Solana Ecosystem Segment Leader Analysis Report: Which Potential Projects Are Worth Noticing?
Currently, from the perspective of various fields such as DeFi, NFT, and Web3, most Sol projects contribute relatively little to the overall track, and their market share is generally average.Author: D-Tiger Research Institute
Preface
To meet the needs of blockchain users, public chains, heterogeneous chains, and parallel chains have emerged one after another. Solana not only "broke through" but also leaped to become a very prominent public chain. The explosive growth of the Solana ecosystem occurred in the second half of 2021, during which its governance token $SOL saw a price increase of up to a hundred times, and Dapps in the ecosystem sprang up like mushrooms after rain, covering tracks such as DeFi, NFTs, and infrastructure, striving to build an integrated Solana ecosystem.
However, the subsequent change in tracks caused Solana, which had initially exploded in the public chain field, to be slightly quiet for a period of time, until recently when the core of the Game-Fi track, "Play-to-Earn," was inherited and transformed into the core model of "Move-to-Earn" by a project in the Solana ecosystem called StepN (a sports-related blockchain game). By accumulating a large number of users and popularity, it captured the favor of well-known institutions, such as Binance Labs, once again achieving the explosive breakout of Game-Fi projects.
As the public chain platform that incubated the StepN blockchain game, Solana has once again stood in the spotlight of institutional and user attention. Today, let's analyze and review: What other potential projects worth paying attention to are there in the Solana ecosystem?
As of April 20, there are a total of 301 DeFi projects on Solana, with a total locked value exceeding $11 billion and a 24-hour trading volume of approximately $430 million. This indicates that Solana has a certain user market and can occupy a certain position in the public chain track, especially in the DeFi sector. Moreover, data shows that on-chain transaction fees are low, with the average transaction fee fluctuating around $0.18.
1. DeFi Track
According to statistics from Defilama, as of April 20, 2022, the total locked value of DeFi on Solana was $5.01 billion, ranking fifth overall among blockchains, with the top four being Ethereum, Terra, BSC, and Avalanche. The distribution of locked value among DeFi projects on Solana is relatively even; even the highest proportion project, Marinade, accounts for only 15.23% of the total. Additionally, it is worth noting that the overall locked value of Solana has maintained its current level since dropping from the end of last year.
1. Orca
Orca is a DEX located on the Solana blockchain, focusing on basic decentralized exchange functions such as token trading and liquidity provision. It raised $18 million in Series A funding led by Polychain Capital last September. Its token, ORCA, was launched in August 2021, with some airdropped to previous liquidity providers and trading users to incentivize new users and reward old ones.
1.1 Basic Data
The above image shows the change in total locked value of Orca DEX from its inception to now. Currently, Orca's locked value ranks seventh in the Solana ecosystem at $407.16 million, down to about a quarter of its peak.
Currently, Orca's locked value is $415.82 million, ranking seventh in the Solana ecosystem. The growth rate of Orca's daily trading volume is also surprisingly high. As of April 20, 2022, Orca's total trading volume was 129,328, with a year-on-year growth rate of 363% compared to a month ago, and there has not yet been a significant downward trend.
The number of daily active users on Orca is proportional to the number of successful trades per day. On the 21st, the number of users was 71,749. However, the more users there are, the higher the daily trading volume, and vice versa. It is worth noting that although the locked value is slowly recovering, these data indicate that Orca is developing positively in all aspects, and if maintained, it is likely to achieve breakthroughs in the future.
1.2 Team Information
The core team of Orca consists of 11 members, with two co-founders, Yutaro Mori and Grace Kwan, leading the development and strategy teams, respectively. Yutaro is a seasoned cryptocurrency developer who has participated in the development of the ETH 2.0 Golang client and synthetic asset UMA. The Orca development team has six developers, most of whom graduated from renowned computer science institutions like Stanford and the University of Waterloo, and have worked at Amazon or Google, indicating a strong level of professionalism. The strategy team has also worked at top consulting and design firms.
1.3 Economic Model
ORCA launched its governance token, $ORCA, on August 9, 2021, with an initial circulating supply of 5.25 million and a total supply of 100 million.
