If you have an iPhone and happen to be a fan or active participant
of Solana’s systems and apps, you may feel a sense of deja vu when
you use them separately at many moments. Do Solana and iOS have a
lot in common? It just seems like a hunch. However, after analyzing
and comparing the two carefully from the historical and current
perspectives, I got an astonishing finding: the previous intuition
may be incredibly close to some type of truth. Moreover, a bold
prediction came to my mind: one day in the future, Solana may
become the iOS in the encrypted world. In my view, although iOS and
Solana belong to the Internet and encrypted worlds, respectively,
they share the same logic of the first principle that supports
their development.(The following conclusions were jointly organized
by CGV FOF research team.) Firstly, the ultimate user experience.
User experience, as the core competitiveness of a product, has been
mentioned repeatedly. Due to Apple’s relentless efforts for the
ultimate user experience, iOS seems to be always smoother than
Android. Virtual keyboard was not created by iPhone. Microsoft,
Palm, and other smartphone manufacturers have tried to promote
smartphones with the full touch screen, but iPhone overcame the
technical difficulties in capacitive touch screen, multi-touch,
improving the screen touch experience to an untouchable level. For
instance, iOS gives first priority for screen response, and it
responds to Touch—Media—Service—Core architecture in order. Simply
put, when the user touches the screen, the system will first handle
the screen display (Touch); while the priority response level of
Android is Application—Framework—Library—Kernel architecture, and
display-related graphics and image processing (Library) are only in
the third level. There are a host of similar factors, which
directly cause a huge difference in user experience between iOS and
Android. Similarly, although Solana is not the first underlying
public chain, it has attracted an increasing number of crypto
developers and users by providing extremely high TPS and low
transaction fees, breaking through the biggest development
constraint that most public chains face in the same period.
Performance comparison between Solana and other mainstream public
chains Data source: RareLiquid For instance, Solana can deal with
over 50,000 transactions per second while maintaining a block time
of 400 milliseconds, and improve the TPS based on Moore’s Law, thus
providing a good “predictability” of TPS scaling. Additionally,
Solana’s low transaction fees are impressive, that is, estimated
$10 for 1 million transactions. Among them, Solana’s core consensus
mechanism is “Proof of History (PoH)”, which aims to solve the time
problem in a distributed network that lacks a single reliable time
source. By using a verifiable delay function, PoH allows each node
to generate timestamps locally via SHA256 calculations, which
improves overall network efficiency by eliminating the need to
broadcast timestamps across the time network. The user experience
of public chains can be reflected by the number of crypto wallets
and the frequency of use. Take Phantom, one of the most popular
wallets on Solana, as an example, it almost integrates all the
features of the Solana ecosystem, including token swaps, collection
of NFTs and collectibles, connection to hardware wallets,
anti-monitoring, Web3.0 support, and the obtainment of incomes
through pledging SOL. Solana Phantom & Ethereum Metamask
monthly active users Data source: Grayscale Building Blocks Relying
on the excellent one-stop experience, Phantom has become the
preferred wallet for the users of Solana, with the monthly active
users exceeding 1.2 million. During the two months from August to
October 2021, the users of Solana on Phantom increased by 5 times.
Secondly, excellent UI design. The user interface (UI), as a
human-computer interaction window for offering various functions
required by users, determines whether the software or product is
intuitive for users to operate. iOS has a tight system for platform
UI design specifications. From buttons to icon styles, and from
image size to resolution, they all require special customization.
