This article will show you how Solana’s market value increased 170 times last year

This article is reprinted with permission from the public account "老雅痞" laoyapicom

We should be both familiar and unfamiliar with SOL. The familiar point is that its on-chain ecological application products are one of the most public chain projects besides ETH (of course, it is also because of SBF's recommendation), and it was also the public chain project with the highest increase last year. As of the end of November last year, the market value increased by 170 times last year, and those who got on the train also made a lot of money. The unfamiliar point is that apart from some intuitive feelings about the price, we don’t know its underlying technical solutions and operating logic. With the popularity of the Social-Fi project Stepn on SOL, Zhaomao will take you to understand what Solana is.

Project Introduction

Solana is an open source project, a new, high-performance, permissionless blockchain. The Solana Foundation is located in Geneva, Switzerland and is responsible for maintaining the open source project. As a blockchain network focused on fast transactions and increased throughput, it uses a unique transaction ordering method to significantly speed up transactions. Users can pay transaction fees and interact with smart contracts through SOL, the network's native token. The project was officially launched in 2017 and was created by Anatoly Yakovenko of Solana Labs, using a new transaction verification method. One of the reasons for its creation is to solve the problems of insufficient scalability and poor speed faced by Bitcoin, Ethereum and many other projects. It uses a countermeasure called "Proof of History (PoH)" to increase the number of transactions per second to thousands of transactions. Its core goal is to break through the limitations of low scalability and low throughput without reducing security and decentralization.

$Sol is the name of Solana’s native token, which can be passed to nodes in the Solana cluster in exchange for running on-chain programs or validating their outputs. The system can perform small payments of fractions of SOL, called lamports, which are named in honor of Leslie Lamport, the person who had the greatest impact on Solana’s technology. One lamport is worth 0.000000001 SOL.

Basic information of tokens:

Token Utility:

1. Pay transaction fees when using the network or smart contracts;

2. Pledge tokens to participate in the Proof of Stake consensus mechanism.

Project Features

• TowerBFT — PoH-optimized version of Practical Byzantine Fault Tolerance

• Turbine — A block propagation protocol

• Gulf Stream — Transaction forwarding protocol without memory pool

• Sealevel — Parallel smart contract runtime system

• Pipelining — transaction processing unit for validation optimization

• Cloudbreak — Scale-out account database

• Archivers — Distributed Ledger Storage

How it works

Solana creates a trustless system for determining transaction times through a unique method we call "Proof of History". Proof of History is a comparison to Bitcoin's "Proof of Work", where blocks are large, unordered groups of transactions, and each Bitcoin miner adds the time and date to the blocks they mine based on their local clock. The time may vary from other nodes, or even be wrong. The node must then determine if the timestamp is valid.

By ordering transactions in a hash chain, the amount of information that validators have to process and pass around in each block is reduced. Using a hashed version of the latest transaction state can significantly reduce the time it takes to confirm a new block. These features create a high-performance network with a block time of 400 milliseconds that can process thousands of transactions per second. For comparison, Bitcoin's block time is about 10 minutes, while Ethereum's block time is about 15 seconds.

Data analysis

On-chain data

According to solscan data, the current number of daily active addresses fluctuates around 300-500k, and the number of new accounts is between 200-400k (there are cases where a single user has multiple accounts).

About 200 new token types are added every day, and the number of new NFTs fluctuates between 50k and 100k. The former fluctuation is strongly correlated with the SOL price, while the latter is strongly correlated with the overall NFT market conditions.

There has been a steady increase in daily active protocols and daily active voting accounts, which may be the reason why new developers and capital continue to flow into the SOL ecosystem.

In terms of locked-up volume, it currently ranks sixth among public chains, lower than ETH, Terra, BNB, Avalanche, and Fantom. The current TVL is 6.6B$. Although the locked-up value shows a phased downward trend, the SOL locked-up share is basically stable and fluctuates. The main locked-up amounts are distributed in Serum, Raydium, Marinade Finance, Quarry, and Solend. Interestingly, among the top 20 protocols in terms of locked-up share, except for lido (ranked 12) and RenVM (ranked 20), the rest are Solana native protocols. This may be one of the reasons why Sol's locked-up volume is lower than that of public chain projects such as Terra.

Excellent ecological application

Defi: Serum

Serum is a protocol and ecosystem that brings faster speeds and lower transaction costs to decentralized finance. It is built on Solana and is completely permissionless. Ecosystem partners can combine with Serum's on-chain central limit order book to share liquidity and power market-based functions for institutional and retail users.

More specifically, Serum's on-chain central limit order book and matching engine provides liquidity and price-time priority matching for traders and portfolio projects. Users can benefit from this trading model through the ability to choose the price, size, and direction of the trade. Portfolio projects benefit from Serum's existing architecture, bootstrapped liquidity, and matching services.

Aggregator: Bonfida

Bonfida is a complete product suite that bridges Serum, Solana, and users. It is also the flagship product of the Serum GUI and brings the first-of-its-kind Solana data analytics to the field, and its API is used by some of the largest market makers in the field.

