A Solana Update
Sharing some thoughts on the current state of Solana, my takeaways from HH NYC, and which network catalysts and new ecosystem projects I’m watching.
I attended the Solana Hackerhouse in NYC recently (March 28-29), my first Solana event since the Barcelona Hackerhouse in 2022. The circumstances which brought me to attend these two events, as well as the macro climate within crypto and beyond at the time of attending, were largely different, but the overall impression I was left with remained the same - man is it a good time to be building on Solana.
But let’s clear the elephant in the room first.
Solana is at a critical time in its development right now - a number of big airdrops, followed by the onset of memecoins brought in a significant wave of network activity; DEX trading volumes breaking new all time highs, Solana TVL climbing from $300m - > $8.4B over the course of a year, etc. The surge in activity, however, has also brought about ‘anti-network’ effects, causing worse network performance for users as transactions have been either failing or simply getting dropped as of late.
A beautifully simple visual from @0xBreadGuy
(TLDR; networking patches are required and are expected to come within the next few weeks according to Mert)
Solana’s key features (low fees, fast performance) worked flawlessly throughout the bear - crab market, when activity was still relatively low and did not affect performance in any way. But now that Solana is gaining more attraction, it has begun to experience the growing pains of scaling and adoption once more, and finds itself in the same shoes as Ethereum ~4 years ago, just as ‘DeFi Summer’ had emerged, changing the state of the crypto economy ever since.
If there’s one thing Solana has consistently displayed over its years though, it’s resiliency. Downgraded performance/network outages are easy to poke fun at, but they happen across many different networks, and they certainly happen well beyond the scope of blockchains. It’s also worth noting the volume of activity to which Solana has been subject to and congested from recently is significantly larger than that of other networks as well, but that’s a different story.
To me, this is simply a reminder that a lot of this tech is still early, but the teams who respond to adversity in earnest and continuously adapt and improve under these circumstances tend to outperform competitors in the long run.
With all this out of the way, let’s get to the interesting stuff.
I’ve remained heavily interested/invested in the Solana ecosystem and I believe it’s a critical time to be building in this space, which is ripe with opportunities for growth especially relative to other ecosystems. And so I headed to the hackerhouse with a few things in mind;
Temperature Check - What is the overall atmosphere and sentiment throughout the ecosystem?
Exciting upcoming network catalysts - What do people within the industry think of some of the upcoming developments at the networking layer?
Next gen of Solana builders + projects - Who are the next generation of key Solana teams and projects worth investing time and capital into ?
And of course, I was looking forward to meeting all the wonderful folks in the Solana community and ecosystem - this one goes without saying.
Takeaways From The Hackerhouse
Builders are not going anywhere - those teams who doubled down in the heart of the bear market are reaping the benefits now (see Jupiter, Kamino) - and those who left at the bottom are (probably) regretting their decision at this time. (See DeGods).
The fact of the matter is, teams are coming to build on Solana now. This includes existing projects from EVM ecosystems, e.g. Render to new innovative projects looking to push the limits of what is “Only Possible on Solana”.
Solana’s moat is no longer just the tech - it’s the community too. In today’s world of flashy tech and infra, it can get easy to overlook the value that a strong community brings to crypto-native businesses. Therefore, there is not much concern within the ecosystem around up and coming parallel blockchains overtaking Solana simply because they process transactions a few milliseconds faster - many people call Solana home and are simply unwilling to leave. \
That said, there is a lot of really cool stuff coming to Solana, some of which is already live and some of it still on the horizon. What excites me the most is not the tremendous growth and progress which we have already seen, but the vast potential that lies ahead.
Upcoming Catalysts
Token Extensions - By improving and extending the token development experience on Solana, lots of exciting new potential use cases for existing projects and new ones arise.
Firedancer - Firedancer aka Solana 2.0 is expected to be a critical milestone, not just for Solana but for the performance of distributed systems communicating real time information across the globe. Beyond magnitudes of improvements in throughput and speed, Firedancer will bring a significant bout of client diversity to the network, which is far more important for the long term success of the network in my opinion.
“Real world” Use Cases - AI, DePIN, RWAs, Payments, etc. Solana is collecting them all like Infinity Stones, as more high quality projects are calling Solana home.
