Original title: (Solana aims to build 'on-chain Nasdaq', where does the AI narrative go?)
Original source: Biteye
‘Solana's greatest advantage lies in its versatility, able to accommodate multiple different types of applications and tracks simultaneously.’
——Lily Liu, Chair of the Solana Foundation
Many relationships in the world are like seesaws. On one side, the price of ETH's tenth-anniversary coin is recovering, while on the other side, SOL is feeling a bit anxious—it's becoming even more difficult on the path of 'Ethereum killers,' and it has encountered a batch of its own 'killers'—suggesting a sense of karma.
However, moderate anxiety is not a bad thing for individuals or projects. For the battle-hardened Solana, it is even more familiar with how to cope. In this article, we intend to help you understand some of Solana's recent significant moves and discuss the current landscape of Solana AI and upcoming perspectives in depth.
01 A series of significant official moves
1. Alpenglow upgrade: replacing SoH, racing against faster competitors like SUI.
Alpenglow is referred to as the most significant upgrade of Solana's core protocol to date, comparable in significance to Ethereum's transition from PoW to PoS consensus, as the mission of Alpenglow is to replace the existing PoH (Proof of History) and Tower BFT (Tower Byzantine Fault Tolerance) consensus mechanisms.
Why replace the existing formula mechanism?
In the past, PoH did not need to synchronize timestamps like other blockchains, and with Tower BFT adopting a 'single leader packs, others vote' method, it greatly simplified block synchronization time, allowing Solana to lead all public chains in performance in its early days. However, this structure incurs significant computational overhead under high load, compounded by the single leader overload issue of Tower BFT, resulting in the frequent downtime problems that Solana has been criticized for.
Additionally, another point often criticized about Solana is the high operating costs of nodes, leading to insufficient decentralization.
How has Alpenglow improved?
In simple terms, Alpenglow removes PoH, a potential computing power killer, using Votor (stake-weighted voting) to process time sequences and confirmations with node clocks, reducing the computational burden on the leader node; and addressing the drawbacks of a single leader, it is designed to lay the groundwork for achieving multiple leaders proposing blocks simultaneously in the future.
Another core component, Rotor, is used to optimize block propagation and synchronization, reducing block confirmation time from 12.8 seconds to 150 milliseconds. At the same time, Rotor reduces communication overhead and computational burden between nodes, enabling weak nodes to participate efficiently, achieving 'performance upgrades without hardware upgrades.'
According to the validator yield calculator from Cogent Crypto, after the implementation of Alpenglow, the minimum staking amount required for validators to profit will drop from 4850 SOL (about $800,000) to 450 SOL (about $75,000).
Final expectations
The Alpenglow white paper states: 'Alpenglow will be a turning point for Solana. It is not just a new consensus protocol but is a key step for Solana towards competitive internet infrastructure.'
In simple terms: faster, more stable, cheaper, more scalable, and more decentralized, reclaiming the throne of performance and escaping the nightmare of downtime.
2. ICM Roadmap: Re-optimizing transactions, continuously moving towards 'on-chain Nasdaq'
After announcing the Alpenglow upgrade, Solana Labs, in collaboration with several core development teams within the ecosystem such as Anza and Jito, released a more detailed 'Internet Capital Markets' (ICM) roadmap.
In the past few years, Solana has attracted a large number of users and DeFi market share with low costs and fast transactions. However, the trading-specific chain Hyperliquid has rapidly risen, capturing over 70% of the on-chain contract market. The founder of Hyperliquid even publicly criticized Solana's speed as 'not fast enough.' This undoubtedly made Solana feel a sense of crisis.
Is Solana still not fast enough?
Currently, the final confirmation of transactions on Solana takes 12-13 seconds, while Hyperliquid's average confirmation time is about 0.2 seconds, and SUI's average confirmation time is 0.5 seconds.
It is expected that after the Alpenglow upgrade, Solana's confirmation time will reach 150 milliseconds, regaining speed advantages and achieving Visa-level transaction confirmation capabilities, but still falling short compared to Nasdaq's 'microsecond-level' high-frequency trading system.
Besides being faster, what else should we do?
Giving more power to dApps on the platform—this is the so-called ACE (Application-Controlled Execution)—allows dApps (smart contracts) to decide the priority of transactions themselves, enabling greater flexibility and strength when dApps handle complex issues.
Protecting market makers and addressing the MEV (high-frequency arbitrage attacks such as sandwich bots) issue: Hyperliquid's order matching engine provides higher priority for market maker orders, protecting them from MEV attacks, thus offering better prices and attracting retail participation. The roadmap for Solana ICM is similar, through the introduction of BAM and the completion of the Alpenglow upgrade, DEXs within the ecosystem will be capable of addressing the high-frequency arbitrage issue, improving market health and providing better prices for retail investors.
A more ambitious goal
In addition to aligning Hyperliquid in DeFi, Solana has a grander goal—a true 'on-chain Nasdaq'—to help more companies bypass the complex IPO process for on-chain financing.
Solana co-founder Anatoly Yakovenko recently stated in an interview that he hopes to complete the on-chain (RWA) of traditional financial assets within a year and provide compliant, open-source on-chain IPOs for entrepreneurs within five years, ultimately creating an open, low-cost, and decentralized internet capital market.
Ambitious enough, but it seems to be almost the goal of all major public chains. Currently, we see that Solana is continuously striving for reform in its underlying architecture, ultimate performance, application scenarios, and other aspects. However, it will take time and market validation for this strategy to break through in this highly competitive era.
02 In a tumultuous autumn, how will the AI narrative develop?
Public chains typically do not easily change consensus strategies, just as no one would casually change their nationality or relocate their household registration. Once a change occurs, it is often driven by significant threats.
In terms of core chain trading business, whether it's Hyperliquid, a trading-specific chain rapidly eroding Solana's advantages in the DEX perpetual contract market, or the rising star Sui as a general-purpose chain catching up in various fields such as DeFi and DeAI, along with hot topics like stablecoins, RWA, and micro-strategies pushing ETH back to the throne, Solana has felt considerable pressure, forcing it to accelerate upgrades to reverse the situation.
The AI field, which Solana prides itself on, is also not optimistic. After the previous DePIN and AI Agent MEME craze subsided, the Virtuals ecosystem rapidly rose, allowing Base to occupy an absolute advantage in the AI Agent field; BNB Chain, leveraging celebrity effects and exchange resources, diverted a significant amount of attention from AI MEME. Meanwhile, the rapid expansion of the Bittensor subