Dialogue with Solana Foundation President Lily Liu: Solana's Expectations and Surprises

Interviewee: Lily Liu, Chair of the Solana Foundation

Interviewer: flowie, ChainCatcher

Mable, a former partner at Multicoin Capital, recalled on a podcast that "Lily Liu's decision to join Solana as the chair of the foundation" can be seen as a milestone that changed Solana's fundamentals.

Both the core crypto circle and the Silicon Valley venture capital circle highly recognize Lily, stating, "Her joining will make many people reassess Solana and ask themselves if they were too arrogant before."

Lily Liu not only has a rich background on Wall Street but has also been deeply involved in the crypto industry for over a decade. After graduating from Stanford, she worked at Morgan Stanley's Hong Kong investment banking division, McKinsey, and KKR, and also participated in entrepreneurship related to private hospitals in China.

In 2013, after being introduced to Bitcoin by Bobby, a co-founder of Bitcoin China, Lily Liu entered the crypto field and helped the publicly listed company Earn.com through a financial crisis.

Like Mable, many in the crypto circle are curious about how Solana's two co-founders, Anatoly and Raj, managed to persuade Lily Liu.

Lily Liu's entry into Solana was not a sudden decision. Although she was an old acquaintance of Anatoly and Raj, it wasn't until she received a third invitation in 2021 that she chose to officially join Solana.

This choice was based on an unforgettable user experience: "You press it, and it happens." Lily Liu discovered that Solana's extremely fast transaction speed and low operational costs provided an experience similar to Web2 products. "This is one of the prerequisites for the large-scale application of blockchain."

After joining Solana, Lily Liu has been contemplating how to help Solana grow in non-U.S. markets, especially in Chinese-speaking markets. Under her leadership, non-U.S. markets such as India and Chinese-speaking regions quickly made breakthroughs. The organization she helped establish, Superteam, has now expanded to over 15 countries and regions.

For Lily Liu, 2023 is a period filled with significant challenges and opportunities.

When Lily Liu joined Solana in 2021, Solana was at a high point, with its token price soaring to over $200, setting a historical high. However, by the end of 2022, following the FTX collapse, Solana, which had numerous connections to FTX, plummeted to $8.

At that time, various media and crypto users were discussing whether "Solana would die," and even Anatoly was quite pessimistic. However, Lily Liu remained optimistic, believing that this was just a temporary shock.

In the second half of 2023, Solana made a strong recovery, with significant increases in several core data metrics: TVL, on-chain activity, daily DEX trading volume, and NFT trading volume, even surpassing Ethereum and the overall trading volume of L2 multiple times.

The Solana ecosystem continues to demonstrate its remarkable vitality. In addition to flourishing in areas such as LSD, DeFi, and DePIN, the Solana ecosystem has recently sparked a new wave of meme frenzy, attracting a large influx of users with astonishing wealth myths. The price of Solana tokens also broke the $200 mark again after 27 months.

What exactly did Solana do right? What strategic plans does it have for 2024?

Recently, Lily Liu stated in an interview with ChainCatcher that continuous technological innovation and community building are the core of Solana's resilience. In 2024, Solana will focus on payments, stablecoins, RWA, DePIN, and the AI+Crypto field.

With Hong Kong's opening up to the crypto market, Solana will also actively expand the Chinese-speaking community, aiming to become the essential and preferred public chain for applications in Asia.

From Bitcoin Extremist to Chair of the Solana Foundation

1. ChainCatcher: How did you first get into blockchain? What important personal experiences did you have before?

Lily: In 2013, while I was working in Shanghai, my good friend and Stanford alumnus Bobby Lee mentioned Bitcoin to me. Bobby Lee is a co-founder of "Bitcoin China" and has some influence in the Bitcoin field.

Initially, I had a superficial understanding of Bitcoin, thinking it was a tool for money laundering, and I even advised Bobby Lee not to get involved. However, over the next few months, Bobby Lee persistently recommended Bitcoin to me. I felt that Bitcoin had a kind of religious allure.

Although I don't come from a technical background, I realized through reading the Bitcoin white paper that it was an interesting concept. So in 2014, I joined Bitcoin China, which was one of the three major exchanges at the time, along with OKX and Huobi.