State Compression - Unlocks in data storage efficiency can be significant for network scalability long term, and this is already being utilized in action with projects like Hivemapper and Drip.
Mobile Crypto Apps - One could argue we are a seamless and secure mobile crypto experience away from unlocking the next wave of mass adoption for crypto ecosystems. I haven’t used the Solana phone so I can’t comment on the experience, but I think it’s great that Solana is actively exploring this frontier.
The Next Generation of Solana Projects To Watch
The next generation of Solana projects is underway. Some key highlights and teams I’ll be watching closely below, including teams I met at the HH and those I’m watching anyways (may or not qualify as airdrop alpha given a majority of these projects do not have a token but nothing in life is guaranteed is it?)
Starting with the latest cohort of additions to the Solana Labs incubator;
Sanctum - Sanctum built an infrastructure stack for Solana’s liquid staking landscape, with a core tri-product model consisting of the Sanctum Reserve Pool, Router, and Infinity (multi-LST liquidity pool). Very interested in what Sanctum is building, especially considering how big liquid staking is on Ethereum and thus how exciting the opportunity for pattern matching growth on Solana.
JuicerFi - Juicer is building a one-stop-shop for Solana DeFi users, providing a sleek user-friendly interface for borrow/lending vaults, portfolio management, a Solana airdrop tracker, and a borrow looping vault to maximize users’ points on protocols like Marginfi , Kamino etc.
Flexlend - A new lending aggregator, providing a user-friendly interface for users to lend a variety of assets across top lending venues on Solana. Similar to how Jupiter Swap finds and executes the most capital-efficient liquidity routes to fulfill user trades, Flexlend finds and executes the highest-yielding lending strategy on behalf of us
Armada - Tokenomics tooling for Solana ecosystem projects, including token launch, governance, and liquidity services.
Espresso Cash - A new global payment services platform, enabling crypto payments between the US, EU, and Nigeria which can be easily sent and received via links/ QR codes and cashed out into fiat.
And some of the teams I got to meet at HH/ didn’t meet but am watching as well (and you should too) ;
Dain - Dain is building some a really cool ‘crypto autopilot’, an AI-enabled DeFi tool which I got to witness the live demo of first-hand (it was really cool). Think of using ChatGPT for all your on-chain activities, transforming complex and tedious DeFi strategy management / crypto trading portfolio management tasks into simple natural-language based tasks. The bot also lets you perform various analyses using supported sources. I’m personally very interested in these kind of chat-bot based crypto apps as I think they can carry an unprecedented UX transformation that can unlock a new wave of adoption and users.
Zeus Network - Building an interoperability layer for Bitcoin <> Solana liquidity, and recently launched on Jupiter’s LFG launchpad.
Dscvr- Solana-native social network platform, offering Web2-like feeds, an arcade for gaming, DSCVR API through GraphQL and enabling developers to create Solana native ‘Frames’ similar to Farcaster.
Arcade (my personal favorite)
Primitives Protocol - A new art collective project on Solana. I honestly did not know much about them but I met the founder in person who shared their latest whitepaper. TLDR; they’re building a new architecture for storing social graph data onchain called non-fungible graphs. A very interesting concept as I think we’ll see more social networks utilizing blockchain rails moving forward for optimizing the efficiency of various operations, i.e. improving data storage using something like, solana data compression - this is one of my more far-fetched takes though. Either way, I suggest reading the whitepaper and keeping an eye on the Primitives team.
Some more alpha (didn’t meet these teams at HH but still watching);
Grass Network - Big fan of what Grass is building; collecting data for AI model training utilizing unused bandwidth collected from anyone running a node. They’re running a points program so it’s pretty cool you can earn a monetary incentive for providing unused bandwidth - I think this is an early iteration of what can become a transformative paradigm for data / compute ownership business models (rewarding people for resources that are genuinely valuable to businesses for profit-generating operations).
Io Net - Building a DePIN for GPUs, connecting suppliers and buyers of hardware. AI/ML developers can easily rent/access resources like distributed clusters at a fraction of the cost with using centralized service providers like AWS, while anyone can start to earn monetary rewards for renting out their unused hardware resources.
Adrastea Finance - Building some cool structured yield products leveraging Jupiter’s JLP product.
None of this is financial advice! These are my personal opinions, and they are admittedly biased in nature.