Original Title: "MT Capital Research Report: The Eve of Solana's Comprehensive Eruption"

Original Author: Xinwei, Ian Wu

TL;DR

·The Solana ecosystem is on the eve of a comprehensive outbreak, maintaining strong growth despite challenges such as the FTX bankruptcy. TVL has significantly increased, and DeFi Velocity shows a very high liquidity utilization rate. Daily trading volume is steadily increasing, far exceeding other public chains.

·Solana Foundation is taking frequent actions: network stability and decentralization are steadily advancing, hosting Hyperdrive hackathon to support ecological projects, and focusing on the Asia-Pacific market layout.

·Highlights of the ecosystem: Visa launched USDC settlement on Solana, MakerDAO is considering integrating Solana SVM into its system, and Solana Pay is integrated with Shopify.

·Ecological projects are blooming: The largest Solana airdrop season in history is about to begin, with star projects in various tracks such as DeFi, LSD, Meme, Inscriptions, NFT, and DePIN attracting market attention.

Introduction

After the transition from POW to POS in Ethereum, the issue of centralization has been brought to the forefront. The competition between Layer2 becomes more intense, further fragmenting liquidity and leaving the application layer with little to offer.

Regarding the Bitcoin ecosystem, BRC20, along with a variety of different inscription protocols, has sparked community FOMO. After being listed on Binance's ORDI, it reached its peak, but criticism of "no applications, only memes" has also begun to slowly recede.

After the FTX bankruptcy incident, the SOL token in the Solana ecosystem plummeted to a low of $8, a drop of over 95%. However, despite the heavy blow, the Solana ecosystem and community have continued to develop positively in the past two years. The ecosystem has over one million users and more than 2,000 developers, with new projects emerging constantly from DeFi to NFT. Jump Crypto's Solana second node validator, Firedancer, has also officially launched on the testnet.

With the price of BTC rebounding, the token price of SOL has skyrocketed by over 200% in just two months. Currently, the premium of Grayscale Solana Trust is about 800%, and the performance of GSOL indicates institutional investors' optimism towards Solana.

The outburst effect caused by Stepn in the last bull market is still vividly remembered. With the negative news being released, the next explosive application in the Solana ecosystem is sure to ignite the market.

Overview

Since early 2023, Solana's total value locked (TVL) has shown significant growth, reaching 650M with an increase of over 200%.

Ian Wu said: "With the recent launch of new assets on the platform, the SOL token plays a core role. SOL is not only the staking coin in the entire ecosystem, but also the margin and underlying asset in trading. It is the key underlying asset (native crypto) for the entire platform."

In addition, as SOL is used to purchase assets such as NFTs and participate in on-chain activities and locking, a large amount of SOL is locked in the market, thereby reducing its circulation. This locking effect of SOL is expected to promote its price increase, forming a positive growth spiral. With the issuance and listing of new assets in the Solana ecosystem, the token lock-up of SOL will gradually increase. This will not only dilute the previously raised profit-taking and selling pressure, but also stimulate more holders to stake SOL tokens due to the positive impact of new assets. Therefore, in the future, the number of SOL tokens staked by Solana nodes and the total locked value (TVL) market value will become an important indicator of analysts and investors' close attention to SOL pricing. "

https://defillama.com/chain/Solana

DeFi Velocity (TVL utilization rate):

·DeFi Velocity, which refers to the trading volume/TVL, is a key indicator for measuring the activity and adoption rate of blockchain, and is more valuable as a reference than simply observing TVL.

·In the past week, Solana's 7d DeFi Velocity ratio reached 3.17. This means that every $1 of liquidity can generate approximately $3.17 of weekly trading volume. Compared to other chains such as Arbitrum, Binance, Base, Optimism, and Ethereum, Solana has exhibited the highest TVL utilization rate in the past 7 days.

Daily Trading Volume:

·Since 2023, the daily trading volume of Solana has shown a stable trend, especially the number of voting transactions has increased.

·The transactions are mainly divided into two types: voting and non-voting. Voting transactions mainly involve the validator's voting account.

Comparison of average daily trading volume in the past six months with other ecosystems.

Despite facing challenges such as network interruptions and FTX/Alameda crashes, Solana continues to operate normally, demonstrating its improvement and adaptability.

