Author: Blocklike
"There are some signs that Solana may be able to regain its former glory."
More than half a year after the collapse of FTX, the market has heard the news of the restart of FTX 2.0, and the restart plan may have attracted the interest of large companies including Nasdaq, Ripple, BlackRock, etc. As some crypto companies that have failed have re-entered the market (such as 3AC and the founders of PayPal Finance have launched new products to the market), there are more and more discussions about whether FTX is expected to make a comeback.
At the same time, Solana, an important member of the FTX "family", has also received widespread attention recently.
On the one hand, Solana co-founders have recently been very active in expressing their views on Solana, sparking community discussions. Whether it is becoming the Apple of the crypto space, or not fearing the pressure from emerging blockchain networks such as Scroll, Base, and Linea, or believing that Ethereum can become Solana's L2 solution, these ideas all demonstrate Solana's ambition to regain its glory.
On the other hand, hot events surrounding Solana continue to add heat to Solana.
In April, the decentralized IoT wireless network Helium migrated to Solana, and SOL rose from $20 to $25.
In May, the popularity of BRC-20 and Meme tokens caused Gas prices to remain high, and many users turned to Solana for transactions;
In June, the U.S. SEC classified SOL and other tokens as unregistered securities, which attracted the attention of the market and many industry insiders including Vitalik;
In addition, according to relevant data, in May, Solana’s daily active address number reached a maximum of 490,000, which is almost the same as the 500,000 daily active addresses when FTX officially filed for bankruptcy on November 11 last year.
Solana, a public chain that was once highly anticipated by the market, saw its price plummet, its TVL greatly reduced, and many FTX-related projects in the ecosystem suffered heavy losses after the collapse of its largest supporter FTX. Its reputation also almost plummeted.
Returning to mainstream status is what Solana is eager to accomplish. So can Solana regain its glory?
From "the spotlight" to "the dark side"
As a public chain deeply bound to FTX, Solana was pushed to the forefront in the FTX incident.
On the eve of the collapse of FTX, Solana Foundation was exposed to hold a large number of FTX-related tokens, including FTT worth about $107 million and SRM worth $83 million the day before FTX assets were frozen. This amount of assets deeply revealed the close relationship between Solana and FTX, and voices that were badmouthing Solana continued to rise.
On November 11, 2022, with FTX officially filing for bankruptcy, Solana suffered a severe blow from its reputation to its ecology.
The Solana platform token SOL plummeted from US$36.72 to a dozen US dollars. By the end of December 2022, SOL was even below US$10. The market share evaporated by billions of dollars in just over a month.
Serum, as the first DEX on Solana, accounts for half of the DeFi liquidity on Solana. Affected by FTX, its trading volume and liquidity dropped to zero. Other FTX and non-FTX platforms either encountered liquidity crises or were forced to close due to lack of funds.
Before the collapse of FTX, the TVL of the Solana ecosystem, which was nearly $1 billion, dropped below $300 million, and has not exceeded $300 million to date.
"Ethereum Killer", "Next Generation Blockchain", "High-Speed Public Chain", "King of DeFi", these were all titles given to Solana by the market, which reflected the recognition of Solana's technology and ecology, and the expectation for the rise of new public chains. Before the FTX incident, Solana was facing a public relations crisis due to frequent downtime and large-scale asset thefts, and the collapse of FTX directly dragged Solana to the bottom.
The new public chain that was very popular in the last cycle no longer seems to be the "darling" of major media and capital. The L1 new public chain landscape has changed, and Solana has been forced to fade out of history for a period of time.
Is Solana Dead?
Some people believe that Solana has lost its competitive position in the L1 public chain. Without a lot of external attention and the halo of the past, Solana seems to be struggling now.
However, there are also many voices that believe that the most direct impact of FTX’s collapse on Solana is the price of SOL, which in turn allows Solana to "get rid of financial speculators" and return to real technology development.
Is Solana really “dead”?
SOL price rebounds, and the number of new addresses on the chain surges
According to CMC data on July 10, the price of SOL was $21.2, and its market value ranked ninth. Compared with the $9 during the FTX crash, the price has rebounded a lot, with an increase of more than 130%.