But after working there for three to four months, I returned to the U.S. and met Balaji S. Srinivasan, who is also influential in the blockchain space. At that time, he was running a mining company called 21 Inc, which was facing financial issues, and he invited me to join to help alleviate the financial pressure. They later rebranded to Earn.com and were sold to Coinbase in 2018.

Before getting into blockchain, I spent most of my time working in traditional finance, and I worked in China for about five to six years. Although I was born in the U.S., I have always been very interested in Chinese culture.

After graduating from Stanford, I started my career at Morgan Stanley's Hong Kong investment banking division. In around 2005, I joined McKinsey, and in my third year at McKinsey, I moved from New York to Beijing. Shortly after, I joined a private equity firm, KKR, and had the opportunity to work in Shanghai around 2011 through KKR.

Due to my work at KKR, I participated in an entrepreneurship project related to private hospitals. At that time, I met the "Frist" family from Tennessee, who opened a private hospital in China. I got involved in their international standard hospital project in Cixi, Zhejiang Province, responsible for the acquisition and construction of the private hospital.

It was during my time working in Shanghai that I was introduced to blockchain through Bobby, and I have been involved in building in the blockchain space for over ten years.

2. ChainCatcher: As a Bitcoin extremist, why did you choose Solana in 2021? How did the two founders of Solana, Anatoly Yakovenko and Raj Goka, first find you, and what did they hope you could bring?

Lily: Around 2017, San Francisco was a core hub for blockchain, and there were often crypto-themed gatherings. It was at one of these crypto gatherings that I met Anatoly Yakovenko and Raj Goka.

At that time, Solana was in its first round of financing, and one of their investors was also my friend. This investor had a meeting with me and said that Solana would be the largest public chain infrastructure in the future and asked if I would consider joining.

Later, I took a break after leaving Earn.com and happened to run into Anatoly, but at that time, I was still a staunch Bitcoin extremist and believed that other coins were not important besides Bitcoin.

It wasn't until early 2021 that I suddenly became curious about the progress of public chains and what innovations were happening. At this time, another investor friend recommended Solana to me.

I started trying out Solana and found that its user experience was already quite similar to Web2 products—"you press it, and it happens," with very fast speeds and almost zero costs. This greatly changed my impression of blockchain, as previous blockchain transactions often took an hour and had high gas fees.

Solana sparked my strong interest. In early 2021, I even met with friends in San Francisco at a café, and we would talk about Solana for hours. This was similar to the enthusiasm my good friend Bobby had when he recommended Bitcoin to me in 2013.

At that time, the crypto market was also entering a bull market, and crypto conferences were happening everywhere. At a Bitcoin conference in Miami, I happened to sit next to Anatoly Yakovenko and Raj Goka, whom I hadn't seen in years. They asked about my recent developments, and I had just returned to Silicon Valley and was still contemplating entrepreneurship.

They asked if I was interested in supporting some Solana projects in my spare time. I indeed wanted to return to the blockchain industry to learn more. So I initially worked part-time at Solana, starting with about 10 hours a week, and gradually became more involved, eventually becoming the chair of the Solana Foundation to oversee the entire business of the Solana Foundation.

3. ChainCatcher: From being a Bitcoin extremist to developing a strong interest in Solana, how did this transformation happen?

Lily: First of all, I have always believed that blockchain needs to provide a user experience as friendly as Web2 to achieve large-scale adoption. However, the user experience in blockchain has historically been high in both transaction time and cost, until Solana emerged and showed me the opportunity for mass adoption.

Secondly, beyond user experience, Solana's strategy and determination to be a non-EVM chain also impressed me. At that time, most public chains were EVM chains, but Solana chose a long-term development goal to achieve high-performance public chains and attempted to innovate and break through technically.

Additionally, I believe that for blockchain projects, especially public chains, technology, community culture, and financial viability are the three core elements. Very few can achieve all three; besides Bitcoin and Ethereum, Solana does quite well in this regard.

4. ChainCatcher: From part-time at Solana to becoming the chair of the Solana Foundation, what is your focus at work? What role does the Solana Foundation play in Solana?

Lily: Initially, my work scope was not clearly defined; I participated in strategic business, investment business, and more.

