In-depth Analysis of the Solana Ecosystem: A Comprehensive Explanation of Innovations and Breakthroughs in DePin

Author: BIKA Global Research Institute

Macro Market Data

Recent market data shows that Solana has performed exceptionally well in the decentralized exchange (DEX) space, with its trading volume surpassing that of Ethereum. This achievement highlights its status as a major player in the cryptocurrency market. Additionally, Solana's market capitalization and total value locked (TVL) in DEX also indicate the health and vitality of its ecosystem, according to DefiLlama data.
As of December 25, the TVL on Solana was approximately $1.479 billion, with stablecoins around $1.84 billion.
The number of monthly active addresses on the Solana network and the number of new addresses have both reached new highs for the year. Currently, the number of monthly active addresses on the Solana network in December has surpassed 15.6 million, an increase of about 50% compared to November. Furthermore, the number of new addresses in December reached 6.8 million, although the number of non-voting transactions in December was slightly lower than in November.
The Solana chain offers cheap, fast, and scalable solutions. Developers focus on building applications rather than scaling technology. Although there is some overlap with scaling technologies like ZK, the primary focus is on improvements at the application layer. Due to Solana's already low costs, raising funds for L2 solutions is challenging. He added that Solana's low costs make it difficult to raise funds for L2. Ethereum's expensive L1 and L2 solutions provide valuable propositions. Solana's emphasis is on building applications that people will use, rather than adding more layers or frameworks.
Therefore, this article will focus on analyzing some noteworthy projects within the Solana ecosystem.

Comprehensive Analysis of Solana Ecosystem Projects

Liquid Staking

1. Marinade Finance: (MNDE) allows users to convert staked assets into liquid assets at any time.

Marinade Finance plays an important role in the Solana ecosystem, particularly in the liquid staking space. Their core service provides a convenient way to convert staked assets into liquid assets without going through a lengthy unlocking process. The recently launched rewards program and Marinade Native program offer users more opportunities to participate and delegate staking while maintaining flexibility in fund withdrawals.
Marinade Finance has shown impressive performance within the Solana ecosystem, especially with a total value locked (TVL) of up to $613 million. This figure indicates their widespread application and user trust on Solana. Additionally, their token mSOL is listed on several well-known exchanges, enhancing its liquidity.
MNDE is their governance token, which has completed a fair distribution. The MNDE token allows holders to participate in protocol governance and ecosystem development. A majority of the supply is reserved for community governance, representing a portion of ownership in the DAO, used for updating system parameters.
Moreover, the MNDE token also facilitates liquidity growth and strategic partnerships, with some proposals considering granting it more utility. According to CoinGecko, the trading price of the MNDE token is approximately $0.31, with a market capitalization of $175,000.
In the token distribution, 35% is allocated for liquidity mining proposals and incentives, 35% for funding programs and partnerships, 30% for the financial team, with a vesting period and lock-up period.

2. jito_labs (JitoSOL)

Jito is the first staking product on Solana that includes MEV rewards, allowing users to stake SOL in exchange for LSD tokens. JitoSOL is a liquid staking platform on Solana that provides holders with MEV (Maximum Extractable Value) rewards, a unique asset that not only offers liquidity but also combines staking rewards and MEV rewards. Currently, Jito's total value locked (TVL) has soared to $280 million.
Additionally, @solblaze_org (BLZE) offers staking SOL to obtain bSOL, while @marginfi (LST) is one of the platforms on Solana for LST staking that generates the highest natural yield.

Derivatives/Derivative Contracts

1. Drift Protocol

Drift Protocol is a DeFi derivatives trading platform and is the leading perpetual contract exchange on Solana, built on the Solana blockchain, focusing on perpetual swaps or futures contracts with no expiration date. The cumulative trading volume has reached $1.66 billion, and the TVL is currently continuously growing to $32.6 million. Users can stake assets into the insurance fund, which not only helps secure the network but also earns liquidation fees as a return.

2. Zeta Markets

Zeta Markets is a partially collateralized DeFi options platform that provides users with high liquidity derivatives trading based on Solana. Zeta Markets leverages Solana's anti-censorship infrastructure to offer users price updates, liquidation, fast settlement, and ultra-low fees, aiming to promote liquidity, non-custodial, and low-collateral derivatives trading. Zeta Markets has also launched a points system called "Z-Score," aimed at preparing for future token issuance.

Lending/Currency Markets

1. Marginfi

Marginfi is the second-largest lending protocol on Solana and is a decentralized portfolio margin protocol. The protocol provides traders with a unified account for margin access, portfolio composition, and improving capital efficiency of underlying trading protocols, and has not yet issued a token.

2. Solend Protocol

Solend is a self-adjusting interest rate machine for loans on Solana, allowing users to earn interest and borrow from 63 assets across 20 funding pools through the fastest, lowest-cost, and most scalable DeFi lending protocol.