ORCA value orientation:
The ORCA token is linked to trading activities on the platform, with most flowing to LPs to promote a healthy AMM ecosystem.
The Orca Treasury is a DAO aimed at functional development, token buybacks, or opening new markets.
The fund will donate 0.01% of all trading fees to real-world charities on a quarterly basis.
1.4 Advantages
- As a rising star in the DEX sector of the Solana ecosystem, Orca's reward model provides shares to liquidity providers, charging a 0.3% fee that is deposited into the pool and distributed proportionally according to shares. Over time, users will accumulate more liquidity tokens (storage + rewards).
- Orca offers users an extremely high level of friendliness, leveraging Solana's outstanding performance to enable transactions on Orca to be described as sub-second, providing a smooth trading experience with a fast and smooth front-end response.
- When users trade on Orca, it uses different curves to ensure maximum utilization of funds and reduce slippage. At the same time, Orca's fair price indicator allows users to see the optimal market price at a glance, thereby protecting users' interests.
1.5 Summary
As a DeFi protocol with comprehensive functionality and relatively high staking rates, Orca is a good choice for users who prefer stable returns and are unwilling to take risks. Currently, the annual interest rates for liquidity staking provided by aquafarm on Orca are in the medium to high range, with stable SOL and USDC annual interest rates also at 36%. Additionally, the project team frequently updates dynamically, recently launching governance voting features and collaborating with projects like Afaltoun and Soda Protocol.
2. Saber
Saber is an automated market maker optimized for trading pegged assets on Solana. As a core cross-chain liquidity network for Solana, Saber helps facilitate asset transfers between Solana and other blockchains. According to previous reports, SaberLabs raised $7.7 million in seed funding, led by Race Capital, with participation from well-known institutions like Jump and Multicoin.
2.1 Basic Data
Saber achieved significant growth shortly after its launch, with its TVL growing from 0 to $1 billion within the first three months. Its peak locked value was $4.15 billion on September 12, 2021, but the good times did not last long. With the explosive growth of other public chain ecosystems, competition within Solana's DeFi sector became more intense, leading to a continuous decline in its total locked value.
As of April 2022, Saber held $367 million in liquidity in its liquidity pools and facilitated over $37 million in swap trading volume daily. Its most liquid mining pools include mSOL-SOL, UST-USDC, and UXD-USDC.
Saber's competitive advantage lies in the number of assets it supports, similar to Curve based on EVM. It provides LPs with a way to earn yields while minimizing the risk of impermanent loss, attracting a large number of users in a short period.
2.2 Team Information
The founding team has been building crypto projects together since 2017. In 2018, the team launched a crypto fund management platform supported by Y Combinator and Coinbase. They also helped organize the first DeFi community events in San Francisco and Prague. The Saber team has experience delivering products at some of the largest tech companies, including Facebook, Google, Coinbase, and OKEx.
2.3 Economic Model
The maximum supply of SBR is 10 billion, with the following distribution ratio:
1% of the total token supply will be distributed in the first two weeks of the liquidity mining program to ensure voting rights are granted to actual users and help adjust liquidity provision incentives.
The two main use cases for $SBR are: development of Saber and adjustment of the fee model; adjusting incentives among stakeholders.
2.4 Advantages
- Saber aims to become a trading platform for large volumes and low risk by providing the most accurate prices (encouraging arbitrage bots to trade) while collaborating with other DeFi projects to reduce the opportunity cost for users.
- Saber can achieve low slippage trading of pegged assets even in large trades, allowing users to pay extremely low fees for large exchanges between stablecoins.
- Saber facilitates exchanges between pegged assets bridged from other blockchains. Through Saber, users can easily migrate assets to the Solana chain. The more assets supported, the more prosperous the Solana public chain becomes, further promoting the development of Saber, thus forming a positive cycle.
