Author: Xinwei, Ian Wu, MT Capital

TL;DR

• The Solana ecosystem is on the eve of a full-scale outbreak. After experiencing challenges such as the bankruptcy of FTX, it still maintains strong growth. TVL has increased significantly, and DeFi Velocity has shown a very high liquidity utilization rate. Daily trading volume has steadily increased, far exceeding other public chains.

• The Solana Foundation has been active: network stability and decentralization have been steadily advancing, Hyperdrive hackathons have been held to support ecological projects, and the layout of the Asia-Pacific market has been focused.

• Ecosystem highlights: Visa launches USDC settlement function on Solana, MakerDAOConsidering incorporating Solana SVM into its system, as well as Solana Pay integration with Shopify.

• Ecosystem projects are flourishing: the largest Solana airdrop season in history is about to begin. DeFi, LSD, Meme, Inscription, NFT, and DePIN all have star projects that have attracted market attention.

introduction

After Ethereum transitioned from POW to POS, the issue of centralization was brought to the fore. Competition between Layer2 became increasingly fierce, further fragmenting liquidity, and the application level was also lackluster.

In terms of Bitcoin ecology, BRC20 has led a number of different inscription protocols and triggeredCommunityFOMO, online on ORDIBinanceAfter that, it reached a climax, and then began to slowly decline along with the criticism that “there is no application, only meme”.

After the FTX bankruptcy incident, Solana ecosystemTokenThe price plummeted to as low as $8, a drop of more than 95%. However, after the heavy blow, the Solana ecosystem andCommunityIn the past two years, it has maintained healthy development. There are more than one million ecological users and more than 2,000 developers. From DeFi to NFT, new projects continue to emerge. Solana's second node validator Firedancer developed by Jump Crypto has also officially launched the test network.

As the price of BTC recovers, SOL willTokenThe price has soared by more than 200%. The current premium of Grayscale Solana Trust is about 800%. The performance of GSOL shows that institutional investors are optimistic about Solana.

The out-of-circle effect caused by Stepn in the last bull market is still vivid in our minds. As the negative news comes to fruition, the next hit application in the Solana ecosystem will surely detonate the market.

1. Overview

Solana’s total value locked (TVL) has shown significant growth since the beginning of 2023, now reaching $650M, an increase of more than 200%.

Ian Wu said: “With the recent launch of new assets on the platform, the SOL token plays a core role in it. SOL is not only a staking coin in the entire ecosystem, but also a margin and underlying asset in transactions. It is the key underlying asset (native) of the entire platform. crypto).

In addition, as SOL is used to purchase NFTs and other assets to participate in on-chain activities, interactions and lock-ups, a large amount of SOL is locked in the market, reducing its circulation. This SOL lock-up effect is expected to promote its price increase, forming a positive growth spiral. As new assets in the Solana ecosystem are issued and listed, the amount of SOL tokens locked will gradually increase. This will not only dilute the previously raised profit-taking and selling pressure, but also stimulate more holders to stake (Staking) SOL tokens due to the positive impact of new assets. Therefore, in the future, Solana's total locked value (TVL) market value will become an important indicator that analysts and investors will pay close attention to for SOL pricing. "

https://defillama.com/chain/Solana

DeFi Velocity (TVL Utilization):

• DeFi Velocity, or transaction volume/TVL, is a measure ofBlockchainKey indicators of activity and adoption are more valuable than just observing TVL.

• In the most recent week, Solana's 7d DeFi Velocity ratio reached 3.17. This means that every $1 of liquidity is able to generate about $3.17 of weekly trading volume. Compared with other chains such as Arbitrum, Binance, Base, Optimism, and Ethereum, Solana has shown the highest TVL utilization in the past 7 days.

Daily Trading Volume:

• Since 2023, Solana's daily transaction volume has shown a stable trend, especially the number of voting transactions has increased.

• Transactions are mainly divided into two types: voting and non-voting. Voting transactions mainly involve the voting accounts of validators.

Comparison with the half-year average daily transaction volume of other ecosystems

Despite challenges such as network outages and the FTX/Alameda debacle, Solana has remained operational, demonstrating its ability to improve and adapt.

Solana’s growing TVL, strong DeFi development, and stable transaction data together demonstrate its potential to become a vibrant hub of economic activity.

Ecosystem Highlights:

• In September 2023, Visa chose to launch the USDC settlement function on Solana, which is beneficial to the publicBlockchainIt is of great significance for payment architecture and other application scenarios between financial entities.

• In September of the same year, MakerDAOThe founders are considering incorporating Solana SVM into Maker’s new native chain as part of its “Endgame” upgrade plan, which is expected to take 2 to 3 years and be implemented in five phases.

• In August 2023, Solana Pay was integrated with Shopify.

foundation

Personnel changes

On April 19, 2022, the Solana Foundation announced leadership changes to its five-seat Council. First, Anatoly Yakovenko, co-founder of Solana Labs, stepped down from the position of Chairman of the Solana Foundation Council to focus on launching new applications on Solana Labs, effective December 2021. Second, to ensure the continuation of high-quality leadership and usher in the next chapter of the Solana Foundation, the Foundation appointed Leopold Schabel to the Council. Schabel is the leader of Jump Crypto and the co-founder of Certus One, a provider of verification services for the Solana ecosystem and other proof-of-stake networks.BlockchainConsulting firm.

