- Solana has surged on the charts over the last 12 months
- Exec pointed to token extensions as the network’s USP
Emerging from a bearish market that cast doubts on its viability, Solana (SOL) defied skeptics by becoming one of 2023’s standout performers. Asher Tan, CEO of CoinJar, pointed this out in a conversation with Forbes Advisor. He said,
“A 300% rise in the last 12 months has seen Solana firmly entrench itself as a top five coin by market cap.”
However, SOL has had a rocky start to 2024. Ergo, the question: Is it wise to be bullish on Solana in 2024? Austin Federa, Head of Strategy at the Solana Foundation, detailed why in a recent interview with Scott Melker.
Recent developments on Solana
Federa highlighted that the most active category within the Solana space has been decentralized physical infrastructure networks (DePIN). He spotlighted 2023’s major migrations like Helium and Render.
Moreover, the exec touched upon decentralized finance (DeFi) 2.0 innovations, mentioning projects like Jupiter aggregator and Credix. However, the thing that makes Solana stand out, as per Federa, is token extensions. He explained,
“The Solana community has borrowed a ton of great ideas from the Ethereum community and the Cosmos Community. The idea of token extensions… is something that we see brought to many networks, and that can sort of become an idea for how the stuff can be done more broadly.”
Network outages
Since 2021, Solana has faced many network outages that have become a focal point of concern within the cryptocurrency community. It has sparked debates about the network’s reliability and potential centralization issues. Paul Brody, EY global blockchain leader, addressed the latest 6th February outage and said,
“People want to have ETH killer—it’s a fun narrative…but I think (the outage) does raise doubts.”
Federa acknowledged the need for absolute reliability too, stating that minimizing downtime is a top priority for the engineering team, with aspirations to reduce recovery time significantly. He suggested that while zero downtime is the ultimate goal, achieving it without compromising the network’s evolution and utility presents a complex challenge. The exec remarked,
“A blockchain that never goes down that no one can use is not a useful system. A blockchain that goes down too often is also not a useful system.”
Future of Solana
According to the exec, Firedancer is probably the most important long-term technology that will be deployed on the mainnet this year. This development is expected to make Solana one of the few smart contract platforms, alongside Ethereum (ETH), to support multiple independent validator clients.
Federa also discussed the potential for Layer-2 solutions. He suggested that while the aim is to minimize their necessity by maximizing Layer 1’s throughput, future scalability may require some degree of layering. Additionally, he touched upon the development of Teleport, an open ride-sharing protocol that represents a move towards interoperable applications within the Solana ecosystem.