In this way, it not only unifies the styles of various programs but
also helps users to get accustomed to the way of using iOS
software. Nowadays, the rounded rectangular design, with only one
button on the front and the rest completely covered by a glass
panel, has become the iconic design of the iPhone. The project team
should pay attention to UI design whether in the field of Internet,
blockchain, or encryption. Besides, a “user-oriented” UI design
will make the product more popular and sell better. Dr. Nielsen, an
expert in human-computer interaction, claimed that usability is a
prerequisite for survival in the field of the Internet. If a
website is difficult to use, then users will immediately abandon
it. Some people say that when they buy tokens, they only look at
the logo of the project. Though just a joke, it illustrates the
importance of the visual design of the project. The logo of Solana
reveals that its team that pays attention to details and has good
aesthetic skills. The logo color of Solana is a gradient from green
to purple. Similar colors can be found in nature, such as the
aurora borealis, mysterious and elegant. In addition, many
cyberpunk-themed sci-fi movies often use purple, green, and blue in
their images, reflecting the prospects of Solana’s innovative
blockchain technology development. Solana ecosystem (DeFi fields)
Data source: Solanians Many Solana projects, at first glance, seem
to be designed by the same designer, with a very consistent
experience in terms of color matching, interface design, and
interaction design. The interface is intuitive, concise, and easy
to operate. Users can easily operate Solana without much training,
as they can understand the functions on the interface at a glance
after using the software. According to CGV FOF, On a well-known
Solana IDO platform, the UI performance of a project is given a
high assessment priority when reviewing the project. It seems that
Solana improves users’ acceptance of Solana from the top down
through its incubation and support of projects with outstanding UI.
Thirdly, strong ecological support. Based on the second law of
thermodynamics, isolated systems have no energy exchange with the
environment and always change spontaneously in the direction of
increasing disorder (entropy), i.e., the principle of increase of
entropy. In view of this phenomenon, Prigogine, winner of The Nobel
Prize in chemistry, proposed that the system must be open to
transferring from a disordered state to an ordered structure, that
is, the system must exchange matter and energy with the outside
world. The opening of the business ecosystem requires core
companies to enable partners to have access to their resources and
capabilities, attract them to join the ecosystem, and achieve value
co-creation through mutual empowerment. Since its inception, Apple
has attached great importance to external empowerment, providing
external developers with powerful development kits and allowing
them to connect users through the app store, thus giving birth to a
large number of popular apps such as Instagram, Snapchat, Uber, and
WhatsApp. Compared with other platforms, Apple’s release mechanism
for developers’ apps is fairer and more reasonable. The download
ranking data on the software store is true and reliable, which has
created a good competition system and environment for developers,
making developers grasp an accurate understanding of what their
users really want. Solana has also devoted a great deal of effort
to ecological construction. Solana has a long-term funding plan to
provide excellent projects with a full range of resource support,
including targeted funding, VC referrals, technical support,
recruitment support, marketing, and legal resources. Development of
Solana and other mainstream public chains for active developers
Data source: Santiment Take the hackathon for example. In 2021,
Solana officially held three global hackathons. The most recent
hackathon, with a prize pool of $1 million, over 15,000
registrants, and more than 300 projects submitted by developers
across the world, attracted the attention and support of a host of
developers and generated a series of quality Solana native apps.
Furthermore, it is worth noting that 90-95% of the hackathon
developers expressed their willingness to carry out long-term
development on Solana. These talented developers will constantly
power the Solana ecosystem. Fourthly, a charming soul figure. It
may be a bit radical to say that Steve Jobs, the founder of Apple,
changed the world, but it is fair to say that he was synonymous
with the “spirit of innovation” pursued by the United States and
all mankind. Jobs was a giant standing at the intersection of
technology and humanities. His combination of idealism and
perfectionism enabled Apple to take a completely different route
from the traditional industry. Take simplicity as an example, Steve
Jobs’ love of minimalism and his exposure to Buddhism, “let people
directly know their heart without words”, exerted a great impact on
Apple’s “no button” design. In addition to pursuing minimalism in
product design, Jobs took the initiative to eliminate many product
lines and only launched 1-2 products each year, with the best
quality. In my opinion, Jobs was to Apple what Sam Bankman-Fried
(SBF) is to Solana. I don’t mean to deny Solana’s incredible team,
which is just as respected as Apple’s tens of thousands of talented
engineers and development teams. SBF was placed on Forbes’s list of
the richest people in the world 2021 Data source: Forbes Initially,
SBF was a trader and spent his early days at Jane Street, a
quantitative giant. He founded Alameda Research (a quantitative
trading firm) and FTX (a centralized cryptocurrency exchange) with
a team consisting of finance personnel—quantitative analysts,
engineers, high-frequency traders. They are seldom concerned with
the centralization/decentralization debate and focus on the
“large-scale expansion of the blockchain”. After leaving Jane
Street in 2017, SBF took time to think about potential
opportunities. He realized that “Cryptocurrency has many
characteristics, it may be a very inefficient system, and there is
a great demand for liquidity. This is basically: sudden huge
demand, very rapid growth.” So, SBF tried to figure out the
ultimate solution to these issues. Later, he discovered Solana.