New financial strategies

The Solana Foundation has announced a new funding strategy that includes convertible grants and investments. These flexible funding options are designed to meet the needs of diverse projects within the Solana ecosystem, from early development to mature businesses seeking financial support. The Foundation's convertible grant program provides financial assistance to early-stage projects with a focus on development, research, and innovation. These grants will be distributed to projects that have the potential to have a significant impact on the Solana ecosystem. For projects or startups that are already established and show a path to success, the Solana Foundation provides investment support, which will be used to expand their operations and bring innovations to market.

Retrospective Public Goods Funding (RPGF) Program

The Solana Foundation and OpenBlock Labs have innovatively introduced a retroactive funding model to support public goods and open source projects within the Solana ecosystem. RPGF aims to provide sustainable income to the creators behind public goods resources that are widely used by the community. Unlike traditional forward-looking grants, RPGF incentivizes and rewards past contributions that are beneficial to the broader ecosystem. The first round of RPGF received an enthusiastic response, attracting over 100 project applications, of which approximately 36 were funded. This process not only rewards past contributions, but also sets a precedent for community-led support for public goods.

Hackathon

Solana基金会最近成功举办了第八届黑客松活动“Solana Hyperdrive”，这是一个专注于吸引高影响力项目进入Solana生态系统的在线比赛。这次活动汇集了来自世界各地的创始人和开发者，共有超过7,000名参与者提交了907个项目，创下了Solana黑客松史上最大规模。活动覆盖了基础设施、移动消费应用、支付、去中心化自治组织（DAOs）、人工智能等多个领域，得到了AWS、Ironforge、UXD、Magic Eden等多家知名公司的支持。Solana基金会的执行董事Dan Albert表示，这些活动中产生的近1000个团队将在人工智能、金融与支付、物理基础设施网络、游戏与娱乐、移动消费者应用、加密基础设施、DAO与网络国家等多个领域中发挥重要作用，塑造未来的发展趋势。

Future plans

On the technical level, the Solana Foundation is focusing on several key technological innovations, which are expected to show results by the end of this year or early next year.

1. FireDancer is launched on the mainnet:FireDancer是一个独立的Solana验证器，旨在增强网络的稳健性和性能，这是一个能够在内部测试时达到100万TPS的系统，虽然实际运行时可能达到10万TPS，但这已足以满足高频交易应用的需求。其目的是维护一个独立的技术栈，从而多样化Blockchain网络的供应链并减少对单一故障点的暴露。FireDancer采用深度防御策略，将其组件隔离为独立的进程，并实施严格的通信协议，以减少潜在漏洞的影响。开发团队还将强大的Safetyprogram into its development lifecycle, bySafetyContinuous collaboration between the engineering team and the use of fuzz testing and code review to identify and mitigateSafety漏洞。其目标是在Solana主网上启动FireDancer，并升级Safety措施，例如外部审计和引入错误赏金计划。

2. Asynchronous execution/no bank leader:In Solana’s bankless leader model, leaders do the minimum amount of work necessary to produce valid blocks. This design reduces the memory operations required by leaders by a factor of three before a bank can execute. Leader responsibilities include verifying signatures in transactions, ensuring that fee accounts have sufficient balances, and managing balance caches.

3. Quorum Subcommittee:Solana的法定人数结构对其Safety性和性能至关重要。该网络使用二次消息开销以确保经典的拜占庭容错共识。Solana的设计允许网络维持高吞吐量和低费用，同时确保高水平的安全性。法定人数的大小和投票的实施方式是Solana设计的关键，确保了安全性和性能。

4. Dynamic storage pricing and old state compression:Solana introduces a state compression solution that significantly reduces the cost of on-chain storage. This technology relies on Merkle trees, which can compress the verifiability of data trees into a hash. This compression-friendly structure allows developers to store small amounts of data on-chain and update them directly in the Solana ledger, significantly reducing data storage costs while maintaining the security and decentralization of Solana's base layer.

5. Dynamic basic fee:In Solana, the calculation of transaction fees does not currently depend on the resources consumed by the transaction. Instead, the fee is determined by the number of signatures that need to be verified. Fee rates (e.g. lamports per signature) may change from block to block. However, transaction fees can still be deterministically calculated when a transaction is created and before it is signed.

Center of Gravity

Currently, the Solana Foundation is focused on strengthening and expanding its influence in the Asia-Pacific region. Especially after the FTX incident last year, the Foundation decided to increase its investment in the Chinese-speaking region and the Asia-Pacific market. The Foundation recognizes that the Asia-Pacific market is important in both the labor market (developer market) and the capital market, so it is committed to establishing a more balanced and comprehensive development in the region.

The Solana Breakpoint event is scheduled to take place in Singapore from September 19 to 21, 2024. The choice of Singapore as the venue for the 2024 Breakpoint event highlights the importance of the Asia-Pacific region in Solana’s strategy.

In addition, the Foundation is also expanding its influence in India and Europe (especially Germany and the United Kingdom).

2. Recent Hot Projects

Mad Lads & Backpack

Mad Lads is an NFT project created by Coral, the developer of the Solana framework, and launched by Armani Ferrante and Tristan Yver. This project marks a major innovation for Coral in the field of blockchain technology and NFTs. At the time of its initial release, Mad Lads was exclusively created through Coral’s all-powerfulwalletThis choice not only shows Coral's confidence in its own products, but also highlights Backpack's advanced technology and market potential.

