Thor Hartvigsen, a DeFi researcher and Business Development skilled at Redacted Cartel, shared an in depth evaluation into the potential of Solana to realize mass adoption today. Hartvigsen’s examination focuses on the technical points and key developments (other than price speculation) throughout the SOL ecosystem which may pave the best way for its widespread acceptance.
Parallel Execution, Solang, Eclipse And Neon
A major feature of Solana is its ability to process multiple transactions concurrently through ‘parallel execution’. This method stands in contrast to the sequential processing present in many other blockchains like Ethereum.
Hartvigsen notes, “This parallelism in processing ensures that activities like large NFT mints, which could spike transaction fees, don’t adversely affect the price of transactions for DeFi users, as these are handled in separate threads.”
Solang, a compiler on Solana, is one other crucial element to succeed in mass adoption. It enables developers to construct decentralized applications (dApps) using Solidity, which is usually used for Ethereum Virtual Machines (EVMs). This compatibility potentially eases the transition for developers from EVMs to the Solana Virtual Machine (SVM).
Eclipse, a layer-2 rollup slated for release on Ethereum later this 12 months, can also be poised to change into a serious constructing block for mass adoption. It goals to bring Solana’s high throughput to the Ethereum ecosystem by leveraging the SVM for execution.
Hartvigsen explains, “Eclipse integrates Ethereum mainnet for settlement, Celestia for data availability, and Risc Zero for validity proofs, creating a sturdy cross-chain solution.”
The NeonVM, a virtual machine native to Solana, integrates the EVM with SOL’s framework and might be a serious weapon in its competition with Ethereum. This integration allows developers to deploy Ethereum dApps on Solana, benefiting from lower gas fees and faster transaction processing.
Solana’s DeFi Ecosystem
The Solana DeFi ecosystem has shown notable growth in recent months, particularly in areas like lending, DEX volumes, and liquid staking. As Ethereum’s growth story has shown, DeFi could change into a vital pillar for the adoption of SOL.
Hartvigsen highlights several key protocols. Amongst them is Jito, Solana’s largest Liquid Staking Derivative (LSD) protocol. It offers a stable yield (~6.88%) on SOL tokens, derived from staking and maximal extractable value (MEV) rewards. The recent announcement concerning the launch of their governance token JTO is a major development, based on the researcher.
Furthermore, Hartvigsen mentions Jupiter, a DEX aggregator which handles many of the swap volume on Solana ($3.9 billion previously 30 days). They’ve also launched a beta version of their perpetual futures product, offering as much as 100x leverage on cryptocurrencies like BTC, ETH, and SOL.
Lastly, the researcher highlight Marginfi, often called the most important lending market. Marginfi was one among the primary to implement a ‘points system’. This technique allows liquidity providers to earn points, which later translate right into a token airdrop. The Total Value Locked (TVL) in marginfi has tripled previously month, reaching $150 million.
While Hartvigsen himself doesn’t draw a conclusion, his evaluation shows that the Solana ecosystem is amazingly well positioned to proceed to grow and compete with Ethereum.
At press time, SOL traded at $60.81. In recent weeks, the SOL price found support on the 100-week EMA and is eyeing a weekly close above the 0.236 Fibonacci retracement level at $60.00.
Featured image from Shutterstock, chart from TradingView.com