Anatoly Yakovenko, a co-founder of Solana, once described the scene
of SBF’s first contact with Solana before it was launched on the
mainnet in 2019: During the test, 80 transactions were processed in
an average of 4.02 seconds. This result impressed SBF. After
communicating with the team and realizing Solana’s huge development
potential, SBF immediately decided to establish Serum (a
decentralized derivatives exchange) based on the Solana. In this
way, Solana not only won a new application project but also got a
perfect encryption spokesperson (just like NBA got James). From
that day onwards, Solana was reinvented by SBF. In January 2021,
SBF said on Twitter that, “I’ll buy as much SOL as you have, right
now, at $3. Sell me all you want.” Though a joke, it revealed that
SBF had high hopes for SOL. Fifthly, a passionate fan base. I still
remember that in those days, iPhone fans lined up in front of the
store all night to buy a new generation of iPhone, hoping to be
among the first to own the new iPhone, just as they wished to get
tickets to a superstar concert. The iPhone launched by Apple every
year is not only a new product but also a brand-new cultural
phenomenon. This is a market effect that no other company is likely
to have when launching a new product. Taking the number of Twitter
followers as an example, according to statistics from CGV FOF,
Solana has as many as 1.1 million followers, which is not as many
as that of Ethereum (1.97 million) but ranks first among other
mainstream public chains, Polkadot (1.01 million), Avalanche
(450,000), Fantom (270,000), and Near (230,000). Let’s take a look
at the fan token, Solana’s meme coin is Samoyedcoin ($SAMO). It was
inspired by Dogecoin, Sam Bankman-Fried (containing the letters S,
A, and M), and Solana’s co-founder Anatoly Yakovenko (whose
hometown is the birthplace of the Samoyed dog). Nowadays, SAMO has
become the mascot and promotion ambassador of the Solana ecosystem,
and the peak circulation market value of SAMO’s token exceeded $700
million. In the Solana community, you can often feel a completely
different atmosphere from any other public chain community. We
often see the “fierce quarrel” between ETH diehards and Solana
diehards. It is completely different from the peaceful and joyful
atmosphere of the Near, Avalanche, and Fantom communities. This may
be the price Solana pays for choosing to take a different path from
the ETH (EVM). It may be a stretch to draw an analogy between
Solana and iOS from the above dimensions. Some people are still
criticizing the recent instability of the Solana network. But in
the long run, through network upgrade, expansion of service nodes,
and adjustment of incentive mechanism, these issues will become an
episode in the development process of Solana. In fact, Apple’s rise
did not happen overnight but was accompanied by several important
turning points that established Apple’s status as king. For
example, iPhone 4 was an epoch-making product that made
breakthroughs in hardware, software, and design. It was the first
cellphone that used the commercial retina screen, completed the
dual evolution of cellphone camera hardware and algorithms,
featured the most classic shape, and used iPhone self-developed
chips… In cosmology, the big bang, generated by a singularity, gave
birth to the universe we are familiar with. The singularity is an
important turning point in history. The birth of iPhone4 is a
singularity in Apple’s development history, allowing Apple to
embark on a rapid development path. I try to list a few
singularities to predict Solana’s vision of becoming the iOS in the
encrypted world: ——The number of C-end users exceeds 100 million.