The biggest feature of Backpack is that it is built around "executable NFTs" (xNFTs). These xNFTs are essentially non-fungible tokens embedded with executable programming scripts. They are actually operational Web3 application platforms. This technological innovation makes Mad Lads not just a digital collection, but a platform that can run code and achieve more complex interactions, which greatly enhances the functionality and appeal of NFTs. The xNFT series opens up a whole new way for program distribution. Game developers can cast entire games as limited edition xNFTs. A DeFi protocol can be based onwallet地址分发对新前端的早期访问权限。一个双因素验证码可以生成为NFT，并自动循环更新。正如Solana的网站所解释的那样，这些是xNFT用户可利用的可能性，它还补充说艺术家可以创mad造美丽沉浸式的3D体验，这些体验无法被复制并且可以直接在钱包中运行。这些可能性几乎是无限的。

Mad Lads' success is due to several key factors. First, its innovative xNFT concept has brought new vitality to the NFT market. This new type of NFT is not only a digital asset, but also has the ability to execute built-in code, providing users with more interactivity and practicality. Secondly, Mad Lads' performance in the market is very eye-catching. Sales exceeded $8.16 million in 24 hours, surpassing Bored Ape Yacht Club in the same period. This remarkable sales achievement is largely due to its uniqueness and high expectations in the market. In addition, Mad Lads' floor price rose by 200% in two weeks to 160 SOL, making it one of the most valuable in the Solana NFT series and highly recognized by the market.

In terms of technology and market strategy, the Backpack development team also demonstrated its ingenuity and ability to cope with challenges. During the re-issuance of Mad Lads, in order to prevent robots from manipulating the market, the team created two minting portals to effectively distinguish between real users and robots. This strategy not only effectively prevented malicious behavior, but also attracted widespread attention and discussion among legitimate users, enhancing the community's interest and participation in the project.

After Solana lost its well-known NFT projects DeGods and y00ts, a void appeared in the community. These projects moved to Ethereum and Polygon respectively, leaving a huge gap in the Solana community. The launch time of Mad Lads is closely linked to the time when these projects left Solana, providing good timing for Mad Lads' success. We think Mad Lads can become BAYC on Solana.

Nevertheless, with the collapse of FTX, the entire Solana ecosystem has also encountered serious challenges, and the Backpack team's funds are partially trapped in FTX. In this predicament, the Backpack team has not only successfully maintained operations, but also began to look for new development directions. Mad Lads' success is seen as the rebirth of the Solana community, which is undoing the damage caused by the FTX association and the narrative that comes with it. Backpack is currently in public testing, and the long-term goal is to open it to the community, allowing anyone to build on it.

In September 2022, Coral completed a $20 million financing round led by FTX Ventures and Jump Crypto, with participation from strategic investors such as Multicoin Capital.

In October 2023, Backpack announced that it would launch a "regulated" trading platform called Backpack Exchange, demonstrating the team's continued commitment to innovation and adapting to market changes.

Mad Lads and Backpack are stories about innovation, market adaptability, and finding new opportunities in difficult situations. This case fully demonstrates the resilience and innovation of the Solana ecosystem.

Jupiter

Jupiter is the largest aggregation on the Solana chainexchangeSince its establishment in 2021, Jupiter has become a key protocol in the Solana ecosystem. As the first trading aggregator on Solana, Jupiter aims to provide users with the best exchange rates by integrating all major liquidity markets on the blockchain. In order to improve the user experience, Jupiter is constantly optimized and updated, integrating more mainstream DEXs on the Solana chain, such as Orca, Raydium, Serum, etc.

Jupiter has also done a lot of work on user experience. In addition to integrating mainstream liquidity pools, it also provides real-time updated exchange rates and quick access to integrated DEX project websites. For example, in the process of exchanging SOL for USDC, Jupiter can match multiple transaction routes for users and select the best path and price, saving users time and money. In addition, every transaction information provided by Jupiter is very transparent, including transaction speed, price impact rate, the minimum amount that users can receive after the transaction, etc., which is convenient for users to plan their assets.

Jupiter has also made significant progress in terms of funding and token plans. It is preparing to launch its native token JUP and announced at the Solana Breakpoint conference that 40% of JUP tokens will be distributed to the Jupiter Exchange community via airdrops, with approximately 955,000 users eligible. Another 20% of tokens will be distributed through token sales, with the remaining 40% reserved for internal personnel and strategic reserves. As a community-centric initiative, Jupiter announced a retroactive token airdrop plan, which will distribute 4 billion of the 1 billion Jupiter tokens (40%).

Python Network

Pyth Network is hailed as a game changer in the DeFi oracle space, primarily by leveraging topexchange, market makers and financial service providers to provide smartcontract应用程序聚合和分发价格数据。作为一种创新的去中心化预言机，Pyth能够从90多个信息源（包括CBOE、Binance、OKX、Bybit等主要交易所和做市商）获取金融市场数据，并将这些数据分发到40多个区块链。

Pyth consists of three core parts: data providers (mainly exchanges), the Pyth protocol (which aims to aggregate data from different providers and create a unified price and confidence interval every 400 milliseconds for each price source), and data consumers (i.e. end users, such as applications on Pyth-powered blockchains, which read aggregated price feeds and integrate the data seamlessly into their smartphones).contractlogic).