Solana's continuously growing TVL, strong DeFi development, and stable trading data collectively demonstrate its potential to become a vibrant economic hub.

Ecological system highlights:

·In September 2023, Visa chose to launch USDC settlement functionality on Solana, which is of significant importance for payment architecture and other application scenarios between public blockchains and financial entities.

·In September of the same year, the founder of MakerDAO considered incorporating Solana SVM into Maker's new local chain as part of its "Endgame" upgrade plan. The plan is expected to last for 2 to 3 years and will be implemented in five phases.

·In August 2023, Solana Pay integrated with Shopify.

Foundation

Personnel Changes

Mad Lads & Backpack

Jupiter

Pyth Network

Jito

The special feature of Jito is that users can earn MEV rewards through it. Jito's staking pool delegates users' SOL to validator nodes that support MEV, and MEV rewards are distributed as additional APY to the equity pool. Anatoly Yakovenko, CEO of Solana Labs, also gave positive feedback on Jito.

Jito Labs has raised a total of $12 million in two rounds of financing. The latest round of financing occurred on August 11, 2022, and was an A-round financing. The lead investors were Multicoin Capital and Framework Ventures.

On November 28th, the Jito Foundation announced the launch of the JTO governance token, which is an important step in the development of the Jito network. The JTO token will give community members the ability to directly influence the decisions and direction of the Jito network.

In terms of governance, the launch of JTO enables token holders to make critical decisions and shape the future of the Jito network, so that it can continue to develop and thrive according to the needs of its service users and the wider Solana ecosystem. These decisions and measures may include:

·Set the fee for JitoSOL's staking pool

·Update delegation strategy by controlling the parameters of the StakeNet project.

·Manage the JTO tokens held by DAO and the fees generated by JitoSOL.

·Contribute to the continuous development and improvement of the Jito protocol and products.

The total airdrop amount is 10%, which is 100 million JTO tokens. Among them, the foundation will distribute 90 million JTO tokens immediately, and another 10 million will be unlocked in the next year. These tokens come from the distribution of 342.857143 million tokens allocated for community growth.

BONK

BONK, as the first meme token in the Solana ecosystem, has recently shown significant performance in the market. It initially gained attention through a large-scale airdrop to the Solana community during Christmas 2022. The purpose of the token is to oppose the "Alameda"-style token economics and restore confidence in the Solana ecosystem and SOL holders after the FTX incident. Now, approaching its one-year anniversary, BONK is active again, not only sparking comparisons with SHIB, but also fueling speculation about its potential listing on mainstream trading platforms.

Binance launched a 1-50x U perpetual contract for BONK on November 22, demonstrating support for this meme coin. BONK is built on the Solana chain and is a new MEME coin for the masses, similar to the well-known Shib. 50% of the total token supply of the project has been airdropped to Solana's Degen and DeFi traders, NFT artists, and developers. This large-scale airdrop distribution has also injected more liquidity into the Solana ecosystem.

The BONK team began planning the project on December 9, 2022, and actively encouraged interaction with other projects in the Solana ecosystem. As Christmas approached, they conducted a large-scale airdrop targeting the Solana ecosystem. With the anniversary of its birth approaching and with Solana rising again, BONK and related ecosystem tokens have also seen valuation corrections. However, despite BONK's explosive growth in the past month, its market value as a meme coin is relatively high, having risen more than 12 times in just one month.

Orca

Orca is an important decentralized exchange (DEX) in the Solana ecosystem, recognized for its user-friendly interface and efficient trading experience. As the only DEX platform on Solana with a pure automated market maker (AMM) function, Orca also has its own liquidity pool, providing a simple and composable trading experience, which is considered an ideal choice for the next generation of DeFi applications.

Orca is described as the most user-friendly DEX on Solana, with pure AMM functionality and a user-friendly trading interface, allowing users to more effectively utilize their capital for asset exchange, liquidity provision, and earning profits. Orca emphasizes providing users with the best trading experience, including minimal transaction fees and low latency, while ensuring fair prices.

In terms of technological innovation, Orca continues to innovate according to its development blueprint. For example, Orca began testing a centralized liquidity active market maker AMM similar to Uniswap V3 called Whirlpools, and officially launched it on April 25, 2021, which is an important step in improving capital efficiency.