On November 7, 2021, the number of active users of Solana’s Phantom
wallet amounted to 1 million. It seems like a big leap from 1
million to 100 million. However, the exponential effect of the
growth of the encrypted world network will speed up the process
considerably. Anatoly Yakovenko, a co-founder of Solana, held a
more positive opinion. He has repeatedly stated that with the
launch and operation of new technologies, Solana’s next goal is to
“attract one billion users.” You know, the number of VISA users
worldwide exceeded 3 billion as early as 2018. —— Over 80% of the
transactions are performed by institutional users. The
participation of more institutional users in the encrypted market
will attract more capital. The bull market in 2021 is driven by
institutions. Many institutions, such as Tesla, Microstrategy,
Grayscale, and the ARK founded by Catherine Wood, have entered the
encrypted market one after another. SBF deems that the crypto
sector driven primarily by potential institutional investment is
likely to grow in the next five years. In my opinion, according to
the Pareto principle (80/20 rule), if institutional users become
the main force of the Solana market, and if their trading volume
accounts for more than 80% of the total volume, Solana will usher
in a new round of development. ——Over a third of Ethereum projects
migrate to Solana. In June of this year, Neon Labs, a cross-chain
bridge between Ethereum and Solana, was released. Neon allows
anyone to run Ether smart contracts on the Solana blockchain,
making it easier for developers to build programs that work on both
blockchains. It would be an exciting time if more than one-third of
the projects that have been deployed and developed on Ethereum are
simultaneously building applications on Solana. ——Solana’s
total market capitalization reaches 50% of Ethereum’s. SBF reckons
that Solana’s unique underlying technology for developing the DeFi
protocol will drive a spike in the price of its SOL tokens. He even
believes that Solana can surpass Ether as the largest decentralized
financial platform. Ethereum’s current market value (about $470
billion) is still nearly eight times that of Solana (about $55
billion). If Solana reaches 50% of Ethereum’s market value, it will
be an important milestone in the development of Solana. The
singularities of Solana ecological development (forecast) Will
Solana become the iOS in the encrypted world? Probably nothing. I
very much agree with Kyle Samani, managing partner of Multicoin
Capital, “I think we’re going to see two things [Solana and
Ethereum] coexist. We have iOS, we have Android. And, today,
everyone knows you have to build an iPhone app and an Android app.”
Perhaps, in the near future, Solana and Ethereum may become
encrypted world’s iOS and Android, respectively. Fortunately, we
are all witnesses and participators of this great change. Note:
This paper is a CGV FOF Research Report and does not constitute any
investment suggestions. It is for reference only. About CGV
FOF: the Master fund from Asia, composed of family funds such as
Japan, Korea, Chinese mainland and Taiwan, and focuses on investing
in Crypto Fund and Crypto Studio. CGV FOF is headquartered in Japan
and has branches in Singapore and Canada. References 《Solana
Summer》,Not Boring by Packy McCormick, 2021 Solana Summer, Not
Boring by Packy McCormick, 2021 《An Introduction to
Solana》,Grayscale, 2021 An Introduction to Solana, Grayscale, 2021
《Why Solana is the ’World Computer’ Blockchain Developers Need》,
Andrew Hyde, 2019 Why Solana is the “World Computer” Blockchain
Developers Need, Andrew Hyde, 2019 《一文读懂以太坊杀手Solana》,OKEx Research,
2020 Understanding the Ethereum Killer Solana by Reading This
Article, OKEx Research, 2020 《Digital Assets: Beauty Is Not in the
Eye of the Beholder》, Goldman, 2021 Digital Assets: Beauty Is Not
in the Eye of the Beholder, Goldman, 2021
Avalanche (COIN:AVAXUSD)
Historical Stock Chart
From Aug 2024 to Sep 2024
Avalanche (COIN:AVAXUSD)
Historical Stock Chart
From Sep 2023 to Sep 2024