Solana - The Past, the Present and the Future
Solana Scribes Hackathon entry - Track "Best Historical Summary of Solana"
On March 16th, 2024, a precocious child will turn 4. By the end of this decade, this child will be a household name across the entire world. You see, something incredibly special happened on this date way back in 2020. Yeah, right around when the world came down crashing and burning. A global pandemic was about to bring death to millions and crash the global economy.
It is fitting that this child was born into this chaos because it ate glass for breakfast. It broke all traditions and orthodoxy. This child reveled when chips were down. It was quirky, unique, and intuitively knew how to zig when others zag. I am talking about Solana, the world’s most performant blockchain that has since captured the imagination of ambitious developers all over the planet.
These are not what I would call normal devs. Calling them 10x devs would be a disservice. Brilliant engineers who are mesmerized by a searing vision. A vision which boldly wants to put NASDAQ on chain. Anatoly Yakovenko and Raj Gokal launched Solana at a time when there were barely 400 people using DeFi products on a given day. At a time when there were merely 300 NFT users per day. Ethereum ruled the roost, and the Ethereum Virtual Machine (EVM) completely dominated the nascent smart contract world of crypto.
Today, the Solana community is made up of millions of people because there are thousands of creators, artists and developers building on-chain. It is not a surprise that Solana is in the top 5 cryptocurrencies by market cap. That is nothing short of stunning given this industry has been around since 2009. Solana has surpassed many giants in a short amount of time.
So why do I think Solana attracted these brilliant devs? Let’s look at some growth numbers to provide context – since 2020, on average, crypto ecosystems have gained 278% of their overall developers. Solana has gained 888% - more than 3 times the average. Why is this significant?
It is because devs are a leading indicator of value creation – they create products that add value to customers. As customers grow, this attracts more devs and so the virtuous cycle continues. Apple has become one of the world’s largest companies because its app store created and sustained this very cycle.
So, what have the devs been doing? Well, they have turned Solana into a growth machine: as of Feb 13, 2024, Solana is processing 30M daily non-vote transactions, with 750K daily active addresses. It has almost $2B of total value locked. Solana often does over $800M daily on chain volume and $300M monthly NFT volume. These are astonishing numbers for a network that is still new and actively in development. And still growing.
In my opinion, Solana has witnessed this meteoric rise because the leaders powering the community are centered. Centered as opposed to bounded by dogmatic narratives such as “alignment” – Totally focused on increasing throughput and reducing latency. Solana’s engineering culture has built a machine that defies what any reasonable person thinks a blockchain should be able to do.
This has not come without hiccups. There have been many failures, but none of them were catastrophic. In Solana’s history, the state has always been sacrosanct, and the chain has never been rolled back. Talk about being censorship resistant. These failures need some context – building distributed systems is freaking hard. Like really, really, hard. It does not matter if it’s a centralized payment processor, or a database, or a blockchain.
One implementation bug is all it takes for everything to come crashing down. No amount of testing or quality assurance can eliminate the possibility of a bug. Has Solana halted before, and will it halt again in the future? Yes, to both. The interesting question to ask is are we comfortable with the tradeoffs? It comes down to practical prioritization from a CAP theorem perspective.
Between consistency, availability, and partition tolerance (CAP) you can only pick two. Solana has picked CP over AP because it would rather sacrifice availability (meaning it would halt) than allow unsafe writes or serve stale data. Ethereum on the other hand chooses AP (meaning it would not halt but would allow unsafe writes). I think the choice is quite telling. Solana is a beacon of hope for censorship resistance aficionados.
But Solana is much more than censorship resistant. It is fast, cheap to use, scalable, decentralized and serves its users with delightful UX. It is highly capital efficient, composable, and parallelized. Parallel execution and composability are very challenging to implement together if the components are not truly independent or if their parallel execution introduces dependencies that affect overall composability. But Solana runs towards these gnarly problems.
Solana has shipped local fee markets ensuring that no user must be impacted while they are minting an NFT just because someone else is trying to liquidate a DeFi account concurrently. As if all this wasn’t enough, Solana has shipped a crypto native phone that recently hit sales of over 100k units. It is single handedly taking on the duopoly of Apple and Google.
There is often a battle cry called Only Possible On Solana (OPOS) heard on crypto twitter. It serves as a reminder that billions will get onboarded eventually. It also showcases the community’s resilience. Solana suffered a drawdown from $260 to $8 and the ecosystem trauma bonded together to keep going. Solana survived in the aftermath of the infamous FTX collapse when no one gave it a chance. Why will Solana onboard billions of people? It is because of Solana’s cultural strength and an abundance of value creating apps.
As we speak a dApp on Solana called Helium has rolled out a nationwide $20/month cell phone plan across the U.S. Another one called Render is already powering products and brands such as Netflix and HBO. Yet another one called Hivemapper that brilliantly intersects crypto and AI to challenge Google and Apple maps’ dominance. They have mapped over 10% of the world’s roads already.
There are dApps such as Parcl that are disrupting the illiquid, vast real estate market by enabling users to go long or short at the city level (NY, Miami, Paris, Chicago, etc.) with just a dollar. Incredibly unique products such as GetCode are pioneering micropayments on Solana due to its super low fees and massive scalability. Culture coins such as BONK have inspired the community during the depths of the bear market.
Wallets such as Phantom and Solflare are pushing the envelope when it comes to keeping their users safe, secure, and highly performant. Marketplaces such as Magic Eden and Tensor have captured the imagination of NFT enthusiasts all over the world. Exchanges such as Backpack and Cube are innovating on many fronts, including executable NFTs and multi-party computation (MPC) technologies.
It’s not just the apps that are innovating – the base layer continues to improve with every single release. For example, the latest v1.17 of Solana is massive from a Zero Knowledge (ZK) perspective. With the activation of the ZK Token Proof Program, confidential transfers have finally become available! Keeping transactions private while being able to verify their authenticity is a huge deal.
The examples keep going on and on. There is so much talent building on Solana today that it is only a matter of time before escape velocity is achieved. And builders on Solana are sticky. They have found a home. The builders can rest easy knowing that decades from now, Solana is still going to be a single atomic state machine that will be optimized to the maximum amount physics would allow.
This scintillating blockchain, which currently has over 1600 independent validators spread out all over the world will handle more than 99% of the most coveted, valuable transactions in the world one day. I can clearly see a future version of Solana performing at over 100k transactions per second while serving a billion monthly active users with 10k validators keeping the state secure. This is truly OPOS. I can’t wait.
References
Developer Report: Analysis of Open-Source Crypto Developers by Electric Capital
https://www.helius.dev/blog/all-you-need-to-know-about-solanas-v1-17-update