Solana has taken center stage recently, with $SOL sitting at $40, up from it’s ATL of below $10 following the FTX crash…
With Solana Breakpoint recently wrapping up, incoming airdrops and points programs being implemented, and an interesting ecosystem of dApps to pay attention to, it pays to stay informed on what Solana may have to offer.
Stay alert, stay informed ⬇
Solana’s Resurgence
Solana needs no introduction; following the crash of FTX, the blockchain to the #7 ranked token by marketcap.
With a large developer ecosystem spanning a variety of sectors, the Solana space may be rejuvenated.
Kash Danda of Superteam DAO believes that there are three factors for Solana's resilience: community strength bound by trauma, a broad focus that goes beyond "crypto degens" to include mainstream users, and solid underlying technology.
He credits the trauma of network difficulties and price volatility for creating a more engaged and resilient community and praises Solana's technical features and the ecosystem's effort to reach beyond the existing crypto community.
Ethereum and Solana serve different needs. Ethereum focuses on security and high-value transactions, while Solana aims for high speed, low latency, and low cost.
Ethereum has the regulatory green light for major banks and treasuries, while payment processors are looking at Solana.
With cheap transaction costs, Solana could become a hotspot for consumer-facing dApps
Kash says that Solana serves two kinds of needs:
one where crypto is the main focus
another where it serves a supporting function
Brandon Potts of Framework Ventures believes that Solana's primary value propositions are being fast and cheap.
He says that Solana and its projects need to work on being “easy”, especially for developers.
He says that tooling and documentation need improvement to attract more developers.
Criticism & Considerations
Jordi Alexander of Seleini Capital points out that one of the major challenges for Solana is its difficulty in generating fees.
Due to the low cost of the chain, it only makes around $1m per month, while the supply costs are around $30m per month.
The design of the chain makes it hard for Solana to earn money, raising concerns about the sustainability of its price action.
Without generating significant cash flows that exceed investments, there may be limitations on creating value.
Jordi believes that Solana Co-Founder Anatoly Yakovenko may not fully understand the implications of certain dynamics in projects like Solana.
Jordi adds that in the digital economy, there might not be a need for 10,000 coins; theoretically, one could suffice.
Different geographical regions or communities might have their own digital currencies.
He believes community coins with no supply issues are more likely to be chosen as viable Options.
Jordi says that bear markets occur to redistribute coins and create doubt among holders.
For example, holding onto a large amount of $BTC without selling creates resistance to price drops.
He adds that distribution is necessary for market growth and exponential returns. Past experiences with platforms like Celsius, FTX, and Voyager have negatively affected distribution of $SOL.
Solana Firedancer & Breakpoint Takeaways
One of the takeaways from Solana Breakpoint 2023 in Amsterdam was the
Firedancer is a full reimplementation of a Validator for Solana.
It is being built by Solana Labs and aims to optimize performance and network reliability.
Jump Trading, with expertise in high-frequency trading networks, is leading the engineering work.
The goals of Fire Dancer are to increase Validator diversity on Solana and implement a consensus node with maximum performance.
While Solana is already fast, the aim is to achieve maximum performance with Firedancer.
Improved performance of Firedancer allows for significant headroom in terms of server capacity for running a Solana Validator.
Existing hardware can continue to be used, providing ample capacity even during high network usage events or spikes in traffic.
This scalability ensures that the system can handle millions of transactions without issues.
Firedancer’s performance optimizations allow for scalability during high network usage events, such as increased traffic from NFT minting.
Other takeaways from the Solana Breakpoint conference include the introduction of $JUP, the native token of Solana-based DEX Jupiter.
The Jupiter team will also be developing another protocol for a yield bearing stablecoin, $SUSD.
This stablecoin will be backed by leveraged $SOL LSTs.
New use cases have also presented themselves, with Teleport, a platform allowing operators to build their own local ride-sharing app, recently going live.
On the gaming side of things, Star Atlas released a new trailer at Solana Breakpoint. The team aims to create an immersive MMO experience, with transactions taking place on Solana.
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