CGV Research | Why Solana May Become the iOS of the Encrypted World?

— by Shigeru, CryptogramVenture FoF Analysis Fellow


If in case you have an iPhone and occur to be a fan or energetic participant of Solana’s methods and apps, chances are you’ll really feel a way of deja vu once you use them individually at many moments.

Do Solana and iOS have lots in widespread? It simply looks as if a hunch. Nonetheless, after analyzing and evaluating the 2 rigorously from the historic and present views, I acquired an astonishing discovering: the earlier instinct could also be extremely near some sort of fact. Furthermore, a daring prediction got here to my thoughts: in the future sooner or later, Solana could develop into the iOS within the encrypted world.

In my opinion, though iOS and Solana belong to the Web and encrypted worlds, respectively, they share the identical logic of the primary precept that helps their improvement.(The next conclusions had been collectively organized by CGV FOF analysis group.)

Firstly, the final word consumer expertise.

Person expertise, because the core competitiveness of a product, has been talked about repeatedly. As a result of Apple’s relentless efforts for the final word consumer expertise, iOS appears to be all the time smoother than Android.

Digital keyboard was not created by iPhone. Microsoft, Palm, and different smartphone producers have tried to advertise smartphones with the complete contact display, however iPhone overcame the technical difficulties in capacitive contact display, multi-touch, bettering the display contact expertise to an untouchable stage.

As an illustration, iOS offers first precedence for display response, and it responds to Contact—Media—Service—Core structure so as. Merely put, when the consumer touches the display, the system will first deal with the display show (Contact); whereas the precedence response stage of Android is Utility—Framework—Library—Kernel structure, and display-related graphics and picture processing (Library) are solely within the third stage. There are a bunch of comparable components, which straight trigger an enormous distinction in consumer expertise between iOS and Android.

Equally, though Solana is just not the primary underlying public chain, it has attracted an growing variety of crypto builders and customers by offering extraordinarily excessive TPS and low transaction charges, breaking by way of the largest improvement constraint that almost all public chains face in the identical interval.

Efficiency comparability between Solana and different mainstream public chains

Knowledge supply: RareLiquid

As an illustration, Solana can cope with over 50,000 transactions per second whereas sustaining a block time of 400 milliseconds, and enhance the TPS based mostly on Moore’s Regulation, thus offering an excellent “predictability” of TPS scaling. Moreover, Solana’s low transaction charges are spectacular, that’s, estimated $10 for 1 million transactions.

Amongst them, Solana’s core consensus mechanism is “Proof of Historical past (PoH)”, which goals to unravel the time drawback in a distributed community that lacks a single dependable time supply. Through the use of a verifiable delay perform, PoH permits every node to generate timestamps domestically through SHA256 calculations, which improves total community effectivity by eliminating the necessity to broadcast timestamps throughout the time community.

The consumer expertise of public chains could be mirrored by the variety of crypto wallets and the frequency of use. Take Phantom, one of the crucial standard wallets on Solana, for instance, it virtually integrates all of the options of the Solana ecosystem, together with token swaps, assortment of NFTs and collectibles, connection to {hardware} wallets, anti-monitoring, help, and the obtainment of incomes by way of pledging SOL.

Solana Phantom & Ethereum Metamask month-to-month energetic customers

Knowledge supply: Grayscale Constructing Blocks

Counting on the superb one-stop expertise, Phantom has develop into the popular pockets for the customers of Solana, with the month-to-month energetic customers exceeding 1.2 million. In the course of the two months from August to October 2021, the customers of Solana on Phantom elevated by 5 instances.

Secondly, glorious UI design.

The consumer interface (UI), as a human-computer interplay window for providing varied capabilities required by customers, determines whether or not the software program or product is intuitive for customers to function.

iOS has a good system for platform UI design specs. From buttons to icon types, and from picture dimension to decision, all of them require particular customization. On this means, it not solely unifies the types of varied packages but in addition helps customers to get accustomed to the way in which of utilizing iOS software program. These days, the rounded rectangular design, with just one button on the entrance and the remainder utterly coated by a glass panel, has develop into the long-lasting design of the iPhone.

