What happens to Solana now?


SBF’s Tweet

While this close relationship benefited Solana and its ecosystem greatly during the 2021 run up, the FTX implosion and subsequent bankruptcy have since been detrimental, leading to a ~58% in the price of SOL..


..and a ~70% drop in Total Locked Value (USD) since Solana breakpoint.


The knock on effects on on-chain user activity can also be felt. Active accounts in the last 30 days are only at 7.15m on Solana, with BNB Chain (17.9m), Polygon (13.7m) and Ethereum (9.94m) all leading on this metric.

However, there is a silver lining amidst this chaos. Despite the FTX implosion, the Solana developer community signalled their commitment to building on Solana.

According to a recent survey, ~73% of developers do not feel the need to leave Solana and ~67% of developers are choosing to deploy only on Solana. This can be interpreted as the remaining group of developers remains optimistic over the future of Solana, enough to remain committed to continue their development here.

In the sections below, we take a look at the fundamentals of Solana the blockchain, before offering our views on how Solana can flip the script on the existing public perceptions, to eventually emerge from the ashes.

Is it time to be bullish or bearish on the future of Solana?

Tweet from SOLBigBrain

Borrowing a tweet from one of Solana’s earliest supporters in SOLBigBrain, we need to reassess the fundamentals of Solana in order to to take an unemotional view on its future.

The network has come leaps and bounds on user, developer and chain activity since its inception, with NFTs being highly popular.

While user numbers, developer count and on-chain metrics have all been affected negatively by FTX, it is important to recognise the progress Solana has made since its inception. This thread by Solana covers the statistics comprehensively, and we are highlighting a few of those that we find interesting:

  • There are over 11.5m active accounts on Solana with 1.7m active fee payers as of October 2022. Peak of 22.4m and 2.7m respectively
  • Open source repos and developer activity have been rising exponentially. There are 20,717 repos and 1,114 programs as of November 2022, a ~7.6x and ~8.3x respectively since August 2021.
  • DAO tooling and adoption have also taken off. There is approximately 15m SOL managed across 1,700 DAOs, a ~43.3x and ~1,700x respectively since August 2021.
  • NFTs have been a breakout use case on Solana, onboarding hundreds of new users to the network. There have been over 21.9m NFTs minted across 7.2m wallets, with primary sales at $1.1b and secondary sales at $2.5b.

The common critique around network instability issues have also been addressed..

Solana has been plagued with network instability since the start of 2022, which has been the major criticism levelled against it. We explored the long term viability of Solana earlier in July, and the potential fixes that were planned for the stability of the Solana network.

A quick recap on the fixes that have since gone live:

  1. QUIC, a protocol built by Google, enables better traffic control for validators over transaction flows
  2. Stake Weighted Quality of Service ensures that any validator with X% of stake will be able to forward at least X% of transaction packets to the leader
  3. Priority Fees allow users to express urgency in their transactions by specifying an additional fee, payable upon execution of the transaction and block inclusion

All three fixes work in tandem to reduce spam and increase stability of the network. QUIC allows validators to cap the amount of traffic they receive so they can build blocks more efficiently, while stake weighted QoS ensures no one validator can crowd out everyone else. With these improvements, there is less incentive to spam the leader and users that want to land their transaction first should utilise the priority fee feature to ensure faster block inclusion.

These optimisations have resulted in better network stability, with the network holding up despite extreme volatility during the FTX implosion.

Tweet from mattytay

.. And the network is about to get faster and more reliable.

With Jump working on an independent validator client, Firedancer, Solana will be pushing the boundaries on blockchain throughput. Free from any technical debt, Jump will be built layer by layer, following the data path from packet ingress, runtime, and consensus to optimise Solana to go faster. It was announced during Solana Breakpoint 2022 that Firedancer has the potential for 1.2m TPS under test conditions, pushing Solana closer towards the vision of becoming the global state machine capable of handling transactions at the speed of light.

Firedancer will also be developed in C/C++, reducing shared dependencies with the existing validator client, thereby improving reliability of the network. It should also reduce hardware requirements while making it cheaper and easier to run your own node with performance improvements.

Blockchain infrastructure, developer tooling and programmability are also constantly improving to help developers build on Solana..

Google Cloud

Google Cloud will also begin to index Solana’s historical data and enable BigQuery by Q1 2023 for the developer ecosystem on Solana to access historical data. This is a huge boost for developers working with Solana data, given the high costs required with maintaining an archival node and complexity associated with interpreting on-chain data. Google Cloud will also be able to accept all payments for their services in USDC which is particularly useful for projects that receive their revenue in cryptocurrencies.