Later, I also thought about what I could bring to Solana after joining. Solana is a company that started in the U.S., and its initial target markets were mainly the U.S. and parts of Europe, but blockchain companies should be international.

So I hoped to help Solana grow in non-U.S. markets. We initially expanded into the Indian market, but I did not do it under the Solana India brand; instead, I assisted several community members to form an organization called Superteam to expand, which has now grown to 15 countries. This is what I consider my most core contribution after joining the Solana Foundation.

In general, Solana should be an open platform. The Solana Foundation is just one entity within the ecosystem, responsible for community growth while acting as an enabler, aiming to help projects or organizations within the community and ecosystem, which will need to operate independently in the future.

Solana's Recovery Was Anticipated

5. ChainCatcher: By the end of 2022, due to the FTX black swan event, you fell below $10. Many voices in the market discussed Solana's survival, and Anatoly recently mentioned in an interview that he was quite pessimistic, believing Solana would not succeed.

What was the core team's biggest concern at that time? Did you immediately make any important response decisions?

Lily: First, it was the Solana DeFi ecosystem. FTX supported many of Solana's infrastructures, and many assets on Solana DeFi used FTX's cross-chain bridge. After FTX collapsed, about $40 million went to zero.

Secondly, many projects on Solana had actually received financing from FTX, and 75% of their assets were also held at FTX. When FTX collapsed, these funds also went to zero. The crypto market entered a bear market, making it very difficult to raise funds again, which posed a severe financial test for many projects in the ecosystem.

Moreover, the entire public opinion environment was pessimistic about Solana, claiming that many projects in the Solana ecosystem were lost. However, the actual loss in the ecosystem was not as exaggerated; only about two or three top projects migrated, so our public relations also faced severe challenges.

From November to December 2022, our entire focus was on how to help these affected ecosystem projects get through the difficulties. Later, we faced numerous issues, and in March 2023, Solana experienced another outage.

6. ChainCatcher: In the one to two months following the FTX collapse, your ecosystem did not experience the severe losses reported by the media?

Lily: Yes, from the number of developers, the metrics did not decline significantly after the FTX collapse. In January and February 2023, the number of participants in our organized hackathon events was even higher than the previous average.

Looking back now, our monthly active developer count has returned to around 3,000, while it was around 2,000 during the bear market.

7. ChainCatcher: A clear recovery for Solana seems to have occurred in October 2023, coinciding with the annual Breakpoint event. Key metrics for Solana, such as token price, TVL, on-chain activity, daily DEX trading volume, and NFT trading volume, have all seen significant increases. Did you anticipate this rise?

Lily: Yes, we did anticipate it. I know that although from the outside, especially in the Asian community, people wonder why a project that was supposed to fail suddenly rose again.

However, in reality, after the FTX collapse, Solana made significant technological advancements, particularly in state compression technology. If you were to mint 100,000 NFTs, it would cost $500,000 on Ethereum, but only $100 on Solana.

State compression has reduced the cost of using blockchain and expanded the space for innovation, allowing blockchain technology to be more widely applied across various fields. The significance of this technological innovation may only be understood by core developers at first.

We anticipated that the external market would take about a year to digest this technological innovation.

In addition to technological innovation, I believe Solana also encountered a significant opportunity in 2023 with Hong Kong's openness to blockchain technology.

I think there are two major markets for blockchain: one is the U.S. market, and the other is the Chinese-speaking market. Both markets have rich talent and capital. The U.S.-led Western market may be better at technology and infrastructure development, while the Chinese-speaking market excels in applications due to its large traffic.

I remember in 2019, Anatoly and I discussed in a conference call how to get Solana into the Chinese-speaking market. However, in 2021 and 2022, the Chinese-speaking market was not very welcoming to blockchain, so I was waiting for the opportunity in that market.

With Hong Kong's embrace of blockchain in 2023, Solana truly has the chance to grow in the Chinese-speaking region.

8. ChainCatcher: What role did Breakpoint play in Solana's rise?

Lily: The Solana Breakpoint conference is a very important showcase for the Solana community every year, allowing more crypto users to gain a deeper understanding of Solana's innovations and ecosystem progress.

