Exploring the Solana Ecosystem

Solana has proven itself to be a reliable Smart Contract solution for decentralized applications that need high speed and extremely low cost.

Public blockchains have allowed anyone with an internet connection to create and access digital markets. With this technology, the current global financial system has the potential to become more innovative, efficient, and democratized, but one major problem has stood in the way. Historically, Layer 1 blockchains like Ethereum have had a hard time scaling, which ends up slowing down the applications built on top of them and leaving the networks unusable at times. With new users pouring in by the millions, fees continue to rise as do transaction wait times. Anatoly Yakovenko and Raj Gokal set out to fix these scaling issues in 2017 when they founded Solana, a new Layer 1 smart contracts platform.

What is Solana?

Solana is one of the most performant blockchains. It is a fast, secure, and censorship resistant blockchain providing the open infrastructure required for global adoption. The protocol is designed to scale together hardware and bandwidth improvements, with capacity expected to double every 2 years.

Solana is scalable, low cost, and composable

Founded by former Qualcomm, Intel, and Dropbox engineers, the focus behind Solana is to deliver scalability without sacrificing decentralization or security. This high-speed, high-throughput, Proof-of-Stake (“PoS”) protocol currently supports peak capacity of 65,000 transactions per second and 400ms block times, thanks to an innovative network timestamp system called Proof-of-History (“PoH”). PoH was built to solve the problem of time in distributed networks where there isn’t a single, trusted, source of time. When used with a consensus algorithm such as PoS, PoH can reduce messaging overhead in a Practical Byzantine Fault Tolerant (“PBFT”) replicated state machine, resulting in sub-second finality times. Not only is it lighting fast, but it’s also ridiculously low cost with average fees costing less than a cent per transaction. Solana supports writing on-chain programs using the Rust programming language. These key features empower developers to rapidly experiment and deploy apps with composable building blocks without having to deal with additional friction introduced by sharding or fragmented Layer 2 solutions.

Solana’s 8 Core Innovations

Solana's 8 core innovations

Solana was created on the idea that a decentralized network of nodes could match the performance of a single node, but only if the communication between nodes in the network was optimized properly. No other major blockchain comes close to achieving this property, so achieving this is Solana’s ultimate goal. But in order to create a decentralized, permissionless network that matches the performance of a single node, the Solana team had to develop 8 key technologies.

Proof of History (PoH)

Proof of History Explainer by Solana

One of the most difficult problems in distributed systems is agreement on the time and sequence in which events occurred. This problem is even harder in adversarial systems like blockchains. Nodes in the network simply can’t trust an external source of time or any timestamp that appears in a message, so they typically rely on their own local clock without knowledge of any other participants’ clocks in the network. The lack of a trusted source of time means that when a message timestamp is used to accept or reject a message, there is no guarantee that every other participant in the network will make the exact same choice. Solana believes Proof-of-History provides the solution of a decentralized clock for the entire system, so they built an entire blockchain based on it. 

Proof of History Timestamps
Proof of History Timestamps – Solana

Basic principles of how PoH:

  1. Sha256 loops as fast as possible, such that each output is the next input
  2. Loop gets sampled and the number of iterations and state are recorded

The recorded samples represent the passage of time encoded as a verifiable data structure. Additionally, this loop can be used to record events.

  1. Any message that reference any of the samples are guaranteed to have been created after the sample
  2. Messages can be inserted into the loop and hashed together with the state, guaranteeing that a message was created before the next insert.

This data structure guarantees both time and order of events.

Recording messages into a Proof of History sequence - Solana
Recording messages into a Proof of History sequence – Solana

With Proof of History, you can create a historical record that proves that an event has occurred at a specific moment in time. The PoH is a high frequency Verifiable Delay Function (VDF), which is a function that requires a specific number of sequential steps to evaluate, yet produces a unique output that can be efficiently and publicly verified. 

Other blockchains require validators to talk to one another in order to agree that time has passed, but Solana requires all validators to maintain its own clock by constantly solving SHA256-based VDF. Because each validator maintains its own clock, leader selection is scheduled ahead of time for an entire epoch which lasts for thousands of blocks. Each validator is compensated for running the VDF because the block producer receives awards for producing a block.

Proof of History enables the network to never stop, as leaders continue to rotate and the network as a whole makes progress regardless of network conditions. Validators don’t have to talk to one another for the network to make a decision to rotate validators. This mechanism makes Solana unique in that no other blockchain has anything comparable. PoH also allows Solana to optimize for block time, block propagation, throughput, and ledger storage available on the network.

Tower BFT

Tower BFT is Solana’s custom implementation of Practical Byzantine Fault Tolerance (PBFT) that prefers liveness to consistency. Tower BFT leverages PoH as a clock before consensus to reduce messaging overhead and latency. 