In addition, Orca raised $18 million in Series A funding in 2021, led by Polychain, Placeholder, and Three Arrows Capital. Sino Global, Collab+Currency, Coinbase Ventures, and Solana Capital also participated in this round of funding. These funds will be used to enhance Orca as a capital-efficient and user-friendly DEX. This investment will help Orca further develop its platform, ensuring its competitiveness and innovation in the rapidly evolving DeFi space.

As for the token market value, the price of Orca's token (ORCA) is currently $3.27, with a market capitalization of approximately $143.8 million and a fully diluted valuation of approximately $326.8 million. The total locked value (TVL) is $85.12 million, and the circulating supply is approximately 43.99 million ORCA tokens. Orca has become a key player in the Solana ecosystem due to its technological advancement, user experience focus, and strong financial support.

Drift Protocol

As a derivatives exchange on Solana, Drift Protocol has recently surpassed a total trading volume of 1 billion US dollars. At the end of the quarter, its TVL increased to 17.3 million US dollars, an 87% increase year-on-year and a 976% increase since the beginning of the year.

Drift Protocol has become a disruptor in the decentralized derivatives market on Solana. Drift chose Solana for its low latency block time and high bandwidth, which makes it possible to minimize transaction fees and enable fast settlement. In November 2021, Drift launched its V1 version, introducing the concept of Dynamic Automated Market Maker (DAMM), providing guaranteed liquidity and superior trading experience, with a trading volume of nearly 10 billion US dollars within 6 months. The V1 version introduced limit order functionality and Maker Orders, allowing users to become market makers. In December 2022, Drift launched its V2 version, enhancing liquidity through "liquidity tripling" and becoming a decentralized exchange with comprehensive services. V2 introduced robust security measures, achieving a trading volume of over 100 million US dollars and a TVL of 10 million US dollars. As of September 2023, Drift's cumulative trading volume has reached 1 billion US dollars, with a TVL of 19 million US dollars. Drift integrates Pyth's price feed oracle, providing diversified markets such as SOL, BTC, ETH, etc., ensuring data quality and low latency user experience. Pyth's confidence interval function also helps Drift detect market fluctuations and unusual price distributions in a timely manner, protecting users and funds.

On October 26, 2021, the seed round raised $3.8 million in funding, with investment firms including Multicoin Capital, Jump Capital, and Not3Lau Capital.

Zeta Markets

Zeta Markets is a comprehensive cross-margin derivative protocol based on the Solana blockchain. It specializes in providing a variety of trading options, including options trading, regular futures, and perpetual futures starting from November 4, 2022. These services are all integrated on one platform.

As a low-collateral derivative platform, Zeta Markets has a fully on-chain risk engine and central limit order book (CLOB). This makes it a user-friendly platform that provides all the necessary features for traders interested in leveraged trading in a decentralized environment.

On October 27th, Zeta Markets announced the launch of Z-Score (the first step in launching tokens), allowing users to earn Z-Score based on their trading activity on Zeta. Users will receive 1 Z-SCORE point for every $1 traded. In addition, the 24-hour profit and loss ranking will determine the reward multiplier. The first season of Z-Score will continue until December 20th.

Zeta Markets announced in December 2021 that it had completed an $8.5 million financing round led by Jump Capital, with participation from Race Capital, Electric Capital, DACM, Airtree Ventures, Amber Group, Wintermute, Sino Global Capital, Genesis Block Ventures, QCP Capital, Alameda Research, Solana Capital, MGNR, 3kVC, Orthogonal Trading, LedgerPrime, and SkyVision Capital.

Hivemapper

Hivemapper is a blockchain-based map network that launched its global network in 2022. It collects and creates map coverage through specialized dashcams and stores the data on the Solana-based blockchain network. Drivers can now start using Hivemapper's dashcams to contribute to street-level imagery and increase the decentralization of maps for the places they visit, in exchange for the company's cryptocurrency, HONEY, as a reward.

Hivemapper project started in 2015 and recently completed a Series A funding round of $18 million led by Multicoin Capital on April 5, 2022. Hivemapper's native token, HONEY, is used to reward map contributors for providing fresh and updated information, while map consumers obtain API by burning HONEY tokens. The burned tokens will be re-minted, increasing the number of tokens rewarded to contributors. As a token in the Solana ecosystem, the total supply of HONEY is 10 billion, but less than 2 billion have been mined due to the incentive-based mining mechanism. In the future, the project plans to control the release rate of token mining to stabilize and increase the token value.