3. Kamino Finance

Kamino is an automated liquidity solution based on the concentrated liquidity market maker (CLMM) mechanism. Liquidity providers (LPs) seeking to improve capital efficiency can utilize Kamino's automated market-making vaults to enhance expected returns on fees. Currently, Kamino Lend and Kamino 2.0 are in internal testing.

Gamefi

1. Aurory

Aurory is a gaming project within the Solana ecosystem, aiming to build a multiplayer interstellar adventure world that combines traditional gameplay with blockchain mechanics. This game is based on the Solana ecosystem and utilizes NFTs (non-fungible tokens). Its game type is J-RPG (Japanese Role-Playing Game), set in a retro-futuristic universe called Antik.
In this diverse universe, there are magical creatures known as Nefties. These creatures are designed as NFTs, which players can capture, evolve, battle with, and trade on the market. The characteristics of NFTs make each Neftie unique, providing players with a distinct experience in collecting, playing, and trading. By integrating blockchain technology, players can own, manage, and trade their unique NFTs Nefties obtained in the game.

2. Star Atlas

Star Atlas is a space-themed massively multiplayer online game (MMO) currently in development. The game revolves around space exploration, territory control, and political domination. The development team aims to create a metaverse experience that will revolutionize how people interact socially, economically, politically, and in governance. Star Atlas can be imagined as a virtual universe parallel to the physical world, unrestricted by geography.

3. DeFiLand

DeFi Land is a unique multi-chain yield simulation game designed to gamify various aspects of decentralized finance. The game offers players the opportunity to start for free, gradually upgrading to Play and Earn levels (or simply purchasing Gen-0 NFTs), competing with other players, crafting, trading, and diving into the exciting world of DeFi.

NFT

1. Magic Eden

Magic Eden is an NFT marketplace on Solana that provides a trading and incubation platform for NFTs. Magic Eden is a new NFT platform designed to facilitate the buying, selling, and minting of NFTs on Solana. Magic Eden is a platform for creating and selling NFTs, akin to OpenSea on Solana. If you want to launch an NFT on Magic Eden, the fee is $0, and the platform earns 2% from each future transaction. This lowers the entry barrier for new and experienced NFT buyers and creators.

2. Solanart

Solanart is an NFT marketplace built on the Solana blockchain, similar to other NFT platforms on different blockchains, such as OpenSea, SuperRare, and Rarible. Solanart aims to provide a high-efficiency, low-cost, and high-throughput platform for digital artists and collectors.

3. Solsea

Solana SolSea is a decentralized non-fungible token public trading platform that is cheaper, faster, and more user-friendly compared to mature markets like OpenSea. Its low costs, fast transaction times, and user-friendly interface make it more attractive to non-fungible token creators.

RWA

1. Credix Finance

Credix Finance is a system that provides credit services for institutions. The platform has currently raised $11.25 million from investors including ParaFi and Circle Ventures. This figure reflects investors' confidence in the platform and its potential to provide credit services to institutions.

2. Parcl

Parcl is a real estate trading protocol that allows leveraged trading to participate in real estate prices. They have raised $4 million from investors such as Coinbase Ventures and Solana Ventures. This indicates that investors are optimistic about the protocol's potential in the real estate trading field and believe it may play an important role in the Solana ecosystem.

DePIN

DePIN (Decentralized Physical Infrastructure Network) is the development direction based on cryptoeconomic protocols. The core of the Web3 world is decentralization, but in reality, over 50% of Bitcoin's hash power is controlled by three providers. Therefore, to ensure decentralized security and trust, we need a truly decentralized physical infrastructure network.
The DePIN network utilizes cryptoeconomic protocols to deploy and manage real-world physical infrastructure and hardware networks. It is also known as Proof of Physical Work (PoPW), Token Incentivized Physical Infrastructure Network (TIPIN), and EdgeFi network. This network uses blockchain technology to coordinate and manage millions of individuals, achieving trustless, permissionless, and programmatic infrastructure deployment and operation. Compared to traditional top-down centralized deployment models, this bottom-up approach is fairer and more efficient.
From a market space perspective, the overall potential market for DePIN is expected to exceed $22 trillion, potentially reaching $35 trillion by 2028. This shows its tremendous potential for future development.
However, recently, DePIN projects have experienced significant price fluctuations, particularly Hivemapper within the Solana ecosystem, which has surged by 233.4% in the past seven days.
Solana's focus on DePIN is increasing. According to new analysis from CoinEx, the Solana ecosystem's focus is mainly on DeFi, Memecoins, and DePIN. Some established DePIN projects are also beginning to align with Solana. For example, Render Network, the largest GPU computing DePIN project, has voted to expand from Polygon to the Solana blockchain. Additionally, the wireless network Helium has successfully migrated to Solana, minting nearly 1 million NFTs in the process. These migrations and minting activities indicate Solana's emergence as a popular platform for DePIN projects.
Currently, the DePIN track in Solana is seeing several hot applications.