Turbine

Inspired by BitTorrent, Turbine is Solana’s block propagation protocol that solves the blockchain scalability trilemme. If you are unfamiliar with the scalability trilemma in blockchain tech, it mostly comes down to bandwidth. Most blockchains today have a fixed amount of bandwidth per node, so increasing the total node count will also increase the amount of time necessary to propage all the data to each node, which is a big problem. Solana’s solution to this problem is Turbine. It is optimized for streaming and transmits data using UDP only, implementing a random path per packet through the network as block producers (leader) stream their data. The leader breaks the block into smaller packets up to 64KB. So for a 128MB block, the leader would produce 2,000 64KB packets and then transmits each packet to a different validator. Each validator then retransmits the pack to a new group of peers that Solana calls a neighborhood. Each neighborhood is responsible for transmitting a portion of its data to each neighborhood below it. This allows for each neighborhood, made up of 200 nodes, with a 3-level network and starting with a single leader, to reach 40,000 validators in roughly 200 milliseconds.

Gulf Stream

Gulf Stream is Solana’s mempool management solution for a high performance network. A mempool is a set of transactions on a blockchain that have been submitted but not yet processed by the network. Solana validators can manage a mempool size of 100,000, which can be executed in a matter of seconds with a network throughput of 50,000TPS. This is possible by pushing transaction caching and forwarding to the edge of the network. Since every Solana validator knows the order of upcoming leaders, they can forward transactions to the expected leader ahead of time, allowing for the execution of transactions ahead of time. This reduces confirmation times and avoids clogged memory on validators from large mempools. Solana’s Gulf Stream solution is unique, as it is not possible in other networks that have a non-deterministic leader (block producer).

Sealevel

Solana’s Sealevel innovation allows a runtime to process tens of thousands of smart contracts in parallel while using as many cores that are available to the validator. This is possible because Solana blockchain transactions actually describe all the states a transaction will read or write while executing.

Pipeline

To achieve quick validations of massive transaction blocks while also replicating them across the network, the process of transaction validation on the Solana network makes use of a common technique called pipelining. Pipeline is Solana’s transaction processing unit for validation optimization. 

Cloudbreak

Cloudbreak is Solana’s horizontally scaled state architecture. The design principle at Solana is to design software that gets out of the way of the hardware to allow 100% utilization — Cloudbreak helps with that. Instead of using traditional databases to solve scaling problems, Solana uses several mechanisms utilized by operating systems.

Archivers

This is Solana’s distributed ledger store for blockchain data storage. After being introduced to Proof of Replication by Filecoin in 2017, the team built its version of PoRep for Solana using a VDF, and optimized for batch verification.

A Conversation with Anatoly Yakovenko

Below is an excerpt from a conversation between Anatoly Yakovenko and Treyce Dahlem.

Treyce: What are some of the challenges you faced as you were initially building Solana, and how does it feel to take on such a big competitor like Ethereum?


Anatoly: IP/internet around the world is really flaky and a huge PIA to deal with. Once we got off test cloud deployments all hell broke loose and we had to rebuild the network stack. 

We love competing, competition is a driver of excellence. But we never thought of ourselves as an “eth killer”.  We always focused on Price Discovery as the most important use case. Which leads down a different design path.  I think there are enough Pareto Efficient tradeoffs in the space for a few dominant designs that cover different use cases.

Treyce: Can you briefly explain Proof of History and how does it compare to proof of work, or proof of stake which Eth 2.0 is switching to?

Anatoly: PoH is not consensus.  It’s a source of time outside of consensus.  The idea comes from early cellular networks, 2G cell was based on TDMA.  Time Division Multiple Access.  Radio has similar challenges to blockchain.  If two towers transmit at the same time over the same frequency, you get interference and noise.  If two block producers produce a block you get a fork, and the network has no idea what the end state is.  So in radio they use a centralized clock to alternate towers.  PoH is a trustless cryptographically generated clock that we can use to rapidly alternate block producers/leaders in Solana

Treyce: One of Solana’s core features is its single global state that ensures composability between projects. How does composability affect the growth of an ecosystem over the long term?

Anatoly: I think the magic happens when you have sophisticated DeFI engines that are able to manage risk in real time + billions of humans all on the same network without any intermediary states or middlemen. Sharding breaks this composability.

Treyce: What sectors or projects are you most looking forward to seeing on Solana, and do you have any tips for people building on Solana?

Anatoly: We are mostly looking for awesome founders who have a crazy idea that they are pursuing relentlessly .  Like Roneil from Audius, when we first talked to him they had about 100k monthly users.  Now it’s over 4m.  When we find that person, we will boil the ocean and eat glass to help them succeed.

