Solana with its Proof of History consensus mechanism offers a fast speed and lower cost of the transaction. Consumer dapps on other chains were not user-friendly and convenient to use because of the slow network and high fees. Solana eliminated that challenge to a great extent and has been a preferred choice for builders. This piece attempts to analyze the growth of Solana both from a demand and supply side.
We deep dive into the significant Layer1 and analyze the last year in terms of
- How the user activity has been?
- Growth in the developer activity
- Hits and Misses
User Activity – Daily Fee Payers & Daily Signers
As of now, it is almost impossible to find unique users on a chain as each user may have multiple addresses. So we are considering the unique address activities with the metrics – Daily Fee Payers & Daily signers.
Daily Fee Payers refer to the accounts that signed and paid for a successful transaction. One of the most important metrics. Usually, an indicator of involved users as they are the ones who take the pain of paying the gas fees.
Daily Signers is another measure of usage of the chain. Any address that signed a successful transaction is considered. Whether the address paid the fee or not, if the transaction is successful it is counted as a daily signer.
(Caveats: The “Daily fee payers” does not take into consideration the centralized players who pay the fee on users’ behalf. To tackle this challenge we are considering the “Daily Signers” metric as well. The drawback of the daily signer metric is that it contains the transactions from the bots and programmatic activity as well. So to get a better approximate figure of usage, both the graphs are studied together.)
Souce: https://app.flipsidecrypto.com/dashboard/50JHjI
- Around April-July 2022 we can see the ratio of signers to fee payers increased significantly.
During this period, StepN, A web3 lifestyle app with Social-Fi and GameFi elements took off. StepN pays the gas fees on user’s behalf. So the number of signers increased but the number of fee payers did not follow the pattern.
- But in the period after that, we can see the number of signers has gone down drastically. This could be attributed to the crash of FTX. A difficult period for the Solana, there was speculation of the chain being dead as well.
- There was a revival in the activity towards the end of December. Bonk revived the user activity in Solana.
Much needed fun element when the environment was becoming negative and it lead to increased activity among the users
Source: https://app.flipsidecrypto.com/dashboard/m1fYiJ
Understanding how the developer ecosystems grew.
Why does developer growth matter?
The current macro environment may not be encouraging for retail users, but the Solana builders are continuing with their efforts to further strengthen the ecosystem.
Developer growth is a measure of the project’s strength. It tells about the builders and what chain they are building on. If Daily signers is the demand then the Developer activity is supply. Developer activity is one of the most important metrics for the growth potential of the chain. A chain with more developer activity can be expected to grow and survive. Basically, it gives more confidence in the chain.
Methodology to track the Solana developer activities?
One of the ways of tracking the developer activities of the ecosystem is the “Number of unique programs”. In Solana, smart contracts are called programs. These Programs are deployed on-chain and are needed to build the dapps on Solana.
There are 2 types of programs in Solana:
- Native programs – These programs are used for native activities like creating accounts, SOL transfer, Staking and Voting
- Solana program Library (SPL) – Allows to interact with tokens on Solana including NFTs. minting, transferring, burning, and querying.
In the Chart below, the number of unique programs for the last year which were deployed to main net is shown. For a program to be counted, it should have at least one successful transaction associated with it on a given day.
Source: https://app.flipsidecrypto.com/dashboard/50JHjI
The number of unique programs is growing over the months. After the first half of the year, the number has been consistently around 1100+, in spite of the crypto winter.
The FTX crash did reduce the deployed programs a bit as other dapps were also affected by the crash.
The most affected was Serum. However, the community decided to fork the compromised Serum to create Openbook. It led to the revival towards the beginning of the year 2023.
The builders are building without paying any attention to the noise and the ecosystem continues to grow.
Along with the programs, the number of developers in the Solana ecosystem has also increased. There are over 2000 developers contributing to the ecosystem. Compared to last year, the number of developers has seen a growth of 74%.
The developer are divided into 3 categories: full-time (committed code 10+ days/month), part-time (contributed code less than 10 days/month), one-time(contributed once in a rolling 3-month window)
Source: Electric Capital, https://www.developerreport.com/ecosystems/solana
Solana Core activity
During the crypto winter, Solana core developers have focused on improving network reliability and reducing the downtime during network congestion period. They have also focused on advancing Solana Pay and building QUIC to handle spam attacks on the Solana network.
Source: https://twitter.com/solana/status/1522643138418028546?lang=en
Resources for Developers
Solana faces stiff competition for not just getting users but for developers as well.
Solana has made it easy for developers to get started building on the platform. Solana has educational resources – videos, documentation, Developer portals – libraries, Other products for developers, Grants Programs, and Community Activities
The Grants Programs & Community Activities have been an important enabler for the builders.
Grants Programs
Grants play a role in the growth of the chain by attracting devs onto their chain.
Source: https://www.decentralised.co/p/grants-and-web3
The Solana Grants Program is focused on funding efforts to further censorship resistance on the Solana Network. And awarding grants to promising teams building projects ranging from protocol infrastructure to end-user applications.
The scope of the Solana Foundation Grants Programs consists of Funding and feedback on delivered milestones, Potential VC introductions, Technical support, Marketing help, and Design help
Grants have been a catalyst in accelerating the growth of the Solana ecosystem.
Conferences & Seminars
Solana has its official conference and hackathons around the globe along with many community-led efforts. The result has been a strong developer community
- Solana breakpoint – annually held the largest event of the Solana blockchain,
- There are other events as well like Solana Hacker Houses by Solana Foundation, to learn from the core and ecosystem developer, Solana Summer Camp – Online hackathon, and Solana U – Program for university students. learn rust and build new projects on the Solana ecosystem, Solana Riptide
Wins/challenges in the last 1 year
The Openbook’s story is one of the biggest wins of the ecosystem in the year. It showed the resilience among the ecosystem members who decided to fork Serum with community-led efforts.
Another landmark event across L1 has to be the launch of Saga, The web3-focused Android phone. The need for such a phone is aptly put by the cofounder of Solana. – “We didn’t see a single crypto feature at the Apple developer conference 13 years after Bitcoin was alive.” – Anatoly Yakovenko, Co-founder and CEO of Solana.
Few other wins in the year 2022
- Helium Network migrated to Solana over its own blockchain
- Alchemy a developer platform started support for Solana
- Jump Crypto announced an open-source validator client to increase throughput and resilience for the Solana network – Firedancer
- Solana announced they will work on supporting “move” for its smart contracts. Further strengthening the efforts to enable developers to get started easily
Solana faced a few challenges also
- There was a mobile wallet exploit. The exploit affected several wallets, including Slope and Phantom.
- Network halt: The halt was due to an anomalous consensus bug. 7-hour halt in May 2022
- The FTX crash caused panic among users questioning the very existence of the chain
Conclusion
Even in the bear markets the builders are building and are continuing their efforts to make Solana even better. But for the ecosystem to grow further, a combined effort of Devs, BD Team, Builders, Governments, and Educational institutions is needed.
These are not just technical advancements but they need to translate to business readiness.
There is adoption in consumers facing DeFi, and NFTs. But we need more consumer-facing dapps which are user-friendly.
The regulatory challenges have also hindered both the supply side and demand side. With uncertainty and difficulty in setting up a web3 entity, many builders have to either drop the idea or have moved to friendlier regions.
Even though many web3 is relatively still early, the overall ecosystem has matured. The hacks and failures have made the Solana ecosystem more robust.
Exciting times are ahead for the overall ecosystem!
Resources
Flipside Dashboards