Account Compression

Going forward, account compression will go beyond NFTs and into social media applications, gaming, ticketing, metaverses, enterprise use cases etc, and it will be interesting to see where use cases developers will bring to the table.


Token 2022

  • Confidential transactions, which enable more privacy for users by masking the amounts that are being transferred, it is important to note that transaction parties still can be seen on-chain
  • Interest bearing/rebasing tokens, that can provide more functionality for applications such as stake pools and lending protocols
  • Memo requirement for transactions, where client-facing applications that deal with consumer payments only accept transactions that specify a memo which can then help with easier categorisation of payment types
  • CPI guard extension, that forces dApp transfers to go through a delegate, which means that users are only assigning a specific amount or type of token that can be used by the program. This will reduce instances of wallet drains when interacting with “sketchy dApps”

Read on here for a multitude of extensions and implementation resources that are available.

.. which has made Solana an innovation hotbed for a wide variety of applications, capable of mass market adoption.

While there are many applications being built on Solana right now, we would like to highlight the following projects across different verticals that share the same potential to onboard the next wave of non-crypto native users.




Through Saga and the Mobile dApp store, Solana is attempting to demonstrate what Web3 can mean for Mobile.

Mobile phones are personal objects that we keep close to us regardless whether it is in use. The mobile experience is synonymous with the daily lives of billions of users and Saga is an attempt to demonstrate what Web3 stands to gain by going mobile. Saga will provide the typical mobile phone experience everyone is used to, and the ability to have asynchronous notifications that inform you whether it is the time to mint or when someone requests a payment from you. Saga can also become the digital gateway where users can tap to pay using Solana Pay, store their seeds using biometric verification, play their crypto games on the go, thereby integrating seamlessly with our routines.

The key features of the Saga phone are the Seed Vault and the Solana dApp store. Seed vault is a key custody deeply integrated within the software and hardware stack of the mobile phone, and it keeps the private keys secure at all times. It is a trusted user interface where the Android OS has no visibility over the password you type for your seed phrase, nor is that the possibility of being able to screenshot or keylog. This enables users to sign transactions freely on the go with the knowledge that their keys are secured. The Solana dApp store will be a fee-less application hub with crypto friendly policies for DeFi, gaming, wallets and NFT applications. This should enable developers to focus on building products that can access billions of users, all while on the go. Submissions to the Solana dApp store will open in January 2023 and we look forward to the innovative applications that will be built.

We see this as the right path in adopting the next wave of users onto the Solana blockchain. While most other blockchains are solely focusing on improvements to the underlying blockchain technology, Solana has continued to tackle the issue of user experience concurrently.

The community driven efforts such as Solana Spaces, SuperteamDAO and Metacamp are highly understated yet impressive, and have helped onboard countless of aspiring developers and new users to the network

Solana Spaces is a retail space that allows people to learn and experience Solana in real life. Retailers get set up with Phantom in store and learn about self custody, who can then begin scanning QR codes to complete tutorials such as DeFi with Orca, Gaming with Aurory, NFTs with JustApe, 1/1 Art with Formfunction etc. These experiences happen within the Phantom wallet and they get rewarded NFTs after each successful completion, forming a deeper relationship with the end user. Since their launch 3 months ago, they have hosted over 30,000 customers and completed over 10,000 tutorials across their two physical stores in New York and Miami. They are now extending this initiative via SpacesDAO, to anyone interested to run their own Solana store. It is an open source retailer model, where all the IP ever designed or built, from architectural plans, to fixture drawings, software, merchandise, will be available for anyone looking to set up their own store. Interested parties can join via GeoNFTs that represent store coordinates on-chain, and gives the holder the right to redeem it for a contract with the DAO that conveys real-world legal protection and territorial exclusivity To kickstart this initiative, SpacesDAO and Solana Foundation can make loans or grants up to $50,000 available to owners looking to set up a new store.

SuperteamDAO is a community-led, grassroots level resource hub for aspiring developers looking to build on the Solana ecosystem. There are now four local superteams in India, Germany, Turkey and Vietnam, organised around the three pillars of Learn, Earn and Build. Aspiring developers will be able to learn more about Solana Core, find earning opportunities via project bounties, source for inspirations on what to build through an idea repository and also apply for equity-free grants within 48 hours.

Metacamp is an NFT-gated co-working space in Singapore that brings together investors, startups, and talent across the Web3 industry within the South East Asia region. The Solana-focused firm offers educational programs, community events, and corporate workshops, with the aim of further upskilling professionals in the Web3 space.