Pyth Network raised funds in three rounds of funding, with the latest round completed on January 7, 2022. The token debuted with a market cap of $468 million, with 90,000 wallets receiving the airdrop. PYTH tokens initially traded at around $0.32, with a circulating supply of 1.5 billion, and the remaining 85% of the total supply locked for 6 to 42 months.

此外，Pyth Network支持230多个应用程序，包括去中心化交易所（DEX）、借贷协议和衍生品平台。其基础设施每天可实现6500万次以上更新，提高智能contract操作的精确性和安全性。

Jito

Jito launched its referral program in late August and its points system in mid-September. Similar to Blaze, Jito has increased its appeal to users by rewarding JitoSOL holders and increasing their points in DeFi. Jito's SOL locked value increased by 320% year-on-year during the quarter to 6.67 million SOL. At the end of the quarter, about 35% of JitoSOL was locked in the protocol, compared to only 13% at the beginning of the quarter.

What makes Jito special is that users can earn MEV income through it. The Jito staking pool entrusts the user's SOL to the validator node that supports MEV, and the MEV reward is allocated to the equity pool as additional APY. Anatoly Yakovenko, CEO of Solana Labs, also gave a positive evaluation of Jito.

Jito Labs has raised a total of $12 million in two rounds of financing. The latest round of financing took place on August 11, 2022, and was a Series A round of financing. The lead investors were Multicoin Capital and Framework Ventures.

As of November 30, 2023, Jito reached a new TVL high of $400M, with 6.67M SOL currently staked, and has been trending upward since launch. Jito is the first staking product on Solana that includes MEV rewards.

On November 28, the Jito Foundation announced that it will launch the JTO governance token, which is an important step in the development of the Jito network. The JTO token will give community members the ability to directly influence the decisions and direction of the Jito network.

In terms of governance, the launch of the JTO enables token holders to make key decisions that shape the future of the Jito Network so that it continues to grow and prosper in accordance with the needs of those it serves and the needs of the broader Solana ecosystem. These decisions and initiatives may include:

• Setting fees for the JitoSOL staking pool

• Update delegation strategy by controlling the parameters of the StakeNet project

• Fees generated by managing JTO tokens and JitoSOL held by the DAO

• Contribute to the continued development and improvement of the Jito protocol and products

In terms of token economics, the total supply of JTO is 1 billion, of which 10% will be used for airdrops, 24.3% will be directly controlled by token holders through DAO governance on Realms, 25% will be used for ecosystem development, 16.2% will be allocated to investors (fully locked in 1 year and fully unlocked within three years), and 24.5% will be allocated to core contributors, namely the founders of Jito and employees of early contributors to the ecosystem (fully locked in 1 year and fully unlocked within three years).

The total amount of airdrop is 10%, or 100 million JTO tokens, of which 90 million JTO tokens will be distributed immediately by the Foundation, and another 10 million will be unlocked in the next year, all of which are from the 342,857,143,000 tokens allocated to community growth.

Eligibility for the JTO token airdrop is determined by users’ contributions to the development and growth of the Jito network. This includes users who hold JitoSOL for the long term, users who use JitoSOL in various DeFi protocols, Solana validators who run the Jito-Solana MEV client, and searchers who actively utilize Jito network MEV products.

This airdrop is based on past behavior, with a snapshot of qualifying activity on November 25, 2023. As part of this airdrop, the previously announced points program has ended and points will no longer renew.

BONK

BONK, the first Meme token in the Solana ecosystem, has recently achieved remarkable performance in the market. It initially attracted attention through a large-scale airdrop to the Solana community on Christmas Day 2022. The purpose of the token is to oppose the "Alameda"-style token economics after the FTX incident and restore confidence in the Solana ecosystem and SOL holders. Now, approaching its first anniversary, BONK has become active again, sparking comparisons with SHIB and speculation about its possible listing on mainstream trading platforms.

BinanceOn November 22, BONK launched a 1-50x U-based perpetual contract, showing support for this meme currency. BONK is built on the Solana chain, similar to the well-known Shib, and is a new MEME Coin for the public. 50% of the total supply of the project's tokens have been airdropped to Solana's Degen and DeFi traders, NFT artists and developers. This large-scale airdrop distribution has also injected more liquidity into the Solana ecosystem.

The BONK team started planning the project on December 9, 2022, and actively called on other projects in the Solana ecosystem to interact. With the coming of Christmas, they carried out a large-scale airdrop for the Solana ecosystem. As its anniversary approaches, along with the rise of Solana again, BONK and related ecological tokens have also ushered in valuation repair. However, although BONK has skyrocketed in the past month, its market value as a meme coin is already relatively high, and it has risen more than 12 times in just one month.

Orca

Orca is an important decentralized exchange (DEX) in the Solana ecosystem, recognized for its user-friendly interface and efficient trading experience. As the only DEX platform on Solana with pure automatic market maker (AMM) functionality, Orca also has its own liquidity pool, providing a simple and composable trading experience, which is seen as an ideal choice for the next generation of DeFi applications.

Orca is described as the most user-friendly DEX on Solana, with pure AMM functionality and a user-friendly trading interface, which allows users to more efficiently use their capital to exchange assets, provide liquidity, and earn returns. Orca emphasizes providing users with the best exchange experience, including minimal transaction fees and low latency, while ensuring fair prices.