According to data from The Block, Solana’s daily active addresses rose again in May. On May 17, the number of active addresses on Solana reached 493.1K, an increase of nearly 55% compared to the lowest daily active address number in the first half of the year.
It is worth noting that the number of new addresses on the Solana chain also saw a significant surge in May, with a maximum increase of more than 300,000 addresses.
Some analysts believe that the surge in Solana’s address count in May is related to the rise of meme coins and BRC-20. The popularity of meme coins and BRC-20 has led to high gas fees on the Bitcoin and Ethereum networks, prompting many users to switch to Solana, which has lower gas fees and faster speeds, for transactions.
The number of developers remains at the forefront
For a public chain, the number of developers is one of the important indicators of its popularity and an important component in promoting the development of the ecosystem. The good features of the Rust language itself and the high performance of Solana are still attractive to developers.
Although some developers chose to "escape" after the FTX crash, the overall number of active developers on the chain remains relatively stable and remains at the forefront.
According to the latest data from developerreport.com, Solana ranked fourth in terms of monthly active developers on June 1, reaching 363, which is still a certain advantage compared to other public chains. In addition, looking at the repository with the most followers under Solana on Github, the number of contributors reached 455, while the number of contributors under the repository with the most followers of Polkadot, Polygon, and Avalanche were 261, 51, and 82, respectively.
Source: developerreport.com
Liquid Staking Outperforms
With the popularity of liquidity staking, the Solana ecosystem has also seen a surge in liquidity staking, which has brought Solana back into the mainstream market in recent times. According to StakingRewards data on July 10, SOL is currently the second largest staking asset, with a staking market value of more than US$8.3 billion and a staking rate of 69.64%.
NFT sales enter the top 3
According to Cryptoslam data, Solana NFT sales in the past 30 days ranked third, only behind Ethereum and Bitcoin NFT data, higher than the fourth-ranked Polygon. NFT sales in the past 30 days were approximately US$40 million.
Some opportunities and challenges
Currently, both L1 and L2 are facing fierce competition, and Solana is also "working hard" to attract users and developers:
In early April, Solana announced the launch of a new method of storing data, "state compression", to significantly reduce storage costs. According to officials, this method can be used to store any type of data on the chain, and the first use is to compress NFTs. Users can mint 1 million NFTs for about $110.
On April 13, the Solana phone Saga was launched, attempting to gain more crypto users through a Web3-centric Android smartphone.
We will continue to hold Solana Hacker House events in multiple cities to embrace more developers from all over the world and enhance the value of the Solana chain itself. In May, Solana Hacker House landed in Taipei, and in November, the event will also go to Hong Kong.
Launched the "NFT Showdown" competition to promote the development of the NFT ecosystem.
Launching a $10 million grant program for AI-focused projects built on Solana.
In addition, the community's optimistic voices about Solana seem to be increasing. @CryptoKaleo, a KOL with nearly 600,000 followers on Twitter, recently expressed his views on Solana. He believes that Solana's continued building after the collapse of FTX may allow Solana to return to its level before the bankruptcy of FTX in the subsequent development. This view has also been supported by some users.
The above are opportunities for Solana, but it still faces challenges.
Faced with the rapid expansion of other public chains, Solana still needs to take more measures to expand its ecosystem. In addition, the trust crisis caused by the collapse of FTX still exists. Strengthening ties with the community and enhancing community confidence are also areas that Solana needs to focus on.
Can the ambition be realized?
Solana co-founder Raj Gokal recently said that Solana has the potential to become the Apple of the crypto space, with the goal of achieving 10 to 100 times growth through small business and infrastructure partnerships.
Raj believes that the advent of the iPhone took Apple nearly a decade of research, and the Apple application ecosystem has reached today's level. Everything started with "relentless focus on simple interactions that must work perfectly", which is also the focus of Solana's core engineering and ecosystem. This analogy seems to want to express that Solana's silence is actually precipitation, with a tendency of "silently holding back a big move".
In addition, with the launch of new products by Three Arrows Capital and the founder of PayPal Finance, the concept of "bankruptcy restart" is gaining widespread attention in the crypto community. If FTX 2.0 is restarted, it will undoubtedly gain interest from users and institutions again. FTX projects, led by Solana, may have the opportunity to regain their former glory.