Written by: flowie, ChainCatcher

Compared to the embarrassment of being caught in the FTX crisis last year, Solana can be said to be proud of itself at this year's Breakpoint. Dan Albert, executive director of the Solana Foundation, finally announced the launch of the Firedancer test network that solved the downtime problem, and received praise from a number of technology leaders including Paradigm CTO Georgios Konstantopoulos and Global Macro Investor founder Raoul Pal. What's even more exciting is that during the conference (October 30 to November 3) SolanaTokenThe price reached a high of $45, setting a record high in 14 months, and its increase in the past month exceeded 80%. TokenThe price has fallen back to $39.6.

Although many crypto users joked about Solana's manipulation behavior of pulling up the price every time there is a Breakpoint in response to this surge, Arthur, the founder of DeFiance Capital, even joked, "If opening a Breakpoint is so effective for Sol's rise, Solana can open it every week." But despite this, we cannot deny that Solana's recovery is inseparable from this year's hard "post-disaster" reconstruction.

At almost the same time last year, not long after the Breakpoint conference ended, ChainCatcher also published an article titled "How does Solana cope with internal and external troubles after being trapped in the FTX dilemma?" to record Solana before and after Breakpoint. At that time, Solana was devastated. In the crypto winter, it continued to downtime, ecological projects suffered unprecedented large-scale attacks, and was strongly pursued by new public chains Aptos and Sui. With many problems unresolved, Solana was implicated in the collapse of FTX, and the token price once fell below $8, hovering on the line of life and death.

Now that Solana has returned after PlayerUnknown's Battlegrounds, many indicators are showing an upward trend, and the technical foundation and ecological construction are also recovering and even breaking through. As Messari's third quarter Solana ecological report concluded, "The development momentum is stronger than when the bear market just began." Perhaps more people are willing to believe that Solana, the "Ethereum killer", is writing a story of "what can't be killed makes me stronger" as it is about to go through two rounds of bull and bear cycles.

Solana fundamentals from the data

Although the surge in Solana's tokens is inevitably due to institutional investors pulling up the price, Solana's key indicators have indeed rebounded and climbed. According to Defilama, Solana's TVL reached $460 million, more than double the $210 million at the beginning of the year, and currently ranks eighth in the public chain track.

What is more convincing than TVL is its DeFi Velocity (TVL utilization) data. DeFi Velocity evaluates the activity and adoption of the chain by the transaction volume (DeFi Velocity) per US dollar of TVL. According to the latest data from Nansen, Solana's DeFi Velocity ratio for 7 days (September 26-October 2) was 0.71, indicating that for every US$1 of liquidity per week, the transaction volume was close to US$0.71. This is higher than a number of public chains such as Arbitrum, BSC, Base, Optimism and Ethereum.

Judging from the number of daily active addresses and daily transactions, the active transactions on Solana have not declined as severely as expected since the FTX crash. Although the daily active addresses were briefly silent for two months at the beginning of the year, they peaked around May and June, exceeding 500,000. The daily transaction volume also peaked in May and June, exceeding 25 million transactions. The overall transaction volume is also ahead of Ethereum, Polygon and Aptos. At that time, the Bitcoin ecological protocol and meme coins were popular, so the Bitcoin and Ethereum networks were congested and transaction fees surged, causing a large number of developers and users to choose Solana, which has lower fees, to trade.

In terms of developer activity, the collapse of FTX last year did not actually cause a large-scale exodus of Solana developers. In November last year, X platform users targeted developers.CommunityA survey was conducted, of which about 73% developers saw no need to leave Solana, and about 67% developers chose to deploy only on Solana.

According to data from Solana's official website, its monthly active developers have exceeded 2,000, which is a significant increase compared to the 1,234 monthly active developers in Solana's second quarter report (as of April), and has gradually returned to the peak in March this year. According to Electric Capital's developer report data, after the FTX crash, Solana's development activity increased significantly in March, with monthly active developers reaching 2,732, but has declined since March, mainly because part-time developers have changed a lot, while the number of full-time developers has not decreased much.

Overall, the trauma that FTX brought to Solana did not destroy the solid fundamentals laid by Solana in the previous cycle.