1. Helium

Helium is a decentralized wireless network designed to provide open, wide-ranging global wireless coverage for IoT devices that support the LoRaWAN standard. Currently, there are hundreds of thousands of gateways on the Helium blockchain, forming the largest LoRaWAN network globally, serving various IoT devices. Users participating in this network can earn corresponding token rewards.

2. Hivemapper

Hivemapper is a blockchain-based mapping network. It aims to create a decentralized global map that rewards contributors. Contributors can collect data by installing Hivemapper's dashcam and earn local tokens HONEY as rewards.

3. Teleport

Teleport is a permissionless ride-sharing application owned and managed by drivers, passengers, and developers. On October 27, 2022, Teleport completed a $9 million seed round of financing, co-led by Foundation Capital and Road Capital, and has already launched on the Apple Store.

4. Tekkon

TEKKON is a popular Web3 product in Japan, operated by the Whole Earth Foundation, which has issued its own WEC token. Currently, its global user base has exceeded 130,000. In Tekkon's Twitter introduction, the project uses an interesting concept to define itself as a "social contribution-type Web3 game."
Tekkon has gained popularity in the Philippines due to its token rewards, with locals actively participating in capturing images of damaged infrastructure, referred to as "infrastructure hunters." Reports indicate that Tekkon has over 128,000 active users, with 90,000 from the Philippines, uploading about 30,000 photos daily.
Whole Earth Coin (WEC) is Tekkon's reward token, which can be exchanged for cash on Japan's Line Pay. The initial issuance was 300 million tokens, with no maximum limit. When the initial tokens run out, the system will issue new tokens based on user growth. Of the initial 300 million tokens, 20% is allocated for ecosystem development, 20% for in-app Fix and Earn, 25% for public sale, 15% for private placement, and the remaining 20% for the team.

AI

1. Nosana CI

Nosana is a decentralized CI/CD platform powered by the Solana Network, with NOS as its token. The platform combines edge computing and blockchain capabilities into the CI/CD market. The NOS token powers the system by creating an open market that connects blockchain developers and services to a global pool of computing power. Thus, anyone can rent out their spare CPU to power the next Metaverse. People and machines can use and share computing power to execute their software delivery pipelines. Focused on the AI inference track, it has a market cap of $23 million, which is still very early compared to RNDR's $600 million.

2. Render Network (AI x DePIN Narrative)

Render Network is an early project that transitioned from Polygon to Solana. Render Network is a decentralized GPU rendering solution provider under OTOY, aiming to connect creators with idle GPU resources through blockchain technology to eliminate hardware limitations, reduce time and costs, while providing digital rights management to further promote the development of the metaverse.

DEX

1. Orca Protocol

Orca Protocol is an AMM (Automated Market Maker) DEX that has developed a CLMM (Concentrated Liquidity Market Maker Model) system called Whirlpools. Currently, most of the liquidity in the Solana ecosystem has flowed to Orca. This demonstrates Orca's significance in terms of liquidity and trading on Solana.

2. Raydium Protocol

Raydium is an automated market maker (AMM) built on the Solana blockchain that utilizes a central limit order book to enable lightning-fast trading, sharing liquidity, and earning new yield features.

3. Jupiter Exchange

Jupiter is the first trading aggregator on the Solana chain, aiming to provide users with the best exchange rates by integrating all major liquidity markets on the Solana blockchain while offering the best exchange experience in DeFi for users and developers. The project launched on the Jupiter mainnet on October 13, 2021, and since then, the project team has continuously optimized and improved the project based on user feedback, integrating more DEX paths on the Solana chain. Currently, the Jupiter website supports mainstream DEXs on Solana, including Orca, Raydium, Serum, Mercurial, Saber, and Dexla.

Oracles

Pyth Network is an innovative decentralized oracle that publishes financial market data on-chain, unlocking valuable data from the real world and transmitting it to the blockchain to support the construction of the next generation of DeFi. It sources financial market data from over 90 information sources, including major global exchanges and market makers (such as CBOE, Binance, OKX, Bybit, etc.), and distributes data to over 40 blockchains.

Data Storage

GenesysGo is a blockchain infrastructure provider on the Solana network, with core services including Shadow Operators providing node operation services, and the RPC layer Shadow Drive for decentralized data storage, with plans to implement a token burn mechanism. Their tokens are almost fully allocated, which may affect their future inflation and token value.

Conclusion

The Solana ecosystem has recently attracted attention with the groundbreaking development of DePIN projects. Solana, as a high-throughput, low-cost blockchain platform, is gaining focus, with DePIN dedicated to establishing a decentralized physical infrastructure network, incentivized by tokens to drive its operation and maintenance. Additionally, projects like Teleport are emerging on Solana, providing new models for shared mobility and decentralized ride-sharing. The Tekkon project has achieved success in places like the Philippines by rewarding users for capturing infrastructure issues, thereby improving local facilities. These projects showcase Solana's leading position in blockchain innovation and integrate blockchain technology into everyday life. Solana is expected to attract more innovators and investors in the future, becoming an important engine for blockchain innovation.