In terms of technological innovation, Orca continues to innovate according to its development blueprint. For example, Orca began testing Whirl, a centralized liquidity active market making AMM similar to Uniswap V3.pools (Whirlpool), and was officially launched on April 25, 2021. This is an important step in improving capital efficiency.

Additionally, Orca raised $18 million in a 2021 Series A round led by Polychain, Placeholder, and Three Arrows Capital. Sino Global, Collab+Currency, Coinbase Ventures, and Solana Capital also participated in the round. The funds are used to enhance Orca as a capital-efficient and user-friendly DEX. This investment will help Orca further develop its platform, ensuring it remains competitive and innovative in the rapidly growing DeFi space.

As for the token market value, the price of Orca's token (ORCA) is currently $3.27, with a market value of approximately $143.8 million, a fully diluted valuation of approximately $326.8 million, a total locked value (TVL) of $85.12 million, and a circulating supply of approximately 43.99 million ORCA tokens. Orca has become a key player in the Solana ecosystem with its technological advancement, user experience focus, and strong financial support.

Drift Protocol

As a derivatives exchange on Solana, Drift Protocol's total trading volume recently exceeded $1 billion. At the end of the quarter, its TVL increased to $17.3 million, an increase of 87% year-on-year and 976% within the year.

Drift Protocol has become a disruptor in the decentralized derivatives market on Solana. Drift chose Solana because of its low-latency block time and high bandwidth, which makes transaction fees the lowest and fast settlement possible. In November 2021, Drift launched V1, introducing the concept of dynamic automated market makers (DAMM), providing guaranteed liquidity and superior trading experience, with a trading volume of nearly $10 billion in 6 months. V1 introduced limit order functions and Maker Orders, allowing users to become market makers. In December 2022, Drift launched V2, enhancing liquidity through "liquidity three-in-one" and becoming a full-service decentralized exchange. V2 introduced robust security measures and achieved success, with a trading volume of over $100 million and a TVL of $10 million. As of September 2023, Drift has accumulated a trading volume of $1 billion and a TVL of $19 million. Drift integrates Pyth price feed data oracles, providing diversified markets such as SOL, BTC, ETH, etc., ensuring data quality and low-latency user experience. Pyth’s confidence interval feature also helps Drift detect market fluctuations and unusual price distributions in a timely manner, protecting users and funds.

On October 26, 2021, the seed round raised US$3.8 million in funds, with investors including Multicoin Capital, Jump Capital, Not3Lau Capital, etc.

Zeta Markets

Zeta Markets is a comprehensive cross-margin derivatives protocol built on the Solana blockchain. It specializes in providing a variety of trading options, including options trading, term futures, and, starting November 4, 2022, perpetual futures. These services are all integrated into a single platform.

As a low-collateralized derivatives platform, Zeta Markets features a fully on-chain risk engine and a central limit order book (CLOB). This makes it a user-friendly platform that provides all the features needed for traders interested in trading with leverage in a decentralized environment.

On October 27, Zeta Markets announced the launch of Z-Score (the first step in launching a token), which allows users to earn Z-Score based on their trading activity on Zeta. Users will receive 1 Z-SCORE point for every $1 traded. In addition, the 24-hour profit and loss ranking will also determine the reward multiplier. The first season of Z-Score will last until December 20.

Zeta Markets announced in December 2021 that it had completed an $8.5 million financing round led by Jump Capital, with participation from Race Capital, Electric Capital, DACM, Airtree Ventures, Amber Group, Wintermute, Sino Global Capital, Genesis Block Ventures, QCP Capital, Alameda Research, Solana Capital, MGNR, 3kVC, Orthogonal Trading, LedgerPrime and SkyVision Capital.

Hivemapper

Hivemapper is a blockchain-based mapping network that launched its global network in 2022, collecting and creating map overlays through specialized dashcams and saving the data to a Solana-based blockchain network. Drivers can now start using dashcams provided by Hivemapper to earn the company’s trust by contributing to street-level imagery and increasing decentralized maps of the places they visit.cryptocurrencyHONEY as a reward.

The Hivemapper project started in 2015 and recently completed an $18 million Series A round led by Multicoin Capital on April 5, 2022. Hivemapper's native token HONEY is used to reward map contributors who contribute fresh, updated information, and map consumers obtain APIs by burning HONEY tokens. Burned tokens will be recast to increase the number of tokens rewarded to contributors. HONEY, as the token of the Solana ecosystem, has a total of 10 billion, but due to the incentive-based mining mechanism, less than 200 million have been mined so far. In the future, the project plans to control the release rhythm of token mining to stabilize and grow the value of tokens.

The initial distribution of tokens is as follows:

• 40% are allocated to contributors as a reward for their participation in building the Hivemapper network.

• 20% was allocated to investors to provide initial capital for launching the Hivemapper network.

• 20% Assigned to employees of Hivemapper Inc. for building the technology and operating systems required to run the Hivemapper network.

• 15% is allocated to Hivemapper Inc. to provide R&D and operational support for the Hivemapper network.

• 5% is allocated to the Hivemapper Foundation to facilitate the ongoing management and success of the Hivemapper network.

The redistribution mechanism of tokens ensures that the number of tokens that contributors receive is not limited to 4 billion HONEY. In order to use data from the network (such as through the map image API), HONEY tokens must be burned in exchange for map credits. The net number of tokens burned will be re-minted and distributed to contributors based on the net emission model. As more data is consumed, more HONEY is burned and more tokens are redistributed to contributors.