The mission group ought to take note of UI design whether or not within the area of Web, blockchain, or encryption. In addition to, a “user-oriented” UI design will make the product extra standard and promote higher. Dr. Nielsen, an knowledgeable in human-computer interplay, claimed that usability is a prerequisite for survival within the area of the Web. If a web site is tough to make use of, then customers will instantly abandon it.

Some individuals say that once they purchase tokens, they solely have a look at the brand of the mission. Although only a joke, it illustrates the significance of the visible design of the mission. The emblem of Solana reveals that its group that pays consideration to particulars and has good aesthetic expertise.

The emblem shade of Solana is a gradient from inexperienced to purple. Comparable colours could be present in nature, such because the aurora borealis, mysterious and chic. As well as, many cyberpunk-themed sci-fi films usually use purple, inexperienced, and blue of their pictures, reflecting the prospects of Solana’s progressive blockchain expertise improvement.

Solana ecosystem (DeFi fields)

Knowledge supply: Solanians

Many Solana initiatives, at first look, appear to be designed by the identical designer, with a really constant expertise by way of shade matching, interface design, and interplay design. The interface is intuitive, concise, and simple to function. Customers can simply function Solana with out a lot coaching, as they will perceive the capabilities on the interface at a look after utilizing the software program.

In line with CGV FOF, On a well known Solana IDO platform, the UI efficiency of a mission is given a excessive evaluation precedence when reviewing the mission. Plainly Solana improves customers’ acceptance of Solana from the highest down by way of its incubation and help of initiatives with excellent UI.

Thirdly, robust ecological help.

Primarily based on the second legislation of thermodynamics, remoted methods haven’t any vitality change with the surroundings and all the time change spontaneously within the path of accelerating dysfunction (entropy), i.e., the precept of enhance of entropy. In view of this phenomenon, Prigogine, winner of The Nobel Prize in chemistry, proposed that the system have to be open to transferring from a disordered state to an ordered construction, that’s, the system should change matter and vitality with the surface world.

The opening of the enterprise ecosystem requires core firms to allow companions to have entry to their assets and capabilities, appeal to them to affix the ecosystem, and obtain worth co-creation by way of mutual empowerment.

Since its inception, Apple has hooked up nice significance to exterior empowerment, offering exterior builders with highly effective improvement kits and permitting them to attach customers by way of the app retailer, thus giving delivery to a lot of standard apps resembling Instagram, Snapchat, Uber, and WhatsApp. In contrast with different platforms, Apple’s launch mechanism for builders’ apps is fairer and extra affordable. The obtain rating information on the software program retailer is true and dependable, which has created an excellent competitors system and surroundings for builders, making builders grasp an correct understanding of what their customers actually need.

Solana has additionally devoted a substantial amount of effort to ecological development. Solana has a long-term funding plan to offer glorious initiatives with a full vary of useful resource help, together with focused funding, VC referrals, technical help, recruitment help, advertising, and authorized assets.

Improvement of Solana and different mainstream public chains for energetic builders

Knowledge supply: Santiment

Take the hackathon for instance. In 2021, Solana formally held three world hackathons. The newest hackathon, with a prize pool of $1 million, over 15,000 registrants, and greater than 300 initiatives submitted by builders the world over, attracted the eye and help of a bunch of builders and generated a sequence of high quality Solana native apps.

Moreover, it’s value noting that 90-95% of the hackathon builders expressed their willingness to hold out long-term improvement on Solana. These proficient builders will always energy the Solana ecosystem.

Fourthly, a captivating soul determine.

It might be a bit radical to say that Steve Jobs, the founding father of Apple, modified the world, however it’s honest to say that he was synonymous with the “spirit of innovation” pursued by america and all mankind.

Jobs was an enormous standing on the intersection of expertise and humanities. His mixture of idealism and perfectionism enabled Apple to take a very completely different route from the standard business.

