From a technical and data perspective, how can Solana become the “traffic controller” in the Web3 world?

Produced by｜Ouke Cloud Chain Research Institute

## After the Cancun upgrade was completed, except for the sharp reduction in L2 handling fees, the Ethereum ecosystem did not cause ripples. On the contrary, Solana once again became the focus with a short Meme craze. Although the Meme popularity of Solana ecology has faded this week, with its unique technical advantages and active community ecology, Solana has become a well-deserved "traffic responsibility" in today's Web3 public chain track.

The relative advantage continues to expand? But the goal is not Ethereum

Unlike most other Layer 1 public chains, Solana’s goal does not seem to surpass Ethereum. Solana founder Anatoly Yakovenko’s original vision was to make Solana the “Nasdaq of blockchain.” ——Achieve the transaction scale and response speed of Nasdaq on the public chain, and bring fast and inclusive on-chain financial services to more users

. For this reason, Solana emphasized transaction speed and performance at the beginning of its design, which is also one of the most eye-catching features of Solana today. Solana’s white paper claims that it can complete 710,000 transactions per second, but of course this is only theoretical. At the time of writing this article, Solana’s TPS has been basically stable at around 2000-3000 in the past 6 hours, which is nearly 300 times different from the theoretical data. If you consider that Solana's TPS calculation also includes "voting transactions" of consensus information (

currently accounts for about 2/3 of Solana's TPS, and is usually not included in TPS on other public chains) ,The real TPS of "non-voting transactions" actually involving Dapp smart contract interaction may only be around 600-900. This is far from the expected value, but compared to Ethereum and its L2 TPS, it still has obvious advantages, especially in processing parallel transactions.

Solana’s official website shows that the TPS in the past 6 hours has remained around 2000-3000.

According to data from Dune Analytics, the recent TPS of non-voting transactions is basically in the range of 600-900.

Of course, TPS is not an "excellent indicator". High TPS can be "pretended": assuming a blockchain generates 1 block per hour, but each block contains 1 billion transactions, it theoretically has 277,000 TPS. Such TPS performance looks impressive, but who can accept that one transaction takes 30-60 minutes to complete? TPS is important, but it often ignores the impact of block time on user experience: for users, 0.4 seconds(Solana’s average block time)## There is a huge difference between # and 12 seconds (the average block time of Ethereum) . When users experience a delay of more than 1 second on an application, they may find it intolerable. Especially in today’s trading-heavy crypto world, where price discovery and trade execution are closely linked, every millisecond can matter. Therefore, Solana can provide not only powerful trading capabilities, but also an efficient trading experience that meets user needs.

In addition to fast speed, low cost is equally important. Compared with Ethereum's high handling fees, Solana's handling fees are very cheap. Usually a transfer only requires a basic handling fee of 0.000005 SOL (fixed value, approximately US$0.001 at current prices). Even if this handling fee is compared with Ethereum L2 after completing the Cancun upgrade, there is still an order of magnitude gap. This gap is not obvious in low-frequency and high-value trading scenarios, but when high-frequency trading needs exist, the cost gap between US$0.001 and US$0.01 will be huge.

OKLink special page: After the Cancun upgrade is completed, the average daily handling fee of Ethereum L2 changes

History has repeatedly proven, Only when the cost of interaction between users and products is drastically reduced, technology adoption will accelerate. Whether it's cheap Nokia replacing landline connections in the early 2000s, or cheaper smartphones replacing Nokia and helping us catapult us into the digital age. The premise for accelerated technology penetration is that they become efficient enough and cheap enough as they develop.

#Solana’s above-mentioned advantages have also allowed it to show great potential in many fields. Whether it is the rapid growth of concepts such as DeFi, Meme, NFT, GameFi, or the implementation of the DePIN project, which allows blockchain technology to truly integrate with various scenarios in the physical world, Solana's economic and social activities are becoming diversified.

In the long term, due to the "unusual" technical route and technical architecture, Solana may also establish irreplaceable comparative advantages in the future.