3. Inscriptions, NFT, DeFi, DePin

inscription

On Solana, there are two highly watched inscription projects - Sols and Lamp. Sols inscriptions are created by SPL-20, which is similar to the Bitcoin Ordinals protocol, with a total of 21,000. Although the casting process is complicated, it is hotly sought after due to its innovation and multi-link effectiveness screening. As of November 28, Sols' trading volume on the NFT platform Magic Eden reached 114,000 SOLs, with a floor price of nearly 6.3 SOLs. On the other hand, the Lamp inscription has also caused a sensation on Solana, and the smallest unit Lamport is similar to Bitcoin's Satoshi. The floor price of Lamp is 0.1 SOL, the total trading volume exceeds 12,000 SOLs, and the number of holding addresses exceeds 5,400.

Sols was quietly launched on the OKX Web3 wallet trading market on November 22, and trading has been opened, causing a surge in Sols. The floor price of each inscription has risen from about 5.3 SOL to about 12.5 SOL.

The popularity of Solana inscriptions may be related to the strong rise in SOL prices. With the launch of BRC-20 and the popularity of inscriptions within the Bitcoin ecosystem, the market has been ignited, triggering a significant FOMO effect and liquidity spillover. The inscription market has attracted widespread participation with its fairness and the absence of pre-mining or VC funding.

In particular, the emergence of Lamp inscriptions, proposed by Twitter user @babla11001, follows the SPL-20 format and has a total supply of 210,000. The process of creating its inscriptions has attracted great attention, including multiple steps such as uploading pictures, setting transfer rules, inscribing NFTs, and verification. Due to the huge traffic on the website, the pages for casting, inscribing, and verification often crash, resulting in fierce competition among participants, and success depends largely on luck.

NFT

Magic Eden

Solana, the main NFT marketplace on Solana, recently announced support for Solana’s compressed NFTs (cNFTs). This move aims to provide digital collectibles enthusiasts with an affordable and scalable option.

Unlike traditional Solana NFTs, the data of cNFTs is compressed and stored off-chain. This approach supports large-scale production because the cost of minting is significantly reduced.

In terms of technical upgrades: Solana launched state compression technology in the second quarter, an efficient way to store data on the chain. This technology has been successfully applied to the cNFT standard created by Metaplex by hashing the data into a Merkle tree and uploading its root hash. For example, the cost of minting 1 million cNFTs is approximately 5.3 to 63.7 SOL, which is much lower than the 24,000 SOL of uncompressed NFTs.

Market dynamics: By the third quarter, nearly 45 million cNFTs had been minted, a year-on-year increase of 316%.

Magic Eden believes that cNFT is very suitable for mass-produced collectibles in industries such as games, music, events, and the metaverse. Reducing the cost of NFT production may increase the popularity of NFT and become an ideal starting point for newcomers to enter the world of NFT. As the cost is reduced, the financial risk of collecting NFT is also reduced accordingly.

Thanks to Solana’s state compression function, the minting of cNFTs costs only about $110, and up to 1 million NFTs can be minted, which is much lower than the cost on Ethereum.

Solana significantly reduces the cost of NFT minting by introducing solutions like state compression and segregated fee markets.

Source: @flipsidecrypto

For example, the cost of minting 1 million NFTs on Solana is $253,000 and $113 before and after state compression, respectively. On Ethereum and Polygon, the cost of minting the same number of NFTs is $33.6 million and $32.8 million, respectively.

• DRiP:In the third quarter, DRiP occupied most of the cNFT market share (87.5%). DRiP cooperated with artists to create a large number of free NFT artworks. In mid-August, DRiP announced the completion of a $3 million seed round of financing, led by Placeholder.

• Dialect:A Web3 messaging app that leverages cNFTs launched its web app in early September, creating one of the largest NFT collections on the chain.

Other projects:

• Mad Lads:is a project that uses the executable NFT (xNFT) standard, representing a new token standard that can tokenize code. xNFT represents a dApp and is accessible directly from the user wallet.

• Crossmint:Provide developers with infrastructure to build NFT applications.

After large projects such as DeGods and y00ts left Solana, Magic Eden chose to support multiple chains, including Ethereum and Bitcoin. Despite the blow, Solana's NFT ecosystem is recovering and showing new vitality.

Tensor Platform

Tensor is a professional NFT trading platform based on Solana, providing fast data processing, batch operations andXiaobai NavigationAdvanced order types and other features. Data from the past month shows that Tensor has surpassed the veteran king Magic Eden to become the leader in the Solana NFT market.

Data source: The Block

Solana Monkey Business (SMB)

SMB is an established project on Solana, launching the third generation SMB Gen3, becoming the top brand of Solana NFT. SMB also launched NFT DAO Monke Dao and portfolio Monke Ventures.

Recently, NFT trading has focused on Smart Monkey Business (SMB), a project that algorithmically generates pixel monkey NFTs and dominates the Solana NFT market in terms of trading volume.

LSD

Comparing Ethereum and Solana:

Compared to Ethereum’s nearly $20.22B liquid stake, Solana’s liquid staked SOL ratio is only 3-4%, revealing its huge growth potential.

Risk vs. Reward: At similar risk levels, Solana’s staking rewards are nearly twice that of Ethereum.

Current status of liquid pledge:

• There are currently 295.7M SOL staked on the network, but the application of liquid staked derivatives is not yet widespread.

• During the FTX event, the TVL of liquid stake fell from a peak of 12.8M SOL to a low of 5M SOL, but then recovered to the pre-FTX event level of about 12M+ SOL.

The recently launched Jito staking service has accumulated over $44.86M (2.3M SOL) of TVL since its launch in late November last year. Growth across Liquid Staking Derivatives (LSD) and DeFi use cases has also been significant.

Marinade Finance dominates the Solana liquid staking market with more than 5.47M SOL staked, followed by Lido and Jito. Emerging liquid staking protocols such as Marinade, Socean, Lido, BlazeStake, and Jito are offering various reward programs to attract users to stake SOL.

Marinade Finance

As the project with the highest TVL in the Solana ecosystem, Marinade Finance is a liquid staking platform that focuses on simplifying the Solana staking process. Its main feature is to provide "liquidity staking", allowing users to convert pledged assets into liquidity at any time without waiting for the unlocking period.

In mid-September, Marinade launched a rewards program with the intention of catching up with the growth of new protocols. Although Marinade's TVL on SOL fell slightly throughout the quarter, it rebounded after September 20. In addition, Marinade Native, launched at the end of July, is a local staking product designed to complement Marinade's liquid staking service. It is an automated staking platform that distributes staking to more than 100 outstanding validators, with no performance fees and no smart contract risks.

Marinade also recently launched the Marinade Native program, which allows users to seamlessly delegate staking rights while retaining withdrawal rights. In addition, Marinade announced the Marinade Earn reward program, which will run from October 1, 2023 to January 1, 2024. Participants will receive a reward of 1 MNDE/SOL during this period. There is also a referral system where referrals can earn an additional 1 MNDE/SOL through a unique link.

As an old DeFi protocol launched in 2021, Marinade once had a TVL of more than $1.5 billion at its peak. Although it has declined compared to its peak, it is still the project with the highest TVL in the Solana ecosystem. Its token mSOL has good liquidity and has been listed on mainstream trading platforms such as Coinbase and Kraken.

BlazeStake

BlazeStake is a new liquid staking protocol launched in 2023, which aims to promote the decentralization of Solana nodes. Stakers can choose a standard delegation pool or any validator to stake SOL and obtain the liquid staking income of bSOL.

Blaze has been hinting at airdrops for bSOL holders since last year. In August, it launched a points system and its own TokenBLZE to airdrop based on user points. Blaze's SOL locked value increased by 1,234% year-on-year during the quarter to 678,560 SOL (worth $40 million as of November 30, 2023).

DeFi

In recent quarters, there has been a significant growth in the number of emerging Solana DeFi protocols that self-describe as “Solana DeFi 2.0.” This term represents a promise to avoid the predatory and low-volume token economics models common in previous cycles. Most of these protocols have not yet launched their own native tokens.

MarginFi

As one of the leaders of this trend, lending protocol MarginFi launched a points system on July 3 to reward users for deposits, lending and referrals. Its TVL increased by 743% year-on-year, rising to sixth place in the Solana DeFi TVL ranking, reaching $22 million. At the end of the quarter, MarginFi also launched its own liquid staking token LST.

Cypher

Perps trading platform Cypher launched a points system in mid-July. In early August, Cypher suffered an attack of about $1 million, and in order to help users recover losses, it accelerated its CYPH IDO. In the IDO and airdrop, more than 50% of CYPH was allocated to the community.

Solend

In early August, the Solend lending platform launched a points program. Unlike using points for potential airdrops, Solend combines points with its issued SLND tokens. The first season of the points program lasted about three months, with a minimum reward pool of 100,000 SLND (worth $54,000). Driven by the points program, Solend's TVL increased by 43% year-on-year to $57 million.

Raydium

Raydium, once the first AMM-style decentralized trading platform in the Solana ecosystem, is one of the core projects of Solana Summer. However, with the bankruptcy of FTX and the threat to the Serum protocol that shares liquidity with Raydium, as well as the attack on Raydium's own liquidity pool, Raydium has suffered a heavy blow, and its recovery is slightly worse than Orca.

Phoenix

Phoenix is a decentralized limit order book on Solana that supports spot markets and recently raised $3.3 million. Phoenix was tested before its official launch at the end of August. Since its launch, Phoenix has performed well in certain trading pairs, reaching a TVL of $378,000 at the end of the quarter.

Squads Protocol

Squads Protocol is a newly launched comprehensive multi-signature platform that has secured $6 million in assets and $9.5 million in total transaction volume.

Kamino Finance

Kamino Finance is an automated liquidity solution that earns income through market making. In the third quarter, Kamino's trading volume exceeded $1 billion and generated $1.25 million in revenue for depositors.

DePIN

DePIN, the decentralized physical infrastructure network, is leveraging Solana’s efficient technology to cover a wide range of areas from mapping, energy to logistics, providing opportunities similar to the modern gig economy. According to Kuleen Nimkar, head of DePIN at the Solana Foundation, people can earn extra income by contributing hardware to the DePIN protocol.

Helium

The Helium network uses Solana's state compression technology to mint network hotspots in the form of NFTs, thereby reducing costs. Helium is a typical case of DePIN business, working with Hivemapper to use the Helium network to verify the location of drivers.

Helium, a decentralized wireless hotspot network, is known as a pioneer in the DePIN field. Its history dates back to 2013 and was originally operated as a Layer 1 network. On April 20, 2023, Helium announced its migration to the Solana network (according to HIP 70). Developers prefer Solana because of its huge ecosystem, which integrates many developers, applications, and teams, and is superior to other chains in terms of cost and speed.

The native token HNT of the Helium network has no pre-mining, and the total supply is limited to 223 million. In Helium, the only way to pay for data transmission fees is through data credits (DC) obtained by burning HNT. These credits are priced in US dollars, non-transferable, and can only be used by the original owner.

After HIP-52 is implemented, the deployment of hotspot networks will no longer receive HNT rewards, but will be rewarded through two protocol tokens, IOT and MOBILE, for Helium IoT and Mobile networks respectively. The multi-token model allows each wireless network to be governed independently, facilitating DAOs to make better decisions. Each subnetwork manages its own Proof-of-Coverage rules, data pricing, and hotspot mining reward distribution mechanism.

The IOT and MOBILE network tokens obtained after deploying or covering the network can be exchanged for HNT, providing a value basis for network tokens. Currently, Helium has a market value of approximately US$420 million and is the largest DePIN project in the Solana ecosystem.

Teleport

With the emergence of decentralized maps, decentralized ride-sharing applications, such as Teleport, have emerged and are now available on the Apple Store. Teleport is a license-free ride-sharing application jointly owned and managed by drivers, passengers, and developers. On October 27, 2022, Teleport completed a $9 million seed round of financing, led by Foundation Capital and Road Capital.

Founder Paul Bohm pointed out that existing ride-sharing giants such as Uber have a monopoly in the shared travel industry. To solve this problem, Teleport has built a shared travel protocol TRIP, which aims to benefit drivers, passengers and the local economy while achieving autonomy. This protocol will first be applied on the Teleport platform, and participants who operate and develop the network will receive TRIP rewards, some of which may appear in the form of NFTs. TRIP rewards represent both participation and voting rights in the network. At present, the project has not yet released tokens, and the official website and Twitter will provide the latest information.

Tekkon

Tekkon is a Japanese project that encourages users to take photos of local infrastructure or report damaged infrastructure to earn token rewards while helping to improve the local environment. The project was launched by the Whole Earth Foundation, a nonprofit organization founded by Takashi Kato, who previously founded Fracta Inc., a software company that helps identify weak links in urban water supply networks.

In the Philippines, Tekkon has been warmly welcomed due to token incentives, forming a group of organizations known as infrastructure hunters. According to Bloomberg data, Tekkon has more than 128,000 active users, of which 90,000 are from the Philippines, and uploads about 30,000 photos every day.

Whole Earth Coin (WEC) is Tekkon's reward token, which can be exchanged for cash on Line Pay in Japan. The initial issuance of WEC is 300 million, with no upper limit. The token is used for a variety of purposes, including rewarding users and in-app operations. Tekkon plans to enhance the token's functionality in a variety of ways to build a more complete and sustainable ecosystem.

Render Network

Render Network is expanding its services from Polygon to the Solana blockchain, allowing individuals to contribute idle GPU computing power to assist in the rendering of motion graphics and visual effects.

IV. Conclusion

Solana has already responded to key challenges through a series of technological innovations. The Breakpoint 2023 conference was held in Amsterdam, bringing together more than 3,000 developers, investors, traders, business leaders, artists, etc. to discuss innovations in the ecosystem and future plans for the network. For example, the launch of the Firedancer validator client will increase the diversity of validators, which is the key to Solana's long-term resilience and decentralization.

Solana’s economic activity is diversifying. The Render Network has successfully migrated from Ethereum to the Solana blockchain, opening up new features such as live streaming and dynamic NFTs that benefit from Solana’s fast transaction speeds, low costs, and expansive network architecture.

Solana’s decentralization efforts have received critical support and boosts. For example, Nikolay Vlasov, senior solutions architect at Amazon Web Services, announced at Breakpoint that Solana nodes can now be quickly deployed on AWS, which helps expand the experience for users around the world.

Solana demonstrates its commitment to technology collaboration and innovation. James Tromans, Director of Web3 at Google Cloud, announced that Google Cloud’s BigQuery now has Solana data, enabling developers, businesses, and users to query detailed Solana data. This integration highlights Google’s existing infrastructure, making it an ideal company to introduce developers to the blockchain space.

The top Solana protocol plans to distribute tokens to its most active on-chain users via airdrops. As the newly acquired tokens circulate on Solana, the resulting injection of TVL will help boost the valuation of the entire Solana ecosystem.

With the growth of TVL, DeFi project airdrops, and the maturity of the liquidity staking market, DeFi and LSD products on Solana may attract a lot of capital. NFT projects, especially those that combine with the metaverse and gaming fields and enable unique user experience and innovation (such as xNFT), may become investment hotspots.

In the long run, with its focus on the Asia-Pacific market and global expansion plans, Solana may become the world's leading public chain ecosystem, attracting more international users and developers. Solana's technological innovations, such as high TPS and low latency, will enable it to take the lead in high-performance blockchain applications (such as large-scale games and complex DeFi applications). With the success of the DePIN project, it may lead a new blockchain application trend, integrating blockchain technology with multiple scenarios in the physical world and bringing innovation to traditional industries.

The article comes from the Internet:MT Capital research report: Solana is on the eve of a full-scale ecological explosion

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