearly a passionate community, but at the time, it felt like the tribal call of a small passionate group of people trying to make a name for themselves. it was almost cute.
Just a few weeks later, Solana’s summer seems like an eerily prophetic prediction. solana has emerged from a sea of post eth-killers as the most legitimate contender to be placed in the blockchain pantheon alongside bitcoin and ethereum. is focused. works. the team just sends. and developers are taking notice.
as we speak, solana is in the midst of her latest community-driven hackathon: build aloud. this one focuses entirely on india.
For a product that’s all about bringing the next billion people to open global markets, seeing over 3,000 developer apps from the world’s second most populous country speaks to the huge potential ahead.
solana herself has just announced her next hackathon: power up.
crypto is all about momentum. tokens are almost like veblen goods: the more expensive they are, the more people want to buy them. the more developers build on a blockchain, the more developers will want to build on that chain. the more great apps they build, the more users will come.
and right now, solana has momentum. I don’t know how that will be reflected in the price, but I do know that more and more smart people I know in crypto are getting excited about this, and new and interesting projects are being announced every day. and I know that once people use it and feel the magic of high speeds and low costs, they will add it to their rotation.
Personally, I will add to my solana post and look for new companies in the solana ecosystem. The fact that the sun is worth <10% eth, <5% btc, and inexplicably <30% cardano seems like an attractive risk/reward ratio.
As always, my recommendation is not to buy the asset (I’m not a licensed financial professional!), but to get involved in the ecosystem. join the discord check out the star atlas release. try to break solana. Find any of the 302 projects in the solana ecosystem that seem interesting and dig deeper. it’s early, and in crypto, there’s alpha to getting involved early.
There are only a couple of weeks left in the solana summer, but don’t worry. Solana is going to make it. sigmi.
what did you think that this week was not boring? your feedback helps me make this great.
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Thanks for reading and see you on Monday!