Overall, we believe there are reasons to believe that the future remains bright. Solana today has already made tremendous network improvements, and possesses the right infrastructure and tooling for developers to innovate on new applications that have the potential to onboard the next billion users. Saga will further extend the possibilities for developers who can access a new group of users that have otherwise been untapped within Web3.

How Solana can flip the script on its negative public perception

While fundamentally sound, the narratives and public perception around Solana remain negative and pessimistic. Below are a few issues that we think can be resolved, to shift the focus back to the resilient community and technological advancements that have been made.

Unwind the FTX/Alameda relationship

Based on the latest report, Solana Foundation had $1M in cash exposure to FTX, amounting to less than 1% of its funds, and no assets custodied by FTX. Solana Foundation also holds approximately 3.24 million shares of FTX Trading equity, along with about 3.43 million FTT tokens and 134.54 million SRM tokens, most of which have lost a large portion of their value. Solana Labs on the other hand had no exposure to FTX.

On Alameda’s holdings of SOL, none of their SOL holdings are circulating, with the earliest unlocks in 2025, and spans all the way through 2028. Alameda currently holds 48.6M SOL, 65% of all locked stake, all of which is currently locked in staking. Moreover, even when the staked tokens start to unlock, it is likely that Alameda would have no access to it given the nature of their Chapter 11 bankruptcy proceedings which could take years to complete.

Solana Compass

While these tokens would eventually find their way into the circulating supply, our view is that Solana would have built a new thriving ecosystem through its resilient developer community which then drives high user activity that translates to demand for tokens. There is also a high probability that as Alameda goes into liquidation process, their Solana holdings will be more evenly distributed between various investors and creditors.

Address the decentralisation & censorship resistance concerns

The public perception remains that Solana is a centralised chain. Anatoly once described decentralisation as the number of independent replicas of the state history that is available. Following this chain of thought, Bitcoin has over 15,000 full nodes today, while Ethereum and Solana have ~8,000 and ~3,000 full copies of state respectively. This puts Solana as the third most decentralised chain by this definition.

It is also noteworthy that Solana has also achieved impressive diversification across its ~2,000 consensus participating validators, with stake spread across 230 unique data centers and no more than 9% of stake in any of these data centers. With a Nakamoto Coefficient of 31, Solana is also ahead of the next two chains in AVAX and Thorchain at 29 and 28 respectively.

Going forward, Solana has started working on Diet (light) clients to reduce the cost of verification. By doing so, it will improve trust minimisation assumptions over the majority of consensus participating validators. Solana can then adopt similar user activated soft forks as proposed by Ethereum should the majority cannot be trusted. If interested in censorship resistance within POS networks, we covered that extensively here.

Address the “business development” concerns

It is often heard that Solana has “great tech” but the business development is lacking when compared to what Polygon has achieved. Head of Business Development, Ben Sparango, recently mentioned on a podcast that while pursuing existing Web2/Fortune 500 companies remains an option they are open to, they are not keen on one-off arrangements where these companies are fulfilling a mandate and hence do not contribute towards increased usage or activity on the blockchain. A successful example would be the recent ASICS-StepN + Solana partnership, where ASICS did a Solana Pay integration, sold 3,000 units and generated 600,000 revenue in USDC with no credit card fees. The associated NFT that came with each sale then went on to do a further ~1,000 SOL on the secondary markets.

Instead, the Foundation’s priority is to get in more developers at the grassroots level to build more unique applications that leverage on the technical advantages of Solana. These applications that achieve product market fit will then naturally become the “business development” for Solana, to onboard the next wave of users. The case in point was demonstrated when Stripe announced their project to facilitate fiat-to-crypto payments, and 11 of the 16 pilot applications were from Solana (Magic Eden, Audius, Orca etc.).


To wrap up the above discussion, Solana’s synonymous relationship with FTX and Alameda has been a rollercoaster ride of ups and downs. While the future of Solana might seem bleak right now, we continue to see a resilient community and highly performant, scalable blockchain if we peel behind the layers. Solana is innovating on many fronts, being the choice for potential mass market consumer applications such as Dialect, Helium, Teleport, and is enabling a whole new customer segment in Mobile through its flagship Saga phone.

We take the view that Solana can emerge from this setback, change the negative public perceptions around the FTX/Alameda relationship, lack of decentralisation and “incompetent” business development, and eventually pave the way for new and innovative applications that can onboard the next billion users.

If you are building on Solana, we will be keen to get connected and support you in any way we can.

Written By Henry Ang, Mustafa Yilham, Allen Zhao & Jermaine Wong



Established in 2017, focusing on venture capital in the area of blockchain https://bixinvc.com/

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