2.5 Summary
The current cryptocurrency market is in a downward trend, with most investors converting cryptocurrencies into stablecoins. Holding stablecoins is a risk management strategy to hedge against economic downturns. Idle stablecoins forming LP for liquidity mining is highly cost-effective, with LP's APY in Saber ranging from 8% to 92%, and the value fluctuations of SBR stablecoins are minimal and can be ignored. Therefore, stablecoin LPs can effectively avoid impermanent loss while enjoying decent mining rewards and fee sharing. However, it should be noted that some LPs in Saber have high withdrawal fees, such as USDT/USDC, which charges a 5% fee for withdrawal, meaning withdrawing before recovering this fee would result in a loss, so please read the rules carefully before proceeding.
2. NFT Trading Platforms
On April 7, 2022, the largest NFT trading platform, Opensea, announced it would integrate and deploy on the Solana chain. NFTs minted on the Solana blockchain can now be traded on OpenSea, with Solana-centric projects listed and priced in $SOL.
According to data statistics and various comparisons, the number of NFT trading markets in the Solana ecosystem has fluctuated significantly in recent months. Despite being affected by the volatility of the NFT market, it still showed a cliff-like growth from March 27 to April 3, with market capitalization soaring. In March, Solana's NFT trading volume also exceeded $190 million, and as of April 21, 2022, the total trading volume of Solana's NFT market reached $1.93 billion, ranking No. 3 among public chains, securing a place in the public chain NFT track.
3. Metaplex
Metaplex is an NFT marketplace and decentralized NFT minting and auction protocol. Supported by the Solana blockchain, it meets Metaplex's high operational requirements for transaction speed, frequency, and network fees.
The Metaplex protocol and application framework provide key infrastructure for the metaverse, offering creators, artists, and brands tools to easily launch customized, community-facing NFT marketplaces. Through decentralized auctions, Metaplex transforms creators into traditional intermediaries.
3.1 Basic Data
Trading Volume
As of April 22, 2022, the total trading volume on the Metaplex platform was $2.2 billion. According to data statistics, Metaplex's trading volume is relatively low, with the highest daily trading volume in the last 30 days being 2000 $SOL, approximately $204,000 in trading volume, which is not outstanding among NFT trading platforms. The highest daily trading volume in the last 30 days was about 1,500 transactions, with a total trading volume of 25,885. After that, it showed a continuous decline, keeping daily data below 1000, with a relatively low market share of 0.1%-0.7% in the Solana ecosystem compared to other NFT markets.
User Count
Due to the advantages of fast and low-cost transactions provided by the Solana network, Metaplex is very attentive to user experience, continuously introducing new measures to retain user activity. Nevertheless, during periods of market downturn, Metaplex, with a smaller market share, struggles to compete with others in the same track. As of April 22, 2022, the total user count in the last 30 days was only 6,579, which is quite disappointing.
Fees
The platform charges a fee of 0, and as of the time of writing, the cost of minting a new NFT is about $1.5. As a creator, uploading an NFT to Arweave takes 1 minute, and auctioning an NFT costs around $3.7. The cost of selling "limited edition NFTs" is relatively high, ranging from $9 to $16. Listing NFTs and auctioning them may cost around $30. Overall, the fees are relatively cheap.
3.2 Comparison
Metaplex Studios has now appointed Stephen Hess as its CEO.
- Metaplex creates revenue streams for artists on-chain by recording each participant and setting custom revenue percentages. Each NFT not only generates through royalties but also automatically returns royalties to the original creator when resold on the Metaplex marketplace.
- Metaplex's components allow NFT creators and buyers to customize exclusive "store pages," which can serve as permanent storefronts or auction centers for specific auctions or collections, with all identifiers on the storefront based on the user's wallet address. Custom storefronts allow creators to create unique experiences in each auction, and in the future, the Metaplex Foundation will use VR/AR technology to establish immersive storefronts.
- Metaplex has attracted interest from various industries and related brands, allowing users to auction music NFTs from Audius, as well as collaborations with comic artists and sports brands, such as Street Dreams, CryptoKickers, and influential figures and brands like recording artist Andre Allen Anjos.
