CryptoIA Project Review - Compared with Ethereum, What is the Charm of Solana?

With the launch of Solana “DeFi Hackathon” and Raydium, the first AMM market in the ecosystem, the ecological applications on Solana which hold all the aces have shown a trend of rapid development, gradually completing the construction from infrastructure to the upper-level applications. A new pattern that feudal lords vying for the throne is formed.

1. What is Solana?

Solana is a high-performance blockchain that can remain decentralized and secure. Through the structure of Proof of History, it can reach an efficiency of 50,000 transaction process systems (TPS) on the basis of maintaining the consumption of 10 US dollars per million transactions. Solana uses time coding as data, which is independent of sharding, partitions, side chains and multi-chains. With its unique proof of history (POH) consensus, it has achieved high performance of at least 50,000 TPS.

This kind of blockchain protocol will provide fast price data for decentralized finance (DeFi) applications in the future, while meeting many projects’ special needs for high-performance.

2. Solana Technical Characteristics

In terms of technological innovation, Solana, through the 8 technologies like POH, base station Byzantine fault tolerance, turbines (block propagation protocol), Gulf Stream (memory-free transaction forwarding protocol), sea level (parallel smart contracts), pipelines (verification transactions), Yunsan (horizontally expanding account database) and archives (distributed ledger storage), has created a decentralized, permission-free network which can match the performance of a single node, breaking the impossible triangle problem.

The most incredible part worthy of mention is that Solana brings time into each block, which is called “Proof of History (POH)”. POH can be understood as a clock before consensus. Within an agreed time, nodes in the network can use PoH to continue processing transactions, because they can trust the order and timing of transaction information before reaching a consensus. For example, in Proof of Work (PoW), you can think of Bitcoin as a clock that ticks every 10 minutes. It takes about 10 minutes for Bitcoin blockchain to reach a consensus before reaching an agreement on the order of message processing. During these 10 minutes, there was no progress on the network. Solana uses a Verifiable delay function to quickly rotate through the verification node at a speed of 400 milliseconds to perform the same Sha256 operation. This greatly improves the block production speed and network efficiency.

Solana’s handling capacity exceeds 50,000 TPS, and the average TTF (Time To Finality) is 1.5 seconds. Solana’s performance is basically comparable to the current best globally distributed database Spanner, and Solana has substantial decentralization.

3. What are the advantages of Solana?

• Fast as lightning

If it is required to describe Solana in only one word, that is “fast”. Solana’s block generation time is 0.4 seconds, Bitcoin’s block generation time is ten minutes, and Ethereum’s block generation time is more than ten seconds, which will take longer during congestion. The most direct benefit of being fast is that there are more transactions processed per unit time. Just like a highway, the faster the unit time, the more vehicles will pass. For blockchain, the faster the network, the better the user experience. The main reason for Solana’s efficiency is that Solana innovatively brings time into each block, creating a world the decentralization is throughout. Each transaction will get a timestamp and wait in line, so that different nodes are much faster to verify, this is know as PoH consensus

• Scalable:

Another feature of Solana is that its substrate layer can be easily expanded, so that there is no need to shard or separate layer2 like Ethereum. In layman’s terms, it’s like that other blockchains just build a four-lane road while Solana builds an eight-lane highway which can be continuously widened to both sides, and it’s cost is lower than repairing a viaduct which means that solana can carry an ever-increasing number of users and transactions. Now the question that comes into mind is “Why did Ethereum not do this?” Maybe it is limited to the technology at the time. Maybe Ethereum didn’t expect that the blockchain would develop so quickly.

• Low cost

Solana handling capacity could reach the efficiency of 50,000 TPS, and per million transactions just take US$10 as fee. The transaction fee is less than US$0.00001 for each action. The block confirmation time is 400ms and there are more than 500 verification nodes worldwide.

• Strong background:

Solan’s fourth advantage is the support of FTX. Not only providing financial support, FTX also developed a DeFi project, Serum, and built a series of ecological applications around this project.

Later, Solana also obtained strategic investment funds from OKEX and MEX. It is also gaining fast recognition from traders in the industry.

