Ethereum's native protocol, fleeing to Solana

Original title: "ETH's DeFi Scene Eyes Solana"

Solana solidifies its legacy after rising from the ashes of the FTX/Alameda collapse The status of top blockchain. In the ensuing community-led resurgence, the sweat of the Solana-native team drove the wheels of progress, but with the steady growth of SOL prices and DeFi metrics within its ecosystem, non-Solana-native protocols are also ready to seize the opportunity to take off.

Solana native protocol paves the way

SOL’s surge from a low of $8 in December 2022 to $210 two months ago has been the most notable cryptocurrency of this cycle is one of the comeback rallies, but the ecosystem’s wealth creation isn’t limited to its native token holders.

The developers of the Solana ecosystem continue to create emotional highs in the market, starting with the PYTH airdrop in November, which allocated the tokens on Solana to 27 networks (including Ethereum and its L2) address interacting with Pyth oracles and marks a turning point in providing users from other ecosystems with a direct financial incentive to support testing Solana.

Shortly after, Jito Labs, Solana’s native liquidity staking protocol, conducted its own airdrop, rewarding qualified wallets that earned over 100 points through the simple act of holding a jitoSOL deposit receipt, and allocate at least five digits of tokens. The dizzying allocations received by Jito users turned Solana into a premier destination for airdrop hunting and fueled mass adoption of points-based incentive systems through fledgling protocols within its own ecosystem that have proven to Very successful in attracting users and their funds.

The gradually changing landscape

While native protocols have laid the foundation for Solana’s acceptance of mainstream cryptocurrencies, Solana is gradually becoming the “host” for Ethereum developers.

This transition will likely occur at a glacial pace, but there is no doubt that as more and more projects become aware of the massive on-chain activity within the Solana ecosystem and are eager to take advantage of the opportunity, The migration from Ethereum to Solana is bound to happen.

Decentralized computing sharing network Render fully supported the Solana vision early on and chose to migrate its token to the SPL standard in November. And while MetaMask is often considered a laggard when it comes to improving user experience, the project was one of the first Ethereum-native applications to introduce Solana compatibility, launching “Snaps” last September to enable users to select directly from MetaMask. Applications that enter the Solana ecosystem. To date, the Snaps integration for Solflare, Solana’s native wallet, has attracted more than 500,000 users.

Also, there are many native lending markets on Solana, but none have the same level of time-tested security as Ethereum’s blue-chip lending project Aave. Looking to leverage its brand as a competitive advantage over Solana, Aave DAO approved the January temperature check with an 83% pass rate, deploying the minimum viable version of its V3 segregated currency market via Neon EVM, a fully compatible Ethereum development Environment Solana Blockchain.

Last Wednesday, a community-led proposal appeared on the governance forum of GMX, the EVM ecosystem’s perpetual contract trading platform, seeking to establish an independent exchange deployment called GMSOL on Solana. GMSOL will exclusively utilize GMX tokens for all value measurement and storage, while implementing a GMX buyback mechanism and allocating a significant portion of fees back to the GMX Vault to build the GMSOL Vault.

In exchange for the bonus of this new Solana native deployment, the GMX DAO is expected to cover all costs associated with protocol review and grant a license to copy and use its front-end code.

In addition, the market generally speculates that Ethena and Pendle, the two leading Ethereum projects, will be deployed to the Solana ecosystem in the near future. The crypto market has been booming in the past month thanks to an improving interest rate environment.

Long-Term Trends

Applications serve users, not blockchains, and while many blue-chip protocols should have a high standard when considering new deployments, if they don’t flock to users and the environment in which the activity exists, that would be silly. On a protocol-lacking network, users will inevitably look for alternatives, putting the market share dominance of existing applications at risk—especially if their chain begins to lose its market share to competitors.

Ethereum and Solana have adopted very different scaling approaches, with the former opting for network sharding to allow everyone to operate validators, while the latter favors a unified state that will use a single shard. While greater decentralization at the validator level helps maintain the integrity of the Ethereum network, it certainly comes with drawbacks that make Solana’s alternative vision extremely attractive in some ways.

Right now, the crypto industry is still in an experimental stage, which means we really don’t know what it will look like in 10 years, but just as investors can engage in prudent portfolio diversification to reduce risk, so can apps Diversify their blockchain deployments to maintain their market share.

Developers pursuing maximum success must admit that there is no inevitable center for the future of finance, and they should deploy their applications accordingly, whether it is Ethereum, Solana, or even EVM + SVM Monad and bank operations regulatory settlement network. The crypto industry must cross a huge chasm of uncertainty to move from infancy to its final state, achieve true adoption, and get trillions of dollars of traditional assets on-chain.

Until then, app developers who blindly succumb to chain loyalty will lose money and market share at the poker table.

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