3.3 Summary
On January 18, 2022, Multicoin Capital and Jump Crypto co-led a $43 million strategic investment in Metaplex, with support from 90 investors including Solana Ventures and Alameda Research, aimed at creating over 5.7 million NFTs for 85,000 projects, indirectly confirming Metaplex's strong potential. As it develops standardized specifications and promotes its use through modular products and plans, Metaplex becomes the foundational layer for all value exchanged in NFT form. As more assets and applications use the Metaplex standard deployed on Solana, we will begin to see certain parts of the metaverse form as a large-scale, interoperable world.
4. Solanart
Compared to the role of Opensea on Ethereum, Solanart, the first mature and complete NFT trading platform, is deployed on the Solana chain, using SOL as the trading currency and charging a 3% fee. It helps users on the Solana chain easily and quickly showcase/trade digital collectibles and artists' NFTs.
4.1 Basic Data
Trading Volume
According to DappRadar data, the highest daily trading volume on August 31, 2021, reached $29.98 million, setting a historical record. As of April 22, 2022, the total trading volume in the last 30 days reached $25.57 million. Daily trading volume has also shown a downward trend since February, with a total of only 181,515 transactions in the last 30 days, leading Solanart back into a bottleneck phase.
User Count
Data shows that on October 8, 2021, the user count reached a historical high of about 23,180 active users. As of April 22, 2022, the total user count in the last 30 days reached 29,988. Affected by the NFT market conditions, the user count on the Solanart platform has been continuously decreasing since February 1, 2022, with daily user counts showing a persistent downward trend.
Fees
A market fee of 3% is charged on each transaction.
4.2 Comparison
- Unlike Opensea, the variety of NFTs on the Solanart platform is relatively limited. This is because the launched NFT projects are carefully selected and have a certain level of assurance, leading to higher quality and value of NFTs.
- The Solanart platform uses both on-chain and off-chain data storage, transferring cryptocurrencies and NFTs into an intermediary wallet before individually transferring them to buyers and sellers, while utilizing off-chain data to record pricing and sales information.
- As the first mainstream NFT platform on Solana, veteran NFTs like Degent Ape Academy and SolPunks are listed on its platform, and the homepage is about to feature some future projects with a clear structure, a clean interface, and simple operations.
4.3 Summary
The Solanart platform differs from traditional Opensea in that all NFT collectibles on this platform are carefully selected, but this also results in a relatively limited number of NFTs available for selection. Additionally, if users want to purchase NFTs on the Solanart platform, they must download a wallet that supports the Solana blockchain. To some extent, this sets a barrier to user participation. Furthermore, Solanart's total trading volume surpassed $500 million in October 2021, continuing to rise and setting a historical high, indicating that the platform has its traffic and fan base. As a relatively mature NFT trading market on the Solana chain, we look forward to its future development space for foundational settings and functions.
3. WEB3.0 Track
With the development of blockchain, the concept of Web3.0 is gaining increasing popularity. Compared to Web2.0, Web3.0 resembles a platform network world that does not require centralized servers, alleviating concerns about privacy data theft, and is fairer, more transparent, and more stable than centralized networks. Although blockchain technology has promoted the development of Web3.0, current blockchain products possess some characteristics of Web3.0, such as decentralization, immutability of information, and unified identity.
The Solana network, based on the PoH consensus mechanism, uses a separate node network for state data storage. The public chain characteristics of Solana give it a unique advantage in the Web 3.0 track: high throughput, low fees, decentralized network security, and data ownership by users, which mitigates the possibility of data being subjected to centralized platform regulation. From nothing to something, the Solana blockchain continues to break through itself and has attracted hundreds of quality Web3 projects to join, with Solana's Web 3.0 application scenarios increasingly recognized by developers.
In addition, Solana's Web3.0 ecosystem layout has expanded to include instant messaging tools, decentralized social platforms, on-chain security protocols, streaming platforms, advertising platforms, etc. It is believed that more Web3.0 projects will continue to flood into the Solana ecosystem in the future, aiming to jointly create the "Web3.0 era of Solana."
5. Audius
Audius is a decentralized music streaming platform supported by blockchain, equipped with social networking features to help artists and music content creators showcase their talents and build fan bases.