Many shoes have landed, and the technology has not lost its eye-catching breakthroughs

Important breakthrough measures such as the outage solution and EVM compatibility solution, which have been talked about for a long time, have gradually been implemented this year.

First, the Firedancer testnet, which was the most popular on Breakpoint, was launched. Firedancer is a new generation of node verification client launched by Jump Crypto for the Solana public chain. As the second client of Solana, it will reduce the single point risk caused by a single client, improve the diversity of node clients and Solana BlockchainStability, expected to increase Solana’s throughput by 10-100 times.

Firdeancer is Solana's most anticipated infrastructure upgrade in the next few years. In a recent interview, Solana co-founder Anatoly Yakovenko called it a long-term solution to Solana's outages, and its importance is self-evident. Since its launch in 2020, Solana has experienced at least five major outages, three of which occurred in 2022. Solana's great instability has caused ecological projects to suffer large-scale attacks and flee to new public chains such as Aptos and Sui.

Currently, the mainnet of Firedancer is expected to be launched in 2024. However, it is worth noting that Delphi Digital analysts believe that the launch of the Breakpoint conference is actually only the network component of Firedancer, Frankendancer. There are still great challenges before the full version of Firedancer is launched, and it may take until 2025 to achieve it.

Regarding downtime, through network upgrades including QUIC, Stake weighted QoS, and localized charging markets, Solana's network stability this year is much better than in 2022. Solana's second quarter report stated that a network outage occurred on February 25 (during the last software upgrade), and after the improvement, the network has not had such problems again.

Secondly, in addition to solving the downtime problem, solutions to connect the EVM ecosystem are also being implemented. In July this year, Solana EVM compatible solution Neon was finally launched on the mainnet, followed by Solidity’s smartcontractA compiler, Solang, was also launched to make it easier for developers to write Ethereum applications on top of Solana.

In addition, during last year’s Breakpoint, Solana announced that its new anchor GameFi has also made some progress. During this year’s Breakpoint, Solana also announced GameShiXiaobai NavigationThe ft game development tool has been released in beta to reduce the difficulty and complexity of developing games on the Solana chain.

In addition, Solana's Web3 mobile phone Saga was also publicly sold in May this year. Although there were no impressive sales results, this was also Solana's preemptive layout in the mobile entrance.

After solving long-standing problems such as downtime, Solana also made some impressive breakthroughs in technology. In April of this year, Solana announced the launch of state compression. State compression is a new way to store data that can reduce the cost of NFT casting by more than 2,000 times. According to statistics in the Nansen report, through state compression technology, the cost of casting 1M NFT has been reduced from US$25,300 to US$113. In comparison, the costs on Ethereum and Polygon were US$33.6 million and US$32,800, respectively. Helium benefited from state compression technology during the migration of Solana in April this year. During the migration process, nearly 1 million hotspots on the Helium network were cast as NFTs. Without compression technology, it would cost more than US$200,000, but after use, it was nearly US$110.

Ecosystems remain resilient

In addition to its technological advantages, Solana has also been known for its ecological construction. After the crypto winter and the collapse of FTX, the Solana ecosystem was briefly quiet, but this year, with the technological upgrade, the Solana ecosystem unexpectedly welcomed Web2 giants such as Visa and Shopify.

Around September, payment giant Visa announced that it would expand the USDC stablecoin settlement function to Solana Blockchain. E-commerce giant Shopify also announced its integration with Solana Pay, allowing its platform users to pay with USDC. Visa also elaborated on the reasons for choosing Solana in the report, the key being that "Solana's unique technical advantages include high throughput of parallel processing, low cost of localized fee markets, and high elasticity of a large number of nodes and multi-node clients." The addition of Visa and Shopify has given Solana's use cases in the payment field a good start.

In addition to the support of Web2 giants, Web3's top players or star projects are also supporting Solana. In particular, Rune, the founder of MakerDao, did not hesitate to offend Vitalik and publicly stated that after comparing many public chains, he believed that Solana was the most suitable new chain to be used as NewChain. L2 Blockchain Eclipse’s solution also embeds Solana’s SVM (Solana Virtual Machine), and claims that the network effect of SVM is also growing.

