Despite a remarkable performance in 2023, Solana (SOL) faces uncertainties in 2024. Learn about recent developments, network outages, and the future of Solana.
In a surprising turn of events, Solana (SOL) managed to shake off the pessimism of a downtrend market, marking itself as one of the most impressive successes of 2023. CoinJar's CEO, Asher Tan, highlighted this achievement during a discussion with Forbes Advisor, stating,
“A 300% rise in the last 12 months has seen Solana firmly entrench itself as a top five coin by market cap.”
Yet, the beginning of 2024 has not been smooth sailing for SOL, raising the debate on whether maintaining a bullish outlook on Solana for the year is prudent. In an interview with Scott Melker, Austin Federa, the Solana Foundation's Head of Strategy, provided insights into the matter.
Recent developments on Solana
In his discussion, Federa emphasized the burgeoning growth of decentralized physical infrastructure networks (DePIN) within the Solana ecosystem, noting significant platform transitions like those of Helium and Render in 2023. He also shed light on breakthroughs in decentralized finance (DeFi) 2.0, citing initiatives like the Jupiter aggregator and Credix. What distinguishes Solana, according to Federa, are its advancements in token extensions. He shared,
“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
Challenges such as frequent network outages have plagued Solana since 2021, sparking widespread debate over its reliability and concerns regarding centralization. Paul Brody, the global blockchain leader at EY, commented on the recent outage on February 6th, expressing skepticism,
“People want to have ETH killer—it’s a fun narrative…but I think (the outage) does raise doubts.”
Conceding the importance of reliability, Federa stated that enhancing the network's uptime remains a critical focus for Solana's engineering team. They aim to significantly reduce the time needed to recover from outages. However, he admitted that balancing network reliability with its ongoing development and utility is a challenging task. He argued,
“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
Federa believes Firedancer to be a pivotal technology set to be launched on Solana's mainnet this year, positioning it alongside Ethereum (ETH) as one of the rare smart contract platforms to support multiple independent validator clients. He also explored the role of Layer-2 solutions in Solana's future. While the primary goal is to enhance Layer 1's capacity to the maximum, he acknowledged that scalable growth might eventually necessitate some layering strategies. Moreover, he introduced Teleport, a pioneering open ride-sharing protocol, highlighting a shift towards interoperable applications within the Solana network.