In today’s edition, we’re giving some insights from the founder of Jupiter exchange, a leading protocol on Solana, as well as Solan Co-Founder Anatoly Yakovenko on what makes Solana an interesting ecosystem to build on.
Jupiter has caught the attention of many, processing ~$1B+ in volume per day, with an ongoing airdrop initiative to incentivize volume. The protocol is one of a group of protocols rapidly gaining traction on Solana.
Over and out ⬇
Crypto Market Update:
- Top Gainer (24H) in the top 50 mcap: Cardano $ADA increased in price by 16.5%.
- Top Loser (24H) in the top 50 mcap: Aptos $APT is down -2.9%.
- Total crypto market cap has seen an increase by 3.9% to stand at $1.59T.
- BTC dominance in the market is currently at 53.5%.
- Median gas price on Ethereum over the past 24 hours has been 50 gwei.
News:
-An issue with the Ledger connector library has been detected: users are advised to cease using any dApps until more details emerge.
- Swarm Launches "Open dOTC" for Tokenized Asset Trading: Swarm, a regulated DeFi platform, introduces a permissionless platform for trading tokenized real-world assets, following EU's MiCA clarity.
- Binance Challenges SEC Lawsuit: Binance and its founder, Changpeng Zhao, argue that the SEC failed to meet the "Howey Test" requirements in their lawsuit, seeking dismissal.
- Jamie Dimon Criticizes Bitcoin Amid JPMorgan's Blockchain Growth: Despite Jamie Dimon's repeated criticism of Bitcoin, JPMorgan's blockchain unit, Onyx, has tripled its workforce and handles $1 billion in daily blockchain transactions.
- Su Zhu of 3AC Faces Court Questioning in Singapore: Su Zhu, co-founder of the collapsed crypto hedge fund Three Arrows Capital, undergoes questioning in Singapore court as liquidators seek asset recovery.
- DWF Labs' Controversial Deal-Making Tactics: DWF Labs, a new player in crypto, raises questions with its rapid investment pace and discussions about price management in client deals.
- Senator Warren's Crypto Bill Gains Momentum: Despite skepticism about its passage, Senator Elizabeth Warren's anti-money laundering bill in crypto gains new sponsors, signaling increased political focus on cryptocurrency regulation.
Project Updates:
- Lyra Finance Unveils Lyra Chain: Lyra Finance announces the launch of Lyra Chain, a new blockchain platform.
- Rainbow Crypto Wallet Launches Points Program: Rainbow introduces a points-based incentive program for Ethereum and MetaMask users, aiming to boost engagement and attract new users to its platform.
- OKX DEX Hit by $2.7 Million Exploit: A decentralized exchange aggregator from OKX suffers a significant exploit due to a private key leak, with the company promising reimbursement to affected users.
- Euler Finance Announces Modular Approach: Euler Finance is set to offer infinite lending possibilities with a new modular system, tailoring services to individual needs.
-Liquid Collective Sets New Standards for Ethereum Staking: Liquid Collective introduces service level agreements to enhance Ethereum staking performance, aiming to boost yield and attract more users.
- Yearn Finance Reports Treasury Loss Due to Faulty Script: A script error causes Yearn Finance to lose 63% of a treasury position, prompting a request for users who profited to return a portion of their gains.
Background on Jupiter
Jupiter is a DEX aggregator on Solana.
The exchange comes complete with limit orders, a DCA function, perpetuals trading, and a bridge aggregator for users who wish to bridge to and from the monolithic chain.
Jupiter Founder on DeFi Scaling
Meow, Founder of Jupiter, says that as applications spread across different markets, their utility and utilization increase over time.
One blockchain allows for more markets, tokens, and use cases to be added.
The usability remains consistent regardless of the number of markers or tokens.
He adds that popular apps are often broken up between different layer-2 solutions.
While usability may decrease due to fragmentation, transactions can still occur within each solution.
Meow says that aggregators, like Jupiter, are significant applications of composability.
They provide real financial benefits to consumers by finding the best routes and minimizing costs in transactions.