Audius is available on web, PC, and app platforms. Users can freely browse popular singles and playlists without logging in and listen to music immediately, making it convenient to use. After registering with an email, users can like/share singles and follow creators; as creators, they can upload music and add tags.
These features are all free, and users can download music for free without ads, providing a great user experience. Audius incentivizes through token distribution, attracting some creators in the early stages of the project and continuously inviting well-known KOLs to join, bringing early traffic to the platform.
5.1 Community Heat
Audius has integrated many well-known stars and music producers, such as Deadmau5, Rezz, 3LAU, and The Stafford, and the team is continuously promoting the project and collaborating with other singers to hold community events, such as the recent Remix contest music creation rewards, an AMA with Collie Buddz, and a live event for "Alone With You" by alinabaraz on the Audius platform. Audius's construction of a music ecosystem has gradually led to the platform's prosperity.
As of April 21, 2022, Audius had 134,141 active users on the platform, with 2,744,759 monthly active users. Compared to the peak of nearly 5 million in October last year, there has been a decline in popularity. However, with the continuous expansion of songs and producers on the platform, the overall project popularity is also on the rise, likely to return to its peak in the coming months. Overall, the advantages of this platform compared to Web2.0 projects include but are not limited to the following points:
- Addressing the low income of artists and the low transparency of artworks.
- Protecting artists' copyrights.
- Providing a decentralized and low-threshold user experience, with an open API for third-party apps to call songs, making music sharing more convenient. However, this direction of development towards sharing also poses obstacles to compliance and commercialization.
This is why more and more artists and creators who cherish their copyrights choose to participate in Audius and other Web3.0 fields. In the past, a small number of power concentrators held most of the resources and wealth, leaving individuals lacking platforms and opportunities for creation. In the future, Audius will gather more capable and creative individuals, and more users will participate in building Web3.0.
5.2 Economic Model (Function)
$AUDIO is the official token of the Audius project, with a total supply of 1 billion, launched in October 2020, with the following specific distribution:
It is worth mentioning that AUDIO has an annual token inflation of 7% to reward users who stake tokens, helping to maintain the stability of the project's value.
The above image shows the token release schedule for Audius. In 2022 and 2023, most token releases will come from investment institutions, teams, and advisors, while community token releases will be delayed. This is unfavorable for project development, as a large number of token releases can easily create selling pressure that undermines user interests, posing risks that could lead to project collapse.
The main functions of the $AUDIO token include:
- Incentivizing users to participate in node operations, with token rewards related to node operation, and staking tokens to enhance the security of nodes and maintain decentralized file storage.
- Participating in community governance rights, engaging in Audius community governance by initiating discussions in the community or formally proposing from node operations, then voted on by token holders.
- Participating in the platform's economic system, serving as an incentive token for users to gain corresponding benefits on the platform. Currently, it still lacks unique designs, and more layers are still under development.
5.3 Summary
Audius is still a niche dapp for electronic music, providing new users with an extremely low entry barrier due to its free and no-chain features. However, the current economic model and token empowerment still need development. Apart from basic node staking and participation in governance voting, it lacks incentive functions, and its business model is not yet clear, leaving creators without revenue means. Users can participate early to obtain corresponding interaction records and engage in related activities to experience the balance of relationships among various participating groups, such as users, creators, and developers in the Web3.0 project, achieving a vision of joint governance and mutual prosperity.
6. Grapes
GRAPE is a protocol for building token-based DAO communities on the Solana blockchain, a decentralized social network protocol that leverages the power of Solana to create, reward, and protect any online community. The project won second place in the Solana hackathon competition last year and subsequently raised $1.2 million in seed funding led by Multichain Capital in September. The project token $GRAPE is a currency that powers the Great Ape social ecosystem. Currently, Grape has developed a series of sub-products, including Grape Access verification tools, Grape Dashboard, and Grape.art NFT marketplace.
6.1 Community Heat
Grape recently announced its 2022 technical roadmap, encouraging participation from other developers through open-source unlocking using tokens, moving away from centralized Web2.0 methods. Additionally, the Grape Protocol updated its applicable range in April, collaborating with many other projects such as Mango Markets, Project Serum, Bonfida, UXD Protocol, Woof Solana, and Le DAO, providing related software development kits. It has also held DAO communication activities, AMAs, and Grape on-chain governance proposals.
