ETH DeFi scene eyes Solana

Solana has cemented its status as a leading blockchain after emerging like a phoenix from the ashes of the FTX/Alameda collapse.

In the community-led renaissance that followed, it was the sweat of native Solana teams that greased the wheels of progress, but following a steady increase in SOL prices and DeFi metrics, non-native protocols are ready to seize the opportunity 👀

🛣️ Solana natives lead the way

SOL’s epic run from its December 2022 low of $8 to $210 just two months ago was one of crypto’s most notable comebacks this cycle, but the wealth creation of ecosystem has not limited itself to its native token holders.

Developers lived up to the hype, starting with the PYTH airdrop in November, which awarded tokens on Solana to addresses that interacted with Pyth oracles on 27 networks (including Ethereum and its L2s) and marked a turning point which gave users in other ecosystems a direct financial incentive to test Solana.

Shortly after, Jito Labs, Solana’s native liquid staking protocol, conducted its own airdrop, rewarding eligible wallets that had earned more than 100 points with a minimum five-figure token allocation for the simple action of holding jitoSOL deposit receipts.

The mind-blowing distributions received by Jito users transformed Solana into the premier destination for airdrop hunting, catalyzing the mass adoption of points-based incentive systems by the chain’s new protocols which proved highly effective for attract both users and their capital.

🧨 Change the dynamic

While it was the native protocols that laid the groundwork for mainstream crypto acceptance of Solana, the ecosystem increasingly found itself welcoming Ethereum developers.

The migration may be happening at a snail’s pace, but it’s undoubtedly happening as more projects become aware of the massive amounts of on-chain activity within Solana and eagerly seek to create a deployment to capitalize on this opportunity.

Decentralized Computing Sharing Network Give back banked on Solana’s vision from the start, choose to migrate its token to the SPL standard in November.

Although MetaMask is often considered a laggard when it comes to improving user experience, the project was among the first Ethereum-native applications to introduce Solana compatibility with the launch “Snaps” last September, which allowed users to access external applications directly from their wallet. To date, the Snaps integration for the native Solana Solflare wallet has onboarded over 500,000 users!

Many money markets exist on Solana, but none offer the same level of proven security as Ethereum’s premier lending destination: Aave.

Hoping to leverage its brand as a competitive advantage over Solana, the Aave DAO approved a bill in January temperature control with 83% consensus to deploy a minimally viable version of its Isolated Money Market V3 via Neon EVM, a fully compatible Ethereum development environment built on the Solana blockchain.

Last Wednesday, a community-generated proposal was presented on the governance forum of the popular EVM-based perpetual trading platform. GMX, seeking to establish an exchange-agnostic deployment on Solana called GMSOL.

The GMSOL implementation would exclusively use the GMX token for all value metrics and storage while implementing a GMX buyback mechanism and distributing a significant percentage of fees to the GMX treasury to establish a GMSOL treasury.

In exchange for donating this new native Solana deployment, the GMX DAO is expected to cover all costs associated with auditing the protocol and licensing the replication and use of its frontend code.

Furthermore, there has been widespread speculation that both Ethena And Pendletwo prominent Ethereum projects that have thrived in recent months thanks to a high crypto interest rate environment, will be deployed on Solana in the near future.

🚀 Long-term trajectory

Applications serve users, not blockchains, and while the bar is high for many top protocols when considering a new deployment, they would be foolish not to flock to environments where users and blockchains exist. activities.

On networks where a protocol is absent, users will inevitably seek replacements, putting existing apps’ market dominance at risk – especially when their channel begins to cede market share to competitors.

Ethereum and Solana have taken radically different scaling approaches, with the former opting for network fragmentation to make operating a validator accessible to everyone and the latter favoring a unified state that focuses usage on one single layer. While greater decentralization at the validator level helps maintain the integrity of the Ethereum network, it certainly has drawbacks that make Solana’s alternative vision of blockchain very attractive in some ways.

Right now, crypto remains largely in the experimental phase, meaning we really have no idea what our nascent industry will look like in 10 years, but just as investors can undertake diversification portfolio to mitigate risk, applications can diversify channels. on which they are deployed to preserve their market shares.

Developers aiming for maximum success must accept that there is no inevitable hub for the future of finance, and they must deploy their applications accordingly, whether it is Ethereum, Solana, or even the EVM frankenchain Monad or the banking application. Regulated settlement network!

The crypto industry must overcome a huge chasm of uncertainty to move from infancy to an end state where true adoption is achieved and billions and billions of dollars of traditional assets make their way onto the chain.

In the meantime, app developers succumbing to blind channel loyalty are leaving money and market share on the table.

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