SOL Utility Token

SOL is the native token of the Solana blockchain and it uses a delegated-Proof-of-stake consensus algorithm that incentivizes token holders to validate transactions. SOL has three main use cases:

  1. Staking
  2. Transaction fees
  3. Governance

SOL Token Distribution

  • Community 38.89%
  • Seed Sale 16.23%
  • Founding Sale 12.92%
  • Team 12.79%
  • Foundation 10.46%
  • Validator Sale 5.18%
  • Strategic Sale 1.88%
  • CoinList Auction Sale 1.64%
Solana token distribution

SOL Price History and Volume

The price of SOL has increased at a rapid rate so far this year, climbing +2,622% from $1.8 to $49. SOL has made its way into the big leagues, as its market cap has climbed from $86M to $12B to put it at #15 in market cap rankings. This makes it the 5th biggest Smart Contract Platform, only behind ICP, DOT, ADA, and ETH. Additionally, Solana has seen its trading activity skyrocket. Across all venues, SOL averages $1B in reported trading volume on a daily basis. 

sol price vs trading volume

Not only has Solana become the 5th biggest Smart Contract Platform, but it has been the best performing Smart Contract Platform so far in 2021! With SOL’s YTD return of 2,357%, it completely blows the runner ups ETC (+1,209%) and ADA (+948%) out of the water.

smart contract platforms returns in 2021

SOL Sentiment and Tweet Volume

This huge surge in price and ecosystem development has sparked a thriving community on Twitter. There are now ~4,488 Tweets sent out about Solana on a daily basis, a new all time high in volume. Not only are there more Tweets being sent out about SOL, but the tone of these Tweets is becoming increasingly more positive. As indicated on the chart below, The TIE’s 30d Avg Daily Sentiment Score has reached record highs. Investor sentiment on Solana has only spent 2 days this year below a neutral sentiment score of 50.

solana sentiment vs tweet volume

Solana GitHub Activity

Solana has been a project with some consistently active developers. Since February 2018, there have only been two months where there were less than 200 GitHub commits. These numbers rank Solana above the likes of Bitcoin and Ethereum.

solana github activity
Image courtesy of Coin98 Analytics

Wormhole

Solana and Certus One, a premier validator for distributed ledger technology, partnered up to create Wormhole. Wormhole is a bidirectional, decentralized ERC-20 ⇄ SPL token bridge between Ethereum and Solana. Instead of being its own blockchain network, Wormhole relies on consensus and finalization of both chains that it bridges. Wormhole allows existing projects, platforms, and communities to move tokenized assets seamlessly across blockchains, while taking advantage of Solana’s high speed and low transaction costs.

Solana Wormhole
Wormhole Sketch – Solana GitHub

Solana’s Recent Significant Developments

5/20/2021 – Solana is launching on Coinbase Pro

5/15/2021 – Solana Season Hackathon begins

5/7/2021 – 5 new funds bring $100M to boost growth of Solana Ecosystem

4/30/2021 – Staking giant Lido looks to bring services to Solana

3/12/2021 – Tether launches tokens on Solana

3/11/2021 – Civic announces integration with Solana

Solana Ecosystem

You can access the full list of projects within the Solana ecosystem here.

Solana Ecosystem
Image courtesy of Coin98 Analytics

Ecosystem Comparison

Considering Ethereum has been the market leader for Smart Contract Platforms for years now, it’s no surprise that the ETH ecosystem has a market cap of $794.6B, which is +600% bigger than the next biggest ecosystem, Binance Smart Chain. But with new users looking for ways to avoid Ethereum’s high gas fees, many have been exploring alternative chains. Besides Ethereum, there are currently three Smart Contract Platforms with an ecosystem-wide market cap of $50B or more: Binance Smart Chain ($110.7B), Polkadot ($72.4B), and Polygon ($50.3B). Falling slightly below the $50B threshold is Solana at $38B. 

Ecosystem market cap comparison

Another metric we can use to compare ecosystems is Total Value Locked (TVL). TVL represents the amount of assets currently being staked in a protocol. The Ethereum ecosystem has $107.4B in TVL, followed by Binance Smart Chain at $30.8B. After that, there’s a relatively big gap down to Polygon at $9.3B, followed by Terra’s $3.2B. TVL in Solana sits at $1.6B.

Ecosystem total value locked comparison

The $1.6B in TVL on Solana is a new all time high, as it was just recently accomplished. Two protocols make up for the lump sum of that total; Raydium and Serum account for $1.4B TVL.