The initial distribution method of tokens is as follows:

·40% is allocated to contributors as a reward for their participation in building the Hivemapper network.

·20% is allocated to investors to provide initial capital for the Hivemapper network launch.

·20% is allocated to the employees of Hivemapper Inc. for building the technology and operating system required to run the Hivemapper network.

NFT

For example, the cost of minting 1 million NFTs on Solana, before and after state compression, is $253,000 and $113, respectively. On Ethereum and Polygon, the cost of minting the same number of NFTs is $33.6 million and $32.8 million, respectively.

·DRiP: In the third quarter, DRiP occupied the majority of the cNFT market share (87.5%). DRiP collaborated with artists to mint a large number of free NFT artworks. In mid-August, DRiP announced the completion of a $3 million seed round of financing led by Placeholder.

·Dialect: A Web3 messaging application that utilizes cNFTs. In early September, it launched its web application and became one of the largest NFT collections on the blockchain.

Other Projects::

·Crossmint: Infrastructure that provides developers with the ability to build NFT applications.

Before leaving Solana, major projects such as DeGods and y00ts, Magic Eden chose to support multiple chains, including Ethereum and Bitcoin. Despite the setback, Solana's NFT ecosystem is recovering and showing new vitality.

Tensor Platform

Tensor is a professional Solana-based NFT trading platform that offers fast data processing, batch operations, and advanced order types. Recent data from the past month shows that Tensor has surpassed the veteran Magic Eden and become the leader in the Solana NFT market.

Data source: The Block

Solana Monkey Business (SMB)

LSD

Comparing Ethereum and Solana:

Currently, there are 295.7M SOL staked on the network, but the use of liquid staking derivatives is not yet widespread.

The recently launched Jito staking service has accumulated a total value locked (TVL) of over $44.86M (2.3M SOL) since its launch at the end of November last year. The growth in cross-chain staking derivatives (LSD) and DeFi use cases has also been significant.

Marinade Finance

As the project with the highest TVL in the Solana ecosystem, Marinade Finance is a liquidity staking platform that focuses on simplifying the staking process on Solana. Its main feature is providing "liquidity staking", which allows users to convert staked assets into liquidity at any time without waiting for the unlocking period.

In mid-September, Marinade launched a reward program in an attempt to catch up with the growth of the new protocol. Despite a slight decline in Marinade's TVL on SOL throughout the quarter, there was a rebound after September 20th. In addition, Marinade Native, launched at the end of July, is a local staking product designed to supplement Marinade's liquidity staking service. It is an automated staking platform that allocates staking to over 100 excellent validators, with no performance fees and no smart contract risk.

Marinade has recently launched the Marinade Native program, which allows users to seamlessly delegate staking rights while retaining withdrawal rights. In addition, Marinade has announced the Marinade Earn reward program, which will run from October 1, 2023 to January 1, 2024. Participants during this period will receive a reward of 1 MNDE/SOL. There is also a referral system where referrers can earn an additional 1 MNDE/SOL through a unique link.

Marinade, as an old DeFi protocol launched in 2021, once had a TVL of over $1.5 billion at its peak. Although it has declined compared to its peak, it is still the top TVL project in the Solana ecosystem. Its token, mSOL, has good liquidity and has been listed on mainstream trading platforms such as Coinbase and Kraken.

BlazeStake

BlazeStake is a new mobile staking protocol launched in 2023, aimed at promoting the decentralization of Solana nodes. Stakers can choose to stake SOL in a standard delegation pool or with any validator, while receiving bSOL's mobile staking rewards.

Blaze has been hinting at airdrops for bSOL holders since last year. In August of this year, it launched a point system and its own token, BLZE, for airdrops based on user points. Blaze's SOL lock-up value increased by 1,234% compared to the previous quarter, reaching 678,560 SOL (valued at $40 million as of November 30, 2023).

DeFi

Recently, some emerging Solana DeFi protocols have shown significant growth in the past few quarters, and they define themselves as "Solana DeFi 2.0". This term represents a commitment to avoiding the predatory and low-circulating token economic models that were common in the previous cycle. Most of these protocols have not yet launched their own native tokens.