4. Solana Ecology

(1) Overview of Solana Ecology

Solana has 577 global nodes, with a total transaction volume of nearly 1.6 billion times. The ecology on it has also been developed comprehensively, with more than 30 native projects on it. There are many types of native projects which can be divided into several categories, including trading, synthetic assets, lending, IDO platform, asset management, derivatives, infrastructure and tools, and NFT. Among which the trading sector has the most amount of projects and is well-established, DEX like Serum and Bonfida already has a certain scale of trading volume. In general, the current Solana ecosystem consisting of native projects and projects that have been completely migrated to Solana has the following features:

1) There are a large number of trading projects on Solana, and trading projects take Serum as the core, serving as the trading interface of Serum and sharing liquidity with Serum. The trading projects include NFT trading market.

2) Synthetic asset and lending projects, which are similar to projects on Ethereum, are in the early stage and have not yet been launched. In addition to the general synthetic asset minting and lending functions, Parrot plans to support the mortgage of Ethereum LPToken on Solana to lend assets.

3) Among asset management projects, SolriseFinance has launched a test version. Asset management projects develop around trading, providing functions such as the creation and management of investment portfolios, and the execution of automated trading strategies.

4) Derivatives include option trading, margin trading, volatility index and market forecasts, among which only MangoMarket, the margin trading protocol, has been launched, supporting up to 5 times leverage trading.

5) Infrastructure projects mainly include wallets, oracles and developer tools, among which wallets have the largest number and been mature. Sollet is the most commonly used wallet in Solana ecosystem.

6) NFT items are composed of entertainment platforms, games and collectibles. Among them, the music platform Audius is a project that has been migrated from other public chains to Solana. It has developed relatively mature with more users and listed tokens.

(2) Overview of Solana Ecological Project

■ Ecological focus

1) *SOLSurvivor (a street fighter style game on the chain) has been deployed on the mainnet.

2) *Oxygen (a Serum-based DeFi prime brokerage protocol) was officially announced.

3) *Bonfida and Frontier jointly expand Solana’s NFT ecosystem.

4) *Solong Wallet stated its goal and vision to become Solana’s preferred wallet.

5) *Kin was officially migrated to Solana.

6) *SOLAR bridge connecting Arweave and Solana is now completed.

7) *TrustWallet announced that it supports SPL tokens.

8) *dfuse is a SPL token registration center on Solana chain.

9) *LunaDEX is officially launched on Solana.

10) *Circle and Visa have reached a cooperation and are committed to bringing USDC payments to the Visa network.

■ Core project

1) Bonfida: Bonfida is a complete product suite that connects the gap between Serum, Solana and users. Bonfida team released the first product a few months ago, and then developed APIs with more than 1 million calls per day, Solible (Solana’s NFT market), wallets, and Serum dashboards.

2) USDC: Internet payment and capital infrastructure. Not long ago, Circle team reached a partnership with Solana and launched the first stablecoin, USDC-SPL, on Solana. Currently, USDC-SPL circulating on Solana chain reaches 50 million U.S. dollars.

3) Serum: A faster, cheaper and more powerful DeFi. Serum is developed under the leadership of SFB (SamBankman-Fried) and is currently the fastest and cheapest DEX in the industry. Serum is the first decentralized exchange launched on Solana. It has an on-chain order book function, allowing its transactions to be confirmed within a second, and the average transaction fee is $0.0001. Since its establishment, Serum’s trading volume has exceeded 350 million U.S. dollars, with an average daily trading volume of 4 million U.S. dollars.

4) Solflare: SolFlare is a simple and intuitive interface that helps users connect to Solana chain and manage SOL tokens. Initiated by DokiaCapital team, Solflare provides a user-friendly interface for mortgaging SOL.

5) ChainLink: ChainLink provides a better future for universally connected smart contracts. ChainLink and Solana have reached a partnership to provide high-quality price information for Serum on Solana and future DeFi products.

6) Arweave: Arweave is a new type of protocol that supports permanent storage. Arweave and Solana recently collaborated to launch SOLAR bridge built by BeringWaters team. The storage bridge is an important step in Solana’s continued development, making Solana the first blockchain to record and store transaction history on a dedicated storage network.

5. Conclusion

Solana integrates the strengths of hundreds of projects and has made a great breakthrough in handling capacity. The entire technical focus is completely shifted to speed, but it is susceptible to hardware interference, which limits the development of the project itself. As for the future development of Solana, whether it will be better than Polkadot or can be compared with Ethereum or not, we can only look forward to it and look for an answer in the long river of time.

More about CryptoIA:
Twitter: https://twitter.com/CryptoIA_2020
Telegram Group: https://t.me/CryptoIA_Global
Telegram Channel: https://t.me/CryptoIA_News