First of all, Solana relies heavily on hardware to cope with the challenges brought by the advancement of software-level protocols, thereby ensuring that its speed and scale will increase with hardware advancements. As Moore's Law gradually expires and AI technology continues to promote breakthroughs in GPU/parallel processing capabilities, the computer hardware industry is surpassing software protocols and becoming a new hot spot. Solana is expected to catch up with the development of hardware and further widen the performance gap with other Layer 1 public chains that rely on advancements in software protocols.

In addition, Solana’s insistence on a single architecture may also bring different changes. This choice is undoubtedly a reverse bet that does not conform to the mainstream public chain development ideas. Most of them, including Ethereum, regard the monolithic architecture as an obstacle to long-term scalability, and try to solve the problems caused by the monolithic architecture through modular expansion, Layer 2 expansion, and various forms of sharding exploration. However, considering that on-chain applications will become more and more complex and intertwined in the future, the development complexity built on modular/layered/sharded systems may increase exponentially, making it more difficult for users to interact between different systems. It will also improve rapidly. In comparison, the monolithic structure has lower coordination complexity, lower aggregation latency, and a relatively smaller surface area to be attacked. Solana may be able to bring a more extreme user experience with its monolithic architecture. .

Of course, these are uncertain. The only thing that is certain is that Solana is rising rapidly and has become the "traffic leader" in the current Web3 world.

Become the “traffic leader” in the Web3 world

From a transaction perspective, Solana’s daily transaction volume has increased significantly in the past month Maintaining strong momentum. Different from the violent fluctuations in ETH trading volume, Solana’s token trading volume increased by more than 775.91% in a single month, and last weekend it exceeded the $10 billion mark due to the Meme craze. Although there is still a certain gap between ETH and SOL in terms of token transaction volume, the gap between the two is significantly narrowing.

Source: Token Terminal

Compared with transaction volume, token turnover rate (refers to the frequency of tokens changing hands within a certain period of time) can better reflect changes in market liquidity. In the past year, the token turnover rate of SOL has always been higher than that of ETH, and there has been a trend of further widening the gap in the near future. An excessively high turnover rate does not mean that the token value is high ( can only prove the transaction value), but an excessively low turnover rate must mean a lack of liquidity.

Source: Token Terminal

From the perspective of active users, every user of the Solana network Daily active users have continued to grow at a rapid rate since March, and exceeded the 1 million and 2 million marks on March 16 and 17, continuously setting the record for the number of single-day active users in the history of the crypto world. The data likely overstates the number of users because many people control multiple addresses and are difficult to distinguish. However, with a single-month growth of 379.8% and an annual growth rate of 1816.6%, the growth momentum of Solana’s active users is still surprising.

Source: Token Terminal

Source: OKG Research

More importantly, whether it is Web2 or Web3, the number of developers is one of the most valuable metrics. Steve Ballmer once said: "The key to .net success is developers, developers, developers." In 2023, there will be approximately 2,000 developers ( Including full-time and part-time developers) Participate in Solana ecological construction: This number ranks approximately 7th among all ecosystems in the entire crypto world. This ranking was higher before 2023, but due to the FTX incident and the poor performance of SOL, many developers left. However, Considering the recent recovery of the Solana ecosystem, more developers may refocus and enter the ecosystem.

Source: OKG Research, based on crypto ecosystems Github

Conclusion

Although Solana is performing well now, and even has a tendency to surpass Ethereum in some indicators. But as mentioned at the beginning, Solana’s goal has never been to defeat Ethereum. With high throughput, low latency and low-cost transaction performance, helping Web3 technology penetrate into the traditional Web2 market may be in line with Solana’s original vision.

What's more, even if the latecomers have a strong impact, the basic pattern of Ethereum's leadership has not changed. In the past rounds of competition, the public chain ecology is no longer an exclusive competition of life and death. Cooperation is becoming the main theme in the competition. Looking at the current public chain landscape, except for Ethereum, other public chains are either based on Ethereum to undertake application value overflow; or they focus on vertical ecology and attract mainstream participants to participate; or they use groundbreaking technical advantages to attract Ethereum users and traffic. transfer.

No matter which path you choose, there will be huge development opportunities. Because in the future, we will probably enter a Web3 world with a high degree of cross-chain integration, and the value barriers between chains will gradually disappear. Even Solana and Ethereum may realize the free circulation of value in some scenarios and benefit each other.

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