Total value locked in solana defi ecosystem

Project Serum

project serum

In its current state, Decentralized Finance (DeFi) is slow and expensive. It costs dollars to send a transaction and it takes minutes for that transaction to settle. While this may work for some applications, true DeFi needs to be extremely cheap and blazing fast. We have seen ETH gas fees reach extreme heights recently, where trading on Uniswap and other DEX’s has become almost unusable at times. Here is an example of some of these extremes, where a trader swapped 0.01 ETH for 91k HOGE on Uniswap, a value of $41.53, with a transaction fee of $265.59. 

high gas fees

Or this one; swapping 333k SHIB for 0.002 WETH, a value of $9.31, with a transaction fee of $162.88.

In order for a billion people to become their own bank, scalability and efficiency is essential. Enter Project Serum.

Faster, Cheaper, and more Powerful DeFi

Project Serum provides some promising solutions to the current state of DeFi. FTX and Alameda Research, led by Sam Bankman-Fried, created the Serum Foundation and launched Serum, a complete, non-custodial DEX running an innovative on-chain central limit order book (CLOB) on the Solana blockchain. In addition to order books, it has cross-chain support, stablecoins, wrapped coins, and the ability to create custom, complex, and novel financial products. The combination of Solana and Serum DEX presents the speed, cost, and UX that users expect from centralized exchanges, all while being fully decentralized and trustless. With sub-second trading and settlement times, and lower transaction costs than any other DEX at $0.00001 per transaction, Serum is uniquely positioned to help DeFi scale to billions.

Anyone in the world can open an account instantly on Serum DEX, with no KYC and no withdrawal limits. Since Serum is an open source project, anyone that wants to contribute to building the project has the ability to do so. If you want to build a fast and cheap DEX on Solana, you could learn Rust and build out an on-chain matching engine, find market makers, build interfaces, the list goes on. Or you could simply just fork a Serum GUI, hook up your address, and customize it, all within an hour. You are instantly connected to the central limit order books on Serum and have a fully functioning and highly liquid DEX ready to go. Even better, as an incentive for hosting a GUI, you get a portion of all the trading fees that take place on the exchange. The Serum DEX acts as the infrastructure for any financial projects building on the Solana ecosystem.

Serum Roadmap

Phase One

  • SRM Token
    • SRM FAQ
    • Both SPL and ERC20 Versions
    • Listed on Major Exchanges
  • On-Chain DEX on Serum
    • List of DEXes
    • Fully On-Chain
    • Fast: ~1 Second Settlements
    • Cheap: ~$0.00002 Gas

Phase Two

Phase Three (In Progress)

  • Borrow/Lending
  • Yield
  • More Cross-Chain Bridges
  • Projects Building on Serum
  • AMMs
  • Margin Trading/Contracts
  • Tokens and Exchanges Natively Supporting SPL
  • Volume and TVL Growth

SRM Utility Token

The Serum ecosystem is powered by the SRM utility token. SRM was designed with the goal of value accrual through utility, not hyperinflation. Despite being natively built on Solana (SPL Token), it’s cross-listed as ERC-20. SRM is fully integrated into Serum; holders of the token benefit from up to 50% off all fees on Serum, the ability to participate in buy and burns for 100% of net fees, and specialized on-chain governance. SRM can be staked on a node, with each node requiring a minimum of 10,000,000 SRM and at least one MSRM (1M SRM). This operation helps decentralize the network and offer support in transaction settlement validation.

SRM Token Distribution

  • Ecosystem Incentive Fund: 27%
  • Partner and Collaborator Fund: 27%
  • Project Contributors: 22%
  • Team and Advisors: 20%
  • Locked Seed and Auction Purchasers: 4%
srm token distribution

Approximately 10% of SRM tokens were released at launch, most going towards ecosystem incentives. The other 90% of all SRM tokens are locked up long-term for 7 years, with none unlocking in the first year. This is interesting because it means that the core players are all committed to the long-term success of Serum.

SRM token unlock
Image courtesy of Coingecko

On-Chain Central Limit Order Book (CLOB)

Serum is different from other DEXs that use an Automated Market Maker (AMM) model, as Serum uses automated on-chain limit order books, allowing traders to submit orders with directions, prices, and sizes, giving them complete control over their trading. These order books aren’t centrally controlled, they are fully programmatic as they automatically match orders between third party users through the use of smart contracts. Protocols with any trading-related features can benefit greatly by sending their bids and offers to the Serum DEX’s CLOB. A CLOB is only possible thanks to Solana’s high scalability. Solana supports 60,000tps vs. BSC’s 300tps and Ethereum’s 18tps. If DeFi is going to achieve the lofty goal of one billion users and $10T of on-chain value, this high speed, scalable infrustruce is surely needed. 

Because order books are some of the most computationally intensive products in DeFi, they simply don’t work on Ethereum, as the fees and slow transaction times completely stunt the model. The Serum protocol has optimized the matching engines in order to make order matching much faster and cheaper. A CLOB matches all bids and offers according to order price and then time priority. The matching between buyer and seller is fundamental to all types of financial transactions. The market structure of a CLOB based DEX allows for larger trades than an AMM, without increasing risk of slippage. Liquidity to be concentrated in the most efficient way and adjusted in real-time. These order books serve as the core pricing source for Serum. Each trade is charged a fee and all of those net fees go into a buy/burn of SRM.