High transaction costs on Ethereum discourage usage, especially for testing decentralized finance (DeFi) applications.
Layer-2 solutions offer cost-effective alternatives to perform complex operations without the limitations imposed by Ethereum's main chain.
Layer-2 solutions provide access to a wide range of markets and systems at minimal cost, enabling more sophisticated routing and transactions.
The density of applications on layer-2 is currently lower than on Ethereum's main chain, but it is expected to grow exponentially over time.
Scaling Approaches: Rollups vs. Solana
Ethereum plans to scale through rollups, which involve localized fee markets. This approach differs from Solana's perspective:
Solana Co-Founder Anatoly Yakovenko says that designing the next version of Solana involves considering priority fees, localized fees, and the dimensionality of fees.
The term "dimensionality" refers to the complexity and efficiency of running multiple applications simultaneously in a multi-core environment.
Building an operating system that supports multiple applications efficiently is challenging but necessary for scalability in a permissionless environment like Solana.
Solana prevents interference between applications by splitting them into separate chains.
For example, liquidations and NFT mints are separated to avoid price impacts on payments or DeFi trades.
By running different applications on separate chains, Solana maintains a composable system without increasing fees globally.
Rapid Development in the Crypto Industry
Meow says that similar to phone hardware advancements, the crypto industry experiencing rapid development.
Anticipating hardware changes, developers should write scalable software that effectively utilizes resources.
If crypto becomes a central part of finance, systems like Solana could become significantly faster within a short span of time.
Different DNA: Engineering Focus vs. Academic Research
Anatoly says that Solana's DNA is more engineering-focused, while Ethereum has a strong academic research background.
These differences in approach can have significant long-term impacts on the development and capabilities of each system.
He adds that the high cost of layer-1 on Ethereum drives investment in layer-2 solutions.
On Solana, where layer-1 costs are significantly lower, there is less incentive for layer-2 solutions.
While some layer-2 like solutions exist, they may not offer substantial advantages over the base layer.
Unique Applications and Advantages of Salana
Anatoly says that Solana's localized fee markets make it ideal for payment applications within the same domain.
Unlike Ethereum or layer-2 solutions experiencing fee spikes, payments on Solana remain unaffected by external factors.
He adds that Solana's transaction speed allows for in-person checkout experiences comparable to Visa's requirement of completing transactions under 2.5 seconds.
The completion time on Solana is around 1.4 seconds, making it suitable for real-time payment processing.
Anatoly says that Solana offers various payment applications focused on cross-border remittance using stablecoins like USDSC.
With increased adoption of stablecoins globally, there is potential for massive demand and opportunities to bring more users onto the blockchain.
Once millions of people hold dollars in their wallets on-chain, there will be a need to offer yield and decentralized finance services.
This development can be expected as stablecoin adoption increases and creates a global digital dollar competition.
Economic Incentives for Chain Deployment
Meow says that on Ethereum, the economic incentives encourage deploying applications on multiple chains to spread value and gain new resources.
However, on Solana, the game is different as the focus is on growing the number of users, use cases, tokens, and markets within one blockchain ecosystem.
Solana aims to provide deep value and a seamless experience across its entire stack.
Meow says that Solana offers a user interface (UI) for products like, swap functionality, and limit orders.
For payments and other functionalities like APIs or routing systems, Solana focuses on providing a great set of APIs for developers.
The Future of the Space and Competition with Uniswap
Meow says that Ethereum has limitations due to its complexity and high transaction fees.
He emphasizes the importance of moving the user experience as close to a seamless experience as possible.
He adds that the focus is on improving liquidity, accessibility, and overall user experience.
The goal is to bring in more assets and markets into their platform, incentivizing entrepreneurs to build on their network.
Meow highlights that they are taking a different approach compared to Uniswap.
Their focus is on optimizing for liquidity and making trading across any market as easy as possible.
They aim to provide APIs and tools to facilitate building payment use cases on their platform.
He adds that there are plans for a multichain system focused on their platform in the future.
This system will make trading across different chains on their platform much easier.
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