It can be said that the team has recently done a lot in terms of technical and promotional aspects. However, since it is not possible to view the participating users of the protocol, observations can only be made through the community, but the results may not be entirely accurate. The Grape protocol community includes Twitter, Discord, Twitch, and promotional media like Medium. Currently, the total number of followers on Twitter is around 34,000, with nearly 30,000 total members on Discord, and daily active users around 5,000, indicating that its popularity is not low. Furthermore, the community rules are relatively complete, requiring strict verification mechanisms for participation, effectively reducing the number of fake followers.
The main goal of the Grape protocol is to create a decentralized social network toolkit based on the Solana blockchain ecosystem. Its unique advantages include:
- Ensuring individual user membership solutions through unique cryptographic keys, which is also the core, providing "game skins" that can be used to prove user identity.
- Multi-token model, the GRAPE protocol supports all types of Solana tokens, allowing the use of SPL tokens, token pairs, and LP liquidity tokens to set up personal protocols, with prices intelligently adjusted based on the scheme.
- Community-driven DAO, decentralized anonymous organizations are more suitable for the construction of the GRAPE protocol. Additionally, when the network is attacked, it can restore the community through social accounts and permissions.
This protocol is guided by the principle of community first, with transparency, fairness, and excellence at its core values. Grape DAO is the governing body of the protocol's decentralized community.
6.2 Economic Model
The Grape protocol token is GRAPE, with a total issuance of 1,000,000,000 tokens, with the following specific distribution:
The locking mechanism is also very clear, with IDO directly releasing without locking, while the team and private placements are locked for four years to two years, and community ecological token releases are divided into ten monthly linear releases. From the above image, it can be seen that the community holds a larger share of tokens compared to the team and private placements, and the early releases are more balanced, positively impacting the maintenance of token value.
Currently, the GRAPE token lacks practical functions, mainly used for DAO governance and participation thresholds, lacking a clear business plan. This has led to a continuous decline in the GRAPE token, with the current price at $0.013 and a total market cap of less than 1 million. Therefore, not all projects that issue tokens produce better effects than those that do not. For infrastructure, tokens without practical uses will not drive ecosystem development but may instead lead to a loss of investor confidence in the project.
6.3 Summary
As a DAO infrastructure development protocol, Grape builds complete and systematic rules from the ground up, clarifying the rights and obligations assigned to each identity. It aims to combine with other project communities for autonomous DAO governance. Previously, Betdex used the Grape protocol as its underlying verification, indirectly demonstrating its practicality and potential. In the future, projects with sufficiently complete frameworks that align with decentralized management concepts in the Web3 field will inevitably lead the entire ecosystem's future direction. However, how to balance the development of tokens and projects and empower practical functions will also have corresponding impacts on Grape's future direction. Nevertheless, as a relatively complete Web3.0 DAO organization, Grape's future potential is worth looking forward to.
Conclusion
The Solana ecosystem has a wide variety of distribution tracks and fierce competition, with many innovative ideas but lacking practical implementation. Currently, apart from StepN, there are almost no projects from Solana that have truly exploded into the mainstream. The lack of opportunities and cross-chain projects has led to Solana's overall popularity gradually falling behind other public chains. From the perspectives of DeFi, NFTs, and Web3, most Solana projects contribute relatively little to the overall track and generally hold a small market share.
However, this does not mean that Solana lacks opportunities. From another perspective, the projects nurtured in the Web3.0 field of Solana possess sufficiently unique functional innovations and certain practicality. The overall DeFi ecosystem is also not bad, currently ranking as the fifth-largest public chain. If Solana wants to return to its peak, it needs to balance the roles and responsibilities between the public chain and the ecosystem and create synergistic effects with other chains to generate more value. In summary, any project that remains unchanged will not succeed. It is hoped that in the future, Solana can create its own style and characteristics to bring more valuable assets to the entire blockchain ecosystem.
References