MarginFi

Cypher

Solend

In early August, Solend lending platform launched a points program. Unlike potential airdrops using points, Solend combines points with its issued SLND tokens. The first season of the points program lasts for about three months, with a minimum reward pool of 100,000 SLND tokens (valued at $54,000). With the promotion of the points program, Solend's TVL increased by 43% year-on-year, reaching $57 million.

Raydium

Raydium, once the first AMM-style decentralized trading platform in the Solana ecosystem, was one of the core projects of Solana Summer. However, with the bankruptcy of FTX and the threat to the Serum protocol, which shares liquidity with Raydium, as well as attacks on Raydium's own liquidity pool, Raydium has suffered heavy losses and its recovery is slightly inferior to Orca.

Phoenix

Phoenix is a decentralized limit order book on Solana that supports spot markets. Recently, it completed a $3.3 million financing round. Prior to its official launch at the end of August, Phoenix underwent testing. Since its launch, Phoenix has performed well in certain trading pairs, with TVL reaching $378,000 at the end of the quarter.

Squads Protocol

Squads Protocol is a newly launched comprehensive multi-signature platform that has protected $6 million in assets and a total trading volume of $9.5 million.

Kamino Finance

Kamino Finance is an automated liquidity solution that earns profits through market making. In the third quarter, Kamino's trading volume exceeded $1 billion, creating $1.25 million in revenue for depositors.

DePIN

DePIN, which stands for Decentralized Physical Infrastructure Network, is leveraging Solana's efficient technology to cover multiple fields including map-making, energy, logistics, and more, providing opportunities similar to the modern gig economy. According to Kuleen Nimkar, the head of DePIN at Solana Foundation, people can earn extra income by contributing hardware to the DePIN protocol.

Helium

Helium Network leverages Solana's state compression technology to mint network hotspots in the form of NFTs, thereby reducing costs. Helium is a typical case of DePIN business, and collaborates with Hivemapper to use the Helium network to verify the location of drivers.

After the implementation of HIP-52, the deployment of hotspots on the network will no longer receive HNT rewards, but instead will be rewarded with tokens through two protocols: IOT and MOBILE, which are used for the Helium IoT and Mobile networks respectively. The multi-token model allows each wireless network to be independently governed, making it easier for DAO to make better decisions. Each sub-network manages its own Proof-of-Coverage rules, data pricing, and hotspot mining reward allocation mechanism.

After deploying or covering the network, the IOT and MOBILE network tokens obtained can be exchanged for HNT, providing a value basis for the network tokens. Currently, Helium has a market value of approximately $420 million and is the largest DePIN project in the Solana ecosystem.

Teleport

With the emergence of decentralized maps, decentralized ride-sharing applications such as Teleport have emerged and are currently available on the Apple Store. Teleport is a ride-sharing application that is owned and managed by drivers, passengers, and developers without the need for permission. On October 27, 2022, Teleport completed a $9 million seed round of financing, led by Foundation Capital and Road Capital.

Founder Paul Bohm pointed out that existing carpooling giants such as Uber dominate the sharing economy industry. To address this issue, Teleport has built the TRIP protocol for shared travel, aiming to benefit drivers, passengers, and the local economy while achieving autonomy. This protocol will first be applied on the Teleport platform, and participants who operate and develop the network will receive TRIP rewards, some of which may appear in the form of NFTs. TRIP rewards also represent participation and voting rights in the network. Currently, the project has not released tokens, and the official website and Twitter will provide the latest information.

Tekkon

Render Network

In the long run, with a focus on the Asia-Pacific market and global expansion plans, Solana may become the world's leading public chain ecosystem, attracting more international users and developers. Solana's technological innovations, such as high TPS and low latency, will enable it to take a leading position in high-performance blockchain applications, such as large-scale games and complex DeFi applications. With the success of the DePIN project, it may lead a new trend in blockchain applications, integrating blockchain technology with various scenarios in the physical world, bringing innovation to traditional industries.

Original Link

This article is from a submission and does not represent the views of BlockBeats.

欢迎加入律动 BlockBeats 官方社群：

Telegram 订阅群：https://t.me/theblockbeats

Telegram 交流群：https://t.me/BlockBeats_App

Twitter 官方账号：https://twitter.com/BlockBeatsAsia