Crypto is an industry that relies heavily on remote work, and it needs nodes to bring everyone together for a firsthand experience. After over a decade in the crypto industry, I increasingly feel that understanding a project or ecosystem sometimes relies on a feeling—participating and experiencing whether the ecosystem is genuinely innovating and whether it aligns with your values.

9. ChainCatcher: Have you reflected on what Solana did right to recover just a year after the FTX crisis?

Lily: Actually, the previously mentioned innovations in state compression technology and some high-performance, high-speed technical developments have always been part of Solana's long-term planning. We have been continuously advancing these developments.

For example, by the end of 2023, the Solana Foundation invested in a significant project called Firedancer, which is being developed by an independent team with the aim of increasing Solana's TPS to hundreds of thousands.

I believe that for Solana as a public chain network, the most important thing has always been to meet the needs of developers and to continuously develop and refine technology. It will not change because of an external market shock. This is also a core reason why Solana can maintain its resilience.

10. ChainCatcher: Besides technology, many crypto KOLs attribute Solana's full recovery to strong community vitality.

How does the Solana team and foundation maintain good interaction with developers and the ecosystem community? What are the obvious differences in your community culture compared to other public chains?

Lily: When thinking about the cultural differences in public chain communities, we can consider the cultural differences between different countries and cities. The cultures of Guangdong and Northeast China are significantly different.

The cultural difference in the Solana community primarily stems from the personalities of the founders, Anatoly and Raj. Although this reason is simple, their influence is profound; they are very focused on technology and are sincere people, and this trait is reflected in the atmosphere of the Solana community.

Compared to many public chains, Solana has a stronger sense of organization and ecosystem. Many public chains resemble traditional companies.

A company aims to concentrate all resources to achieve its goals and efficiency. In contrast, the purpose of an ecosystem is to decentralize resources and allocate them to where the community needs them, while ensuring health and reasonableness. In the long run, the development space for a company model is not as large as that for an ecosystem model.

The Solana Foundation's goal over the next three to five years is to hand over development and some important projects back to the community. Of course, we will have some short-term indicators every six months to help the community grow.

11. ChainCatcher: What aspects do your semi-annual indicators generally focus on, and what support will you provide to the community?

Lily: We will examine what new products or application variables are emerging in the market.

For example, in 2024, we see strategic opportunities in finance-related fields such as payments, RWA, stablecoins, and DeFi, as well as emerging fields like DePIN.

On one hand, we need to consider whether the Solana community needs to innovate around these use cases. On the other hand, we need to think about how to help the community grow in these areas or provide support for organizational establishment.

The Solana Foundation will also provide some capital support, primarily through grants, and we can also invest in some projects.

12. ChainCatcher: Some opinions suggest that the FTX collapse led to a reshuffle in the Solana community, resulting in healthier development. What do you think about the changes brought by the collapse and bear market to the Solana community?

Lily: If I had a choice, I would prefer that this crisis had not occurred. But since it did, we deeply realized in the crypto field that as long as you don't die, you can survive; sometimes the goal is simply not to die.

The Main Focus for Solana in 2024 is "Payments"

13. The Solana ecosystem has not only recovered in DeFi, NFT, and LSD fields; it has also gained significant attention and wealth effects in new narratives like inscriptions, DePIN, and memes. What areas will you focus on supporting? What important plans do you have for 2024?

Lily: In addition to the previously mentioned payments, stablecoins, RWA, and DePIN, we are also optimistic about the AI+Crypto field. On one hand, AI needs decentralized GPUs to process some computing power; on the other hand, AI governance is also very important, as AI can create information while crypto can prove it.

14. ChainCatcher: What areas of development in Solana have been unexpected for you?

Lily: The Saga phone was something we were almost ready to give up on. Unexpectedly, after Bonk, we sold out thousands of units in just a week.

Around 2018, we had been thinking about how crypto adoption could help users make money while ensuring good security and user experience. After much consideration, we believed that we needed to provide users with various opportunities to earn money through a crypto phone hardware.

Additionally, we were motivated by the many pain points users currently face with regular phones. Many software applications lose 20% to 30% of their revenue to Apple; meanwhile, ordinary users' personal assets, data, and other information also face privacy and security issues.

So we believe that a crypto phone, even if not made by Solana, needs to be developed by someone else.

However, regarding how to design this phone initially and the specific roadmap, we didn't have a clear plan; we were exploring and trying things out as we went along.

15. ChainCatcher: Inscriptions have driven the Bitcoin ecosystem to great heights, but they have also faced skepticism from many core Bitcoin developers. As a former Bitcoin fundamentalist, do you maintain expectations or skepticism about this?

Lily: I previously hoped that Bitcoin would become a payment network supporting international finance. The SegWit upgrade in 2017 brought significant innovation to the Bitcoin ecosystem. Therefore, I am very interested in the new round of innovation in the Bitcoin ecosystem.

Now, some projects in the Solana ecosystem are also expanding into the Bitcoin ecosystem. For example, a project from Taiwan, Zeus Vetwork, is working on cross-chain solutions from Bitcoin to Solana, and I look forward to seeing more innovative applications emerge.

16. ChainCatcher: Solana has been labeled as the "Ethereum killer." After experiencing a downturn, how do you define your role in the public chain space?

Lily: I believe Bitcoin is its own category; it is both infrastructure and application. The various chains that started with Ethereum are more like infrastructure serving applications; they are a type of technology platform. A technology platform needs to have a product mindset.

We need to make the technology of public chains usable, so last year we expanded Solana Pay and developed the technology for compressing NFTs. Recently, we also launched a new standard for SPL tokens called "Token Extensions" to support RWA assets.

However, I believe that this type of infrastructure is not just a technology platform; it is like a small city that needs its own culture, and we need to build that city culture well.

In the long run, I do not believe that the crypto field will become as highly centralized and monopolized as the traditional internet field, where one Google can occupy 90% of the market. The future of crypto may require hundreds of different "cities," different public chains. These public chains need to work together to ensure that assets and data return to the control of users.

17. ChainCatcher: What major challenges does Solana still face in the future?

Lily: Recently, Solana experienced outages, and we need to ensure that such situations do not occur in the future because the financial industry has a high demand for network stability.

Additionally, we need to improve how we grow and expand our business. Currently, we are still very focused on the development of the payments sector and need to introduce Solana payments to many large enterprises.

Making Solana the Essential Public Chain for Applications in Asia

18. ChainCatcher: The Solana Breakpoint conference will be held in Asia for the first time this September. Why choose Asia this year? What expansion plans do you have for the Chinese-speaking region?

Lily: Helping Solana expand into the Chinese-speaking region is a very important mission for both Solana and myself. Last year, with the policy openings in places like Hong Kong, we quickly established a developer community in the Chinese-speaking region, hoping to foster some promising applications.

The Chinese-speaking region has a strong traffic base, and the number of users for applications could potentially reach millions, tens of millions, or even hundreds of millions. They also need a high-performance public chain as infrastructure, but currently, their options for public chains are limited.

We hope that as applications in the Chinese-speaking region emerge strongly in the future, Solana can become their essential or preferred public chain.

19. ChainCatcher: Since you got into blockchain in 2013, you have experienced various bull and bear cycles. What advice can you share with entrepreneurs in this bull market?

Lily: Bull markets generally last about 18 months, and entrepreneurs really need to make good use of this cycle.

On one hand, the key to a bull market is attracting talent and capital, which should be gathered around the ecosystem rather than the foundation. On the other hand, a bull market is also a good opportunity for expansion and market growth.

For instance, Solana has been very focused on growth and major collaborations since last year. For example, in September last year, Solana announced a partnership with payment giant Visa, and this year we will continue to expand large collaborations.

I look forward to more talent and innovation pouring into Solana, and I hope to see more entrepreneurs from the Chinese-speaking region achieve significant growth and breakthroughs in this bull market.

Conclusion

In the last bull market, Solana, which was crowned the "Ethereum killer," although once ranked among the top three in crypto market capitalization, has always faced skepticism regarding its rise due to strong capital backing.

In this bull market, the surviving Solana seems to be undergoing a transformation, achieving astonishing growth that exceeds market expectations through its strong ecosystem vitality and creativity. Moving forward, whether Solana can break through expectations again remains to be seen.