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The case for the Solana environment

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@miniature-tiger
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Bull-run themes

One of the interesting themes in this bull run, if you look past the number-go-up-only excitement, is how the overall crypto environment is starting to mature and take shape. Some clear patterns are emerging and some clues as to where growth and success will be in the future.

Off the top of my head there have been three development areas taking centre stage over the last year:

  • DeFi. By far the largest. And really this splits down into a huge number of different ideas: decentralised order book exchanges, simple swaps and farms like pancake swap, collateralised lending, derivatives, tokenised real-world asset classes etc etc etc. The list is potentially as long as there are areas of finance itself.
  • NFTs. Tokenised ownership of art and game assets and sporting moments and individual items.
  • Meme coins. Up. Then down.

New platforms

Typically these new development areas are drawn from Ethereum. This is to be expected. It was first to the party, drank half the wine, and was dancing before anyone else left home.

A few other platforms arrived without fanfare. EOS and Tron for example.

But now newer contenders are making an entrance. Binance Smart Chain, Solana, Polkadot and Polygon are all starting to strut their stuff. And there's a queue of new platforms at the door.

How will these platforms shape the market?

So this is where things start to take shape for me.

As each new fashion arises (defi, nfts, memes) devs rush to get new projects onto their favoured platform. For trading Ethereum has Uniswap, BSC has Pancake Swap, Solana has Serum etc.

Each platform will thus have their own offerings. These may be fairly similar. So competition will centre on:

  • Developer numbers: How fast platforms get loaded with new projects and the quality and innovation of those projects. The old VHS vs Betamax argument arises again.
  • Fees: Ethereum struggles with fees and BSC starts to take its market.
  • User numbers. All projects, whether exchanges or nft galleries or even meme coins need users to be interesting.

Platforms are likely to run in competition for a while. Eventually there will probably be some thinning, as devs and users migrate to increasingly popular platforms.

Single use blockchains start to take a back seat. If a platform can reproduce the use case of a single use blockchain, there's a risk it gobbles up all its market.

The centeralised + decentralised combination offering

For me, there is a significant advantage to those platforms that are also associated with a centralised exchange.

Although centralisation isn't the goal here, the centralised exchange can provide:

  • Huge real world advertising.
  • Users: The CEX is the gateway for new users to the market.
  • Developers: CEX developer team can also produce decentralised projects. The CEX can finance project teams. Sponsorship of hackathons.
  • Lower fees through subsidies.

The above leads to faster project development, more users, and maintains low fees.

There are two main platforms that currently have obvious links to centralised exchanges:

  • Binance + BSC
  • FTX / Blockfolio + Solana

EOS are also reportedly looking to buy into this approach with their fund raising for a CEX.

The case for the Solana environment

Of the above three, Solana is currently the most interesting for me.

Solana is the favoured blockchain of Sam Bankman-Fried and his FTX / Blockfolio centralised exchanges / apps. FTX is one of the better exchanges out there in my view.

Users:

  • There is a huge potential market of FTX / Blockfolio users for Solana.

Developers:

  • FTX team builds on Solana. They built Serum, a fully decentralised order-book exchange (rather than a simple trade approach like Uniswap).
  • Solana hackathon is currently underway with a reported 10,000 developers registered.
  • FTX raises funds for new projects arisimg from hackathons (e.g. STEP).

Advertising:

  • FTX sponsors the Miami Heat arena and Blockfolio sponsors Trevor Lawrence, the number one american football draft pick.

Fees:

  • Solana fees are very low.
  • FTX withdrawal fees to Solana wallets are free.

What I am looking out for!

All that said, I already own some SOL. It's currently rocketing at all time highs. So I won't be buying any more at the moment! But it's a coin I'm looking out for on the dips.

What I think is more interesting is new coins for projects in the Solana environment. There is a lot in development and there will be a raft of new projects launched over the next couple of weeks with the Solana hackathon.

The Solana Defi hackathon in March produced COPE as one of its winners so there's plenty of precedence here!

In particular I think there's a gap on Solana currently with no leading NFT project. There's a couple of NFT offerings on this list under development. I'll be watching them closely!

DYOR

  • NOT FINANCIAL ADVICE. PLEASE DO YOUR OWN RESEARCH!

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