The main points are as follows:

• FIDA: The Bonfida token that accumulates all value of the product suite. FIDA will be fully integrated into Bonfida and govern all fees earned by Bonfida.

• Bonfida Serum GUI: The first choice for trading on Serum. Bonfida DEX will provide traders with the best features and experience to maintain its position as the most used Serum DEX, including built-in wallet, launching SOL airdrop, etc.

• Serum API: The only repository for Serum transactions. Currently used by Coingecko, Coinmarketcap, and some of the largest market makers in the space.

• Serum Dashboard: Bringing together all components of the Serum ecosystem in one place. It will embed a Serum GUI, trading, lending, and more in one place.

• Bonfida Bots: Build and subscribe to on-chain trading bots for Serum. Will allow users to automate their strategies using technical indicators and earn income by selling FIDA subscriptions

• Solible: The Home of Solana’s NFTs. Solible is an NFT exchange built on Solana and Serum.

NFT exchange: magic eden

Magic Eden is an important NFT trading market on Solana, with a market share of 90%. Users can view the real-time market on DappRadar at any time. It provides a good market experience and economic value for NFT creators and their communities. It was officially launched in mid-September 2021, and the transaction volume has exceeded 2.6 million SOL.

Web3.0 Project: ChillChat

Chillchat is a pixel art NFT project running on the Solana chain. The content is entirely made by its players and has social, trading and other functions. Its vision is to create a pixel art metaverse that allows people to design, play, create, manufacture and earn. The current player popularity is good and the game world is open. Origins are the creators of the Chillchat virtual world (presented in the form of NFT). All creations come from them, and there are 1,500 origins in total. 400 will be auctioned, 900 will be reserved for whitelist members to mint at 2 SOL, 100 will enter the public mint, and the remaining 100 Origins are reserved for team members, giveaways and partners.

The initial price is 1,500 Origins (after the launch, players can create NFTs and trade them by themselves. The current floor price is 33sol)

The role of OriginNFT: Output $chilling, mint GEN2 (you can continue to use GEN2 to mint GEN3...)

The economic model adopts a single-currency model (a total of 1.5B can be used for governance and staking)

Token distribution: 50% held by the treasury, 20% by the team, 10% by the seed round, 5% by the private placement round (the above lock-up period is 2 years), 5% by partners (lock-up period is 1 year), 2% by airdrop, 5% by ido, and 3% by Origin

Social-Fi: Stepn

STEPN is a Web3 lifestyle app with built-in Game-Fi and Social-Fi elements

Built around a basic daily activity for most people, STEPN is the first project to effectively implement a functional move&earn concept, ranking fourth out of more than 500 projects at the Solana Ignition Hackathon 2021. Users equip themselves with NFTs in the form of Sneakers. By walking, jogging or running outdoors, users will earn game coins that can be used in games or cashed out for profit. With Game-Fi, STEPN aims to drive millions of people towards a healthier lifestyle, combat climate change and connect the public to Web 3.0, while relying on its Social-Fi aspect to build a lasting platform to cultivate user-generated Web 3.0 content. (The specific content has been published on the Lao Yapi official account, and interested users can read it by themselves)

The project research mind map is as follows:

One-stop DAO management tool: Squads

With Squads, users can create web3 native organizations on Solana. Not only can decisions be made, but value can be managed as a collective. Squads are multi-signatures controlled by governance, allowing for flexible allocation of voting power. Two types of squads can be created:

1. Team (members encoded on-chain, no tokens, member weighted on-chain voting)

2. Multisig (a simple multi-signature wallet that manages team assets by requiring multiple signatures to confirm transactions).

Each squad has a built-in safe that allows depositing/sending fungible tokens and NFTs as well as diversifying them (currently, users can initiate exchanges directly from the project’s interface).

(Note: Squads are illiquid and no tokens are airdropped to any wallet upon creation. Squads identify members only by their public keys.)

Summarize

Compared to many public chain projects, Solana is still very young. It is an extremely high-quality project in terms of its current advantages in transaction speed and scalability. Although the current token price is not as good as its holders wish (it is greatly affected by the overall market conditions), it has also attracted the interest of more and more investors. At the same time, many technical experts are also using Solana for technical development, and the current active and rich ecology is the best example.

Perhaps one day, when we see Solana gaining more traffic and deriving more application scenarios, we will forget its identity as the "Ethereum killer" and make it the glory of the blockchain industry.

In short, the future is promising~

Special statement: Our article is not intended as investment advice. Please think independently. As the saying goes: be cautious when investing.

References:

• https://docs.solana.com/introduction

• https://analytics.solscan.io/public/dashboard/8d888828-baae-47b9-948b-d087e5de1411

• https://docs.projectserum.com/introduction/overview

• https://whitepaper.stepn.com/

• https://medium.com/@Chillchat/chillchat-discord-3-0-of-the-metaverse-where-nfts-come-to-life-fdba12cf70df

• https://squads.medium.com/?p=8b08c3d2c211