Some years ago, in the late hours of the night, Co-founder Anatoly Yakovenko experienced a moment of clarity that sparked a visionary idea: to create a hyper-optimized, lightning-fast blockchain protocol for smart contracts.
This vision was to establish a pioneering platform for the future of web3, one that prioritizes scalability, security, and decentralization.
…This was how the Solana came to be.
The Solana Foundation
Founded in Zug, Switzerland in 2020, The Solana Foundation stands as a non-profit organization dedicated to advancing decentralized technologies for the benefit of the public.
Their primary focus hinges on promoting the widespread adoption of the Solana protocol, a blockchain platform developed by Solana Labs.
As outlined on their website, the vision revolves around empowering individuals with ownership of their data and enabling independent network access for value transfer, eliminating reliance on third parties.
As of February 2024, over 400 projects, including DeFi, NFTs, gaming, and decentralized exchanges, operate on Solana, showcasing its versatility and appeal. The blockchain boasts an impressive user base exceeding 11.5 million active accounts and 270 billion transactions.
Despite its initial success, Solana faced a significant downturn in late 2021 due to various factors, including the involvement of Sam Bankman-Fried, whose downfall impacted the cryptocurrency community.
The collapse of major Solana backers, FTX and Alameda, triggered a massive sell-off in 2022, plummeting the token's value by over 90%. However, 2023 saw a remarkable turnaround, with Solana rallying over 900%.
This resurgence coincided with a broader market recovery fueled by easing inflation, a more accommodating Federal Reserve, and renewed investor optimism. Solana's oversold status also contributed to the significant price bounce.
Further driving the recovery was excitement surrounding the "BONK" airdrop. This meme token, reminiscent of Shiba Inu (SHIB), distributed half its supply to Solana users, NFT collectors, and creators, injecting fresh enthusiasm and demand into the ecosystem.
Currently, the Solana Foundation faces the challenge of rebuilding its ecosystem and regaining trust. This necessitates substantial effort and resources to ensure the long-term sustainability of the public goods they strive to deliver through the Solana protocol.
Solana and Public goods
A public good is a commodity or service that every member of a society can use without reducing its availability to all others.
The concept of public goods predates the emergence of web3 by decades. In 1954, economist Paul Samuelson introduced the concept of collective goods, which can be enjoyed by many without diminishing the enjoyment of others, like a public park or a beautiful sunset.
Ten years later, Richard Musgrave added another essential element: non-excludability. This concept ensures everyone can access and benefit from the good, like the light from streetlamps guiding everyone home at night.
The internet age ushered in a new era of digital public goods: open-source software and platforms like Wikipedia, where knowledge is freely shared and accessible to all.
However, defining what truly constitutes a public good has always been a nuanced discussion. For example, can a park bench be considered a public good if the park itself has restricted access hours?
This complexity intensifies further within the web3 landscape. The term "public good" is frequently used across numerous projects and activities, making it difficult to distinguish genuine public goods from those that fall short.
In the crypto space, the concept of digital public goods more realistically means freely accessible tools like open-source software and educational resources.
Beyond the traditional characteristics, a true web3 public good should possess three essential qualities:
Decentralization and Transparency: Unlike centralized systems, web3 public goods operate in a transparent and decentralized manner, ensuring that no single entity holds complete control.
Community Ownership: These goods are not owned or controlled by a single entity but are maintained and governed by the community they serve.
Alignment with Web3 Values: They embody the core principles of web3, fostering collaboration and resisting control by any single entity.
This exemplifies both non-excludability (anyone can participate) and non-rivalry (one user's participation doesn't hinder others).
The Solana blockchain operates similarly.
Public goods within the Solana ecosystem, like infrastructure or tools, are crucial to its economic health, benefiting everyone who uses or builds on the platform.
At Breakpoint 2023, the Solana ecosystem witnessed the development of the Retroactive Public Goods Funding (RPGF) program.
This initiative, spearheaded by the Solana Foundation and OpenBlock Labs, aimed to provide a sustainable income stream for individuals who created public goods.
Why was the RPGF unique?
Unlike traditional grants that focused on future potential, RPGF rewarded past contributions that had demonstrably benefited the ecosystem. This approach incentivised developers and incentivized the maintenance and ongoing innovation of valuable tools and infrastructure.
How did it work?
Projects were nominated as potential public goods and then assessed by a group of long-term Solana visionaries who acted as delegates. These delegates cast their votes on a platform designed by OpenBlock Labs.
The first round of RPGF proved a success, attracting over 100 applicants and awarding funding to 36 projects.
These projects spanned various categories crucial for Solana's growth, including user experience, developer tools, governance, and the Solana tech stack itself. Notably, prominent projects like Anchor and Soligo received funding, highlighting the program's reach and impact.
While the first round was successful, there's always room for improvement. There are some noteworthy examples of projects currently providing public goods on Solana:
Development Tools:
Anchor and Squads MPL provide frameworks and tools that simplify smart contract development, making it easier for programmers to build on Solana.
Solana Playground offers an interactive environment for developers to experiment and learn about Solana development.
Infrastructure:
Jito Solana and Lighthouse contribute to the overall health and security of the Solana network by providing key infrastructure components.
Blockworks Foundation maintains Mango Feeds, which offer crucial price oracles for DeFi applications.
Open Source Resources:
Metaplex offers various open-source tools like Umi and Kinobi that empower developers to create and manage NFTs on Solana.
Solana Mobile Starter Kit provides developers with a starting point for building mobile applications that interact with the Solana blockchain.
This list is not exhaustive, and many other projects contribute to the public goods landscape of Solana. You can find more here.
Potential New Public Goods
While Solana boasts an impressive range of public goods, there are always areas for improvement and emerging needs to address. Here are some potential new public goods that could significantly benefit the Solana ecosystem:
1. Developer and User Education:
Develop more interactive on-chain tutorials and comprehensive learning platforms that guide users through complex concepts and functionalities within the Solana ecosystem.
Create more standardized onboarding resources and experiences, including documentation, videos, and interactive guides, to simplify user entry into the ecosystem and equip them with the necessary knowledge.
Establish a network of on-chain or online boot camps funded through public goods initiatives, providing aspiring developers with the skills and knowledge to build innovative dApps on Solana.
2. Enhanced Security and Scalability:
Foster the development of a decentralized security monitoring network to identify and address potential vulnerabilities within the Solana ecosystem promptly.
Fund research and development initiatives focused on exploring and implementing innovative scaling solutions to address network congestion and transaction speed limitations.
Develop a decentralized backup and disaster recovery system, allowing users and projects to recover data and functionalities in case of unforeseen disruptions.
3. Interoperability and Integration:
Facilitate the standardization and development of secure and efficient cross-chain bridge protocols to enable seamless transfer of data and assets between Solana and other blockchains.
Establish an interoperable identity management protocol that allows users to leverage their digital identities across different blockchain ecosystems and dApps built on Solana.
Develop a standardized framework for data exchange between different dApps and services within the Solana ecosystem, promoting interoperability and collaboration.
4. Sustainability and Environmental Impact:
Create a platform on Solana that allows users and projects to offset their carbon footprint by contributing to sustainable initiatives through verified on-chain transactions.
Fund research into alternative consensus mechanisms that are more energy-efficient compared to Proof-of-Stake, minimizing the environmental impact of the Solana network.
Establish a public goods fund dedicated to supporting projects and initiatives focused on promoting sustainable development within the Solana ecosystem and its surrounding communities.
Future of Public Goods on Solana
The continued development and adoption of public goods are vital for Solana's future success. To ensure their long-term sustainability, mechanisms like quadratic funding, where contributions are matched based on the number of other contributors, can incentivize more community participation and sustainable funding for public good projects.
More dedicated grants and fellowships can support the development and maintenance of critical public goods, attracting skilled developers and pushing innovation.
I think more collaboration between existing projects and initiatives would lead to more efficient resource allocation and the development of a more robust public goods infrastructure.
Conclusion:
While Solana's recent setbacks are undeniable, public goods funding presents a critical opportunity to overcome these challenges and unlock the ecosystem's true potential. By fostering innovation, attracting talent, and building a robust and secure foundation, Solana can continue to be a major player in the blockchain space, even as the landscape evolves.
Public goods funding is not just an option, but a strategic investment in Solana's future!