SRM’s Price History

The price of SRM has increased +400% so far this year, with a number of different significant developments helping boost the price higher. Serum did a series of twenty SRM yield airdrops, which ended in late November of 2020. As the yield airdrops ended and the selling pressure stopped, SRM price started its uptrend. In early January 2021, Kin made the move over to Serum. Then a series of three key developments occurred in February which spring loaded the price higher; Solana & Serum DeFi Hackathon, Staking/Lockup program went live, and FTX listed SRM perpetual swap contracts. On April 23, Serum announced the depreciation of Serum Swap. While this may initially sound like a negative event, it’s actually a positive. Serum stepped aside to let Raydium Swaps shine, since Raydium had been executing swaps at a more efficient rate. Shortly after this announcement, the price of SRM surged to a new all time high of $11.79.

srm price history

Serum DEX Trading Volume

Serum DEX trading volumes are on the rise. Serum set record highs of $1.1B in April and has already reached $900M so far in May. The average daily trading volume this month has been over $50M, which is 50% higher than last month and 400% higher than the month before.

serum dex monthly trading volume

Despite trading volume increasing in recent months, Serum DEX still has a long way to go to catch up to the DEX leaders. Pancake Swap’s $3.1B average daily volume has overtaken Uniswap’s $2.1B, and the DEXes below those have yet to clear $600M on a daily basis. 

dex trading volume

A Conversation with Sam Bankman-Fried

Below is an excerpt from a conversation between Sam Bankman-Fried and Treyce Dahlem.

Treyce: What is the biggest risk to Serum’s success?

Sam: Poor execution.

Treyce: How do you continue to attract capital to both the SOL ecosystem and SRM specifically?

Sam: You can try to directly attract capital through yield farming etc.; or you can just build great products, and the capital will eventually follow.

Treyce: What is the most exciting innovation on the roadmap for Serum?

Sam: (a) derivatives; (b) on-chain social media; (c) something not yet public coming out soon

Serum’s Recent Significant Developments

5/17/2021 – Bonfida x Serum trading bot competition opens

5/1/2021 – Sollectify launches on Serum and Solana

4/29/2021 – Soleon receives grant from Serum

4/27/2021 – Dexlab receives grant from Serum

Raydium:

raydium

Raydium was founded by former prop traders who got into crypto in December 2017 to trade arbitrage strategies on Bitcoin. After getting into DeFi in the summer of 2020 and spending a lot of time yield farming and swapping tokens on AMMs, one problem seemed to consistently arise. Gas prices were sky high. To swap a token, start farming it, then harvest it, you would easily be paying over $100 in ETH gas fees. This constantly recurring problem of high fees seems to be holding DeFi back from reaching its full potential; DeFi is supposed to give everybody access to financial tools, not just large corporations, banks, institutions, and large bankroll investors.

So when gas prices spiked to new highs in September, AlphaRay, Co-Founder of Raydium, started looking for other solutions. Since they were already trading on FTX, they called up the team to chat about possible ways to work on things to better the DeFi community. This was around the time that FTX had started building Serum on the Solana blockchain. After hearing about Solana’s ultra high speeds and low fees, plus Serum’s plan for a central limit order book, the idea behind Raydium came to light.

The Raydium Protocol: An Ecosystem Sustaining AMM

Raydium is an automated market maker (AMM) that enables lightning-fast trades, shared liquidity, and new features for earning yield. Unlike other AMMs who are only able to access liquidity within their own pools, think Uniswap/PancakeSwap/Sushi, Raydium provides liquidity to Serum’s on-chain central limit order book, granting ecosystem-wide access to all order flow and liquidity on Serum. Since Raydium is built on Solana, you can expect significantly lower fees and transaction times, enabling scalability heights that are unmatched on Ethereum. Not only does this allow everyone to participate in DeFi, it allows everyone to take advantage of yield and price opportunities at will. No more 15 minute wait times when trying to swap a token only for the price to move out of your slippage and result in a failed transaction. Raydium is affordable and fast, even at scale.

Order books and Trading Interface

With the help of Serum, Raydium has brought order books to AMMs, allowing traders to exchange the tokens they are willing to trade at any price. Traditional AMMs don’t allow you to change your price, so you’re almost always taking the worst price in the market. In addition to that, with so much overlapping liquidity in their different offerings, traders end up paying more for slippage because liquidity is fragmented throughout several different pools. Since Raydium provides liquidity to Serum’s CLOB, anyone on Serum can transact against that liquidity and vice versa.

Raydium trading interface
Raydium Trading Interface

Market Making

The purpose of market makers is to facilitate the process of finding a fair price for a product as well as to provide market participants with liquidity on the other side of their trade. The market maker is rewarded for these services, as they earn the price difference between their bid and ask prices when participants trade against them, as well as earn a rebate from the exchange for providing liquidity. Raydium acts as a market maker, taking all the tokens accrued in its LPs to place a series of orders at different prices and sizes on to the orderbook using an equation called the constant product invariant.

Swaps

Raydium swaps are a simple, cost-effective, and high speed way to quickly swap one token for another. Despite this being a standard feature on other AMMs, traders will save a significant amount of time and costs when compared to other platforms. 

raydium swaps
Raydium Swaps

Fusion Pools and Dual Yield

Raydium has taken extra steps to further expand the Solana ecosystem by launching Fusion Pools. The fusion of Raydium and top quality partner projects will drive ecosystem-wide liquidity and enable these projects to grow with sufficient support. These Fusion Pools are essentially liquidity pools with two partner tokens from within the ecosystem. This allows for these projects to interact with their user base and reward them, in addition to getting an initial boost from the Raydium community. When tokens are added to a liquidity pool, Raydium issues a liquidity provider (LP) token to track what percentage of the pool the owner of this token represents. These tokens can then be farmed to receive rewards. Projects can also sponsor certain pools by adding tokens to a reward pool to further incentive users to hold project tokens and receive additional rewards while providing liquidity.

fusion pools and dual yield
Raydium Fusion Pools

AcceleRaytor

acceloraytor
Raydium AcceleRaytorhttps://raydium.io/acceleraytor/

Raydium is playing a key role in driving liquidity and expansion within the Solana ecosystem. With the massive influx of builders and projects joining the ecosystem, Raydium is jumping on the opportunity to really accelerate project growth through enabling teams to raise funds, drive awareness, and launch an Initial DEX Offering (IDO) all in one place. AcceleRaytor is Raydium’s new launchpad that will allow projects and the Raydium community to participate in fair, open, and carefully curated token offerings. 

Users can participate in two different types of pools for each AcceleRaytor project; Community Pools and RAY Pools. Community Pools are open to the entire community, allowing anyone to participate whether they have used Raydium before or not. RAY Pools are only available for users who hold a minimum number of RAY tokens and have been staking it on Raydium for a set period of time. There are two primary token allocation models; a first come first serve model and guaranteed proportional model. The guaranteed proportional model gives all participants who contributed within the set time period an allocation proportional to their contributed funds as a percentage of total funds contributed. Any funds that exceed the max cap of the pool will be returned.

After raising funds through AcceleRaytor, these projects can launch an IDO through Raydium liquidity pools. This will allow the community to quickly provide liquidity and trading the token. Projects can also offer LP farming rewards for LPs immediately after the IDO. This system provides a stage for an efficiency token launch within the Solana ecosystem.

Raydium Roadmap

Q4 2020 

  • Ideation and project scope
  • Development of the protocol and iteration on testnet

Q1 2021

  • Development of liquidity pools and staking completed, mainnet launched
  • Website and platform launch
  • Development of cross-chain swap

Q2 2021

  • Research on additional market making models and features in partnership with other protocols

Q3 2021

  • Leverage of external oracles for improved market making
  • Governance model ideation in collaboration with partners

RAY Token Distribution

  • Liquidity Mining 34%
  • Partnerships and Ecosystem 30%
  • Team 20%
  • Liquidity 8%
  • Community & Seed Funding 6%
  • Advisors 2%
raydium token distribution

There is a hard cap of 555 million RAY. The total RAY mining reserve consists of 34% of all tokens, or 188.7M RAY. Emissions will last for approximately 36 months, with halvenings occurring every six months. 0.03% of trading fees will be awarded to RAY stakers.

ray projected circulating supply
Image courtesy of Coingecko

Raydium DEX Trading Volume

As the crypto market crashed on May 19th, Raydium experienced a new all time high in trading volume. Roughly $170M in volume went through, beating the previous high of $162M set a month ago.

raydium dex trading volume

The chart below shows the top 10 DEXes by TVL, with their respective blockchains. As expected, ETH based DEXes dominate most of the top 10, except for the first place spot that Pancake Swap holds. As previously mentioned above, Raydium is responsible for the majority of TVL in Solana. Raydium ranks #9 on the top 10 list, the only project from Solana on the list.

top dex by total value locked

Cope

cope

Cope is a project created by legendary dev Cyrii, and it enables traders to rank their performance and view other traders’ performance in an index based on their Cope score. Cope won the Community Choice Prize in the Solana x Serum DeFi Hackathon, voted by the community. It consists of two phases:

Phase 1:

Phase 1 involves seeking out active traders on Twitter to evaluate their weaknesses and failures retrospectively based on their calls made in the crypto markets. They will then receive reports for self analysis. Traders are evaluated based on their call accuracy along with a few other parameters, resulting in a COPE score. High ranking traders are labeled as Top Call Makers. The top 100 Call Makers are placed in a COPE index, ranking them by COPE score. This will provide a new type of investment product based on top trader calls.

Users can stake their COPE tokens to receive LP-COPE, allowing them to unlock their COPE Report. These reports will highlight recurring actions that lead to winning and losing trade results, which can be read and studied over again to improve trading skills.

The COPE airdrop sparked a lot of excitement within the community. There were over 5,000 participants who received 2,000 COPE tokens for free. The value of this airdrop hit a peak of $16,600. 

Phase 2:

Phase 2 of Cope will be an automated investment product that users can give permission to trade on their behalf based on the COPE index. The immediate capability allows for integration of the Serum DEX and its CLOB, but the longer term vision is to support cross-chain trading.

Cope Roadmap

  • Integrate Sollet Wallet – Allow User login via Solana Wallet
  • Integrate Automated Twitter Verification – Enable Solana Wallet <-> Twitter Connection
  • Implement Top 100 COPE Index – Onboard top 100 call makers from 10000s. Update and maintain this regularly
  • Implement the COPE Token – Mint COPE on Solana Blockchain and implement necessary distribution processes
  • Implement the COPE / SOL Pool – Allow users to buy COPE with SOL
  • Implement COPE staking – Allow COPE staking for LP token issuance and ownership for report unlocks and disputation process
  • Implement COPE distribution processes – Build COPE distribution processes for Report Unlocking and COPE emission events for users participating in the COPE INDEX
  • Implement Call Disputation Process – Implement 30 minute time window Call Disputation Process via direct COPE staking
  • Implement COPE Governance – Implement COPE Governance for Pool Creation and Autonomous Bonding Curve Distribution

The COPE Engine

cope engine
COPE Engine

Mango Markets

mango markets

Mango Markets is an elegantly designed decentralized trading platform that enables cross-margin trading. Mango intends to merge the liquidity and usability of CeFi with the permissionless innovation of DeFi, all at a lower cost to the end user than both currently provide. Users can trade with up to 5x leverage on Mango, beating the 2x leverage offered on Aave and Compound. Additionally, Aave and Compound only allow for margin trading to be done with market orders or swaps, not limit orders. This makes them useless for market makers.

Trades on Mango can be long or short, with limit orders on the Serum DEX on-chain central limit order book. There are no fees on interest, as the only fees you will pay are for trading on Serum DEX. You can provide liquidity via SRM token into a pool to reduce these fees for everyone on the platform. Trading on Mango Markets is as simple as connecting your wallet and depositing your currency. All deposits earn interest.

Mango prides itself on its low latency and low transaction costs. Low latency increases usability and user experience, nobody likes waiting around for transactions. Low latency also enables better liquidity, as liquidity providers’ quote spreads are directly proportional to the time required to change the quote. Low transaction costs are absolutely essential to DeFi in order to reach its full potential. Mango ensures that all transaction costs on all Mango financial tools will be comparable or lower than the trading costs in CeFi.

mango markets trading interface
Mango Markets Trading Interface

Now of course, with any margin trading platform comes some risks. Since the Mango protocol doesn’t chart any fees on interests, the protocol does not have an insurance fund. In addition to that, there is the risk of liquidation. When a margin account has negative equity, the losses are socialized among the lenders. Read more about the risks here.

Mango Roadmap

Mango Margin “closed alpha”

  • First weeks of March
  • Enforces strict borrow limits for every account
  • Liquidator and solana program remain closed source
  • 3rd party liquidators begin implementing their strategies

Mango Margin “public beta”

  • Began in March 2021 and continues to run
  • Borrow limits will be replaced with the introduction of partial liquidations
  • Margin trading interface largely improved based on feedback during alpha phase
  • Additional trading pairs will be released
  • Step-wise open source releases as independent reviews are finishing

Mango Perp “closed alpha”

  • Begins early June 2021 and runs for a few weeks
  • Market makers can integrate and test

Mango Perp “public beta”

  • Sale of tokens that go directly into insurance fund
  • introduces governance token

Mango DAO Launch

  • Formal on-chain governance mechanism
  • Website and forums for participation in governance
  • Further proposals to reward contributors

Mango Token Distribution

Max Supply: 10,000,000,000

Initial Circulating Supply: 2,000,000,000

DAO 80%

Temporary Governance Fund 10%

Insurance Fund Sale 5%

Creators 5%

mango token distribution

First and foremost, the Mango Token is a governance token. After the initial distribution of tokens, the DAO will play the main role in distribution. The DAO may distribute more tokens via governance proposals. This means that token holders will have a direct impact on the protocol and have the power to update it at will. Any user that holds at least 0.1% of the Mango Token supply will have the ability to stake their tokens and can propose governance actions. These actions can be a number of different things; new asset listings, changing asset collateral factors, updating market interest rate models, and more. Every proposal is executable by code.

Step Finance

step finance

Step Finance aims to be the front page of Solana. You can track, visualize, analyze, aggregate, and execute transactions across Solana in one easy to use dashboard. Users can understand the performance and risk profile of their positions with full support for all tokens and projects within the Solana ecosystem. Access token balances, AMM LPs, yield farms, and more. 

step finance dashboard
Step Finance Dashboard

STEP Token Distribution

STEP Token Distribution

The STEP token ensures there is a clear alignment of incentives between users, token holders, and the team. The Max Supply is 1,000,000,000 STEP. The emission period is 2 years, with emission reducing -4% weekly. This rewards early risk takes and the new supply that enters into circulation reduces over time.  Founder lockup is 2 years vested in 25% increments every 6 months. Step will charge fees for services on step.finance such as swaps, yield farms, etc. with 80% of those fees going to stakers and 20% to treasury.

Hxro

hxro

Hxro is a cryptocurrency platform which offers a simplified way to interact with the market by giving traders an alternative way to express a view on price, hedge risk, and trade different digital assets. Hxro’s products are fair, approachable, and easy to understand. By combining aspects of legacy financial markets with the aspects of social gaming, users find themselves with an innovative alternative to trading crypto.

hxro trading interface
Hxro Trading Interface

One of Hxro’s core products is MoonRekt, a system that aggregates all positions into liquidity pools with the in-the-money positions sharing the total pool at expiration. Traders choose whether the price of the underlying index will close higher (MOON) or lower (REKT) within the selected contract time frame. A simple payoff mechanism in which the out-of-the-money positions pay in-the-money positions. These contracts allow for users to take bullish or bearish positions on common time frames like 1-minute, 5-minute, 15-minute, 1-hour, and 1-day.

Hxro’s Recent Significant Developments

5/7/2021 – Hxro launches DOGE TIX options

5/6/2021 – SOL $100 TIX WIX options go live

4/28/2021 – Hxro CEO joins Solana Hackathon as featured judge

Solana Wallets

Users of Solana have a growing variety of different wallets they can use to send, receive, and interact with SOL tokens on the Solana blockchain. You can read the official docs for Solana wallets here.

Web Wallets

Phantom 

Phantom is a digital wallet and browser extension reimagined for DeFi and NFTs with an elegant UX. Users can manage digital assets and access decentralized applications on the Solana blockchain. Phantom works by creating and managing private keys on behalf of its users, allowing them to store funds and sign transactions. 

At the time of writing, Phantom is still in beta so you will need a code to download and access the wallet. You can download Phantom here and use code ‘BITDEALER’ to gain access to beta.

Website

Twitter

Sollet

Sollet is a non-custodial web wallet created by the Project Serum team. Users can hold, send, and receive all Solana and SPL tokens in Sollet.

Website

SolFlare

SolFlare is a non-custodial wallet with a simple and intuitive interface that helps you connect to the Solana blockchain and manage your SOL and SPL tokens. SolFlare is the first wallet that allows users to stake SOL tokens.

Website

MathWallet

MathWallet supports wallet addresses for sending and receiving SOL and SPL tokens through a browser extension and web wallet interface. MathWallet iOS and Android app do not support Solana yet, but will in the future.

Website

Mobile App Wallets

Exodus

Exodus is a popular crypto wallet that has been around for several years. You can send, receive, and exchange tokens with ease on a Desktop, Mobile, and Hardware wallet.

Website

Trust Wallet

Trust Wallet is an app available on both iOS and Android. Users can send and receive SOL tokens. Note that Trust Wallet doesn’t support stake accounts or operations.

Website

Conclusion

solana raydium serum
Image courtesy of 3d_future

Solana has proven to be a reliable solution for decentralized applications that need high speed and extremely low costs. Solana’s breakthrough innovation’s allow for these dApps to scale to billions, without sacrificing decentralization or security. When combining Solana with other innovative projects like Serum and its central limit order book, or Raydium’s ecosystem sustaining AMM, you allow DeFi to reach its full potential. As new users pour into crypto by the millions, the high fees and slow transaction times provided by other blockchains will only push users to seek out more affordable solutions.

Solana Ecosystem Resources

Solana

Solana Whitepaper

Solana’s 8 Core Innovations

Solana Ecosystem

Solana Beach

Solana Project

Project Serum

Serum Academy

Raydium

Cope

Mango Markets

Step Finance

Hxro