With the support of the top players, Solana is also actively working on ecological incentives. Throughout the third quarter, Solana not only held the Solana Hyperdrive hackathon with a million-dollar prize pool, but also participated in multiple hackathon events such as OPOS hackathon, Hacker Houses, PlayGG, etc. through sponsorship. Recently, Solana also launched an incubator aimed at attracting startup founders to choose Solana.

In the Solana ecosystem this year, the old DeFi protocols such as Marinade Finance, Lido, and Solend have not only achieved impressive growth, but also some dark horses such as Jito, marginfi, Ocra, Tensor, and Backpack have emerged, and most of them appear in the liquidity pledge sector. According to DeFilama data, the top protocols of SolanaTVL have generally risen in the past month, and three protocols have achieved growth of more than 100%, with the highest exceeding 255%.

Among them, Jito, a liquidity staking protocol that was launched on the mainnet shortly after the collapse of FTX, has seen its TVL climb from $4 million to nearly $200 million in one year, becoming the second-ranked protocol in the Solana ecosystem after Marinade Finance. Jito is characterized by providing additional MEV rewards to stakers in addition to staking income. According to Solana’s latest release, more than 31% of Solana validators are running through the Jito Labs client. In addition, the TVL of the DeFi margin protocol MarginFi increased by more than 700% month-on-month throughout the third quarter, leading the development of the points reward mechanism on Solana DeFi, a perpetualcontractThe trading platform Cypher and the Solana ecosystem lending protocol Solend subsequently launched a points reward mechanism.

Recently, Solana's Web3 integrated application Backpack has also been active and worth paying attention to. Backpack was the first to innovate Web3.0 walletHow it is built.walletThe difference is that it allows developers to build permissionless asset management tools on a single interface through the revolutionary new standard xNFT, and implement new core functions through request interfaces to promote more mobile customers to obtain a more friendly user experience.

Recently, Backpack also launched the NFT project Mad Lads, which is currently the NFT project with the highest market value on Solana, and its 24-hour sales volume has exceeded the top 5 in the NFT series. Backpack also announced that it will launch a regulatedcryptocurrencyexchange Backpack Exchange. Backpack Exchange has obtained a Virtual Asset Service Provider (VASP) license for trading services issued by the Dubai Virtual Asset Regulatory Authority (VARA), and will launch a beta version to existing Backpack and Mad Lads community members in November this year.

Behind Solana’s “good popularity”

To be specific, Solana has no shortage of big fans who support them in difficult times. Since the collapse of FTX, industry OKL represented by Vitalik, MakeDao founder Rune, Bankless founder and Placeholder VC partner Chris Burniske, including Web2 asset management giant VanEck and payment giant Visa have all supported Solana.

If you look closely at the reasons given by each supporter, most of them point directly to Solana's technical strength and community vitality, and they are more optimistic about Solana after the collapse of FTX. Not long after FTX collapsed, Vitalik Buterin tweeted that he hoped the Solana community would have a fair chance to thrive. Because a smart person told him: Solana is a serious and smart development community, and now those terrible, opportunistic people have been washed away.

Chris Burniske, a partner of Placeholder VC, also wrote an article to explain the specific reasons for his support, such as the fact that the Solana community has die-hard and hard-core developers, and compared with Ethereum and Cosmos, Solana's on-chain innovation is more independent. And "in terms of the ecosystem, the Dapp builders on Solana are more like a hybrid of Web2 and Web3, with a very encrypted operating mode on the back end and the ability to communicate with the mainstream on the front end." The reason why Rune, the founder of MakeDao, favored Solana was that "Solana's code quality is high and the ecosystem remains resilient after the collapse of FTX."

VanEck directly expressed his optimism for Solana in a long report, comparing Solana and Ethereum in terms of ecosystem applications, cost and revenue. VanEck believes that “Solana’s community has a strong sense of identity, which makes it resilient in the face of huge setbacks, even though these setbacks may destroy many otherBlockchainEcosystem.

After experiencing ups and downs, Solana may be telling us that in the cruel elimination round of Web3, continuous innovation and staying resilient in the face of major setbacks will only make you stronger.

The article comes from the Internet:Solana's post-disaster reconstruction in the past year: What doesn't kill me makes me stronger

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