Take simplicity for instance, Steve Jobs’ love of minimalism and his publicity to Buddhism, “let individuals straight know their coronary heart with out phrases”, exerted an ideal affect on Apple’s “no button” design. Along with pursuing minimalism in product design, Jobs took the initiative to get rid of many product strains and solely launched 1-2 merchandise every year, with the highest quality.

For my part, Jobs was to Apple what Sam Bankman-Fried (SBF) is to Solana. I don’t imply to disclaim Solana’s unbelievable group, which is simply as revered as Apple’s tens of 1000’s of proficient engineers and improvement groups.

SBF was positioned on Forbes’s record of the richest individuals on the planet 2021

Knowledge supply: Forbes

Initially, SBF was a dealer and spent his early days at Jane Avenue, a quantitative large. He based Alameda Analysis (a quantitative buying and selling agency) and FTX (a centralized cryptocurrency change) with a group consisting of finance personnel—quantitative analysts, engineers, high-frequency merchants. They’re seldom involved with the centralization/decentralization debate and deal with the “large-scale enlargement of the blockchain”.

After leaving Jane Avenue in 2017, SBF took time to consider potential alternatives. He realized that “Cryptocurrency has many traits, it might be a really inefficient system, and there’s a nice demand for liquidity. That is principally: sudden enormous demand, very speedy development.” So, SBF tried to determine the final word resolution to those points. Later, he found Solana.

Anatoly Yakovenko, a co-founder of Solana, as soon as described the scene of SBF’s first contact with Solana earlier than it was launched on the mainnet in 2019: In the course of the check, 80 transactions had been processed in a mean of 4.02 seconds. This outcome impressed SBF. After speaking with the group and realizing Solana’s enormous improvement potential, SBF instantly determined to ascertain Serum (a decentralized derivatives change) based mostly on the Solana.

On this means, Solana not solely gained a brand new utility mission but in addition acquired an ideal encryption spokesperson (similar to NBA acquired James). From that day onwards, Solana was reinvented by SBF.

In January 2021, SBF mentioned on Twitter that, “I’ll purchase as a lot SOL as you might have, proper now, at $3. Promote me all you need.” Although a joke, it revealed that SBF had excessive hopes for SOL.

Fifthly, a passionate fan base.

I nonetheless keep in mind that in these days, iPhone followers lined up in entrance of the shop all night time to purchase a brand new technology of iPhone, hoping to be among the many first to personal the brand new iPhone, simply as they wished to get tickets to a famous person live performance.

The iPhone launched by Apple yearly is just not solely a brand new product but in addition a brand-new cultural phenomenon. This can be a market impact that no different firm is prone to have when launching a brand new product.

Taking the variety of Twitter followers for instance, in line with statistics from CGV FOF, Solana has as many as 1.1 million followers, which isn’t as many as that of Ethereum (1.97 million) however ranks first amongst different mainstream public chains, Polkadot (1.01 million), Avalanche (450,000), Fantom (270,000), and Close to (230,000).

Let’s check out the fan token, Solana’s meme coin is Samoyedcoin ($SAMO). It was impressed by Dogecoin, Sam Bankman-Fried (containing the letters S, A, and M), and Solana’s co-founder Anatoly Yakovenko (whose hometown is the birthplace of the Samoyed canine). These days, SAMO has develop into the mascot and promotion ambassador of the Solana ecosystem, and the height circulation market worth of SAMO’s token exceeded $700 million.

Within the Solana group, you’ll be able to usually really feel a very completely different environment from some other public chain group. We frequently see the “fierce quarrel” between ETH diehards and Solana diehards. It’s utterly completely different from the peaceable and joyful environment of the Close to, Avalanche, and Fantom communities. This can be the value Solana pays for selecting to take a special path from the ETH (EVM).

It might be a stretch to attract an analogy between Solana and iOS from the above dimensions. Some persons are nonetheless criticizing the current instability of the Solana community. However in the long term, by way of community improve, enlargement of service nodes, and adjustment of incentive mechanism, these points will develop into an episode within the improvement means of Solana.

In reality, Apple’s rise didn’t occur in a single day however was accompanied by a number of necessary turning factors that established Apple’s standing as king.

For instance, iPhone Four was an epoch-making product that made breakthroughs in {hardware}, software program, and design. It was the primary cellphone that used the industrial retina display, accomplished the twin evolution of cellphone digital camera {hardware} and algorithms, featured probably the most traditional form, and used iPhone self-developed chips…

In cosmology, the large bang, generated by a singularity, gave delivery to the universe we’re aware of. The singularity is a vital turning level in historical past. The delivery of iPhone4 is a singularity in Apple’s improvement historical past, permitting Apple to embark on a speedy improvement path.

I attempt to record a number of singularities to foretell Solana’s imaginative and prescient of changing into the iOS within the encrypted world:

——The variety of C-end customers exceeds 100 million. On November 7, 2021, the variety of energetic customers of Solana’s Phantom pockets amounted to 1 million. It looks as if an enormous leap from 1 million to 100 million. Nonetheless, the exponential impact of the expansion of the encrypted world community will velocity up the method significantly. Anatoly Yakovenko, a co-founder of Solana, held a extra constructive opinion. He has repeatedly acknowledged that with the launch and operation of latest applied sciences, Solana’s subsequent aim is to “appeal to one billion customers.” You recognize, the variety of VISA customers worldwide exceeded Three billion as early as 2018.

—— Over 80% of the transactions are carried out by institutional customers. The participation of extra institutional customers within the encrypted market will appeal to extra capital. The bull market in 2021 is pushed by establishments. Many establishments, resembling Tesla, Microstrategy, Grayscale, and the ARK based by Catherine Wooden, have entered the encrypted market one after one other. SBF deems that the crypto sector pushed primarily by potential institutional funding is prone to develop within the subsequent 5 years. For my part, in line with the Pareto precept (80/20 rule), if institutional customers develop into the principle power of the Solana market, and if their buying and selling quantity accounts for greater than 80% of the overall quantity, Solana will usher in a brand new spherical of improvement.

——Over a 3rd of Ethereum initiatives migrate to Solana. In June of this yr, Neon Labs, a cross-chain bridge between Ethereum and Solana, was launched. Neon permits anybody to run Ether good contracts on the Solana blockchain, making it simpler for builders to construct packages that work on each blockchains. It could be an thrilling time if greater than one-third of the initiatives which have been deployed and developed on Ethereum are concurrently constructing purposes on Solana.

 ——Solana’s complete market capitalization reaches 50% of Ethereum’s. SBF reckons that Solana’s distinctive underlying expertise for creating the DeFi protocol will drive a spike within the value of its SOL tokens. He even believes that Solana can surpass Ether as the most important decentralized monetary platform. Ethereum’s present market worth (about $470 billion) remains to be practically eight instances that of Solana (about $55 billion). If Solana reaches 50% of Ethereum’s market worth, it is going to be an necessary milestone within the improvement of Solana.

The singularities of Solana ecological improvement (forecast)

Will Solana develop into the iOS within the encrypted world? In all probability nothing.

I very a lot agree with Kyle Samani, managing accomplice of Multicoin Capital, “I believe we’re going to see two issues [Solana and Ethereum] coexist. Now we have iOS, we have now Android. And, right now, everybody is aware of it’s a must to construct an iPhone app and an Android app.”

Maybe, within the close to future, Solana and Ethereum could develop into encrypted world’s iOS and Android, respectively. Thankfully, we’re all witnesses and participators of this nice change.

Observe: This paper is a CGV FOF Analysis Report and doesn’t represent any funding ideas. It’s for reference solely.

 About CGV FOF: the Grasp fund from Asia, composed of household funds resembling Japan, Korea, Chinese language mainland and Taiwan, and focuses on investing in Crypto Fund and Crypto Studio. CGV FOF is headquartered in Japan and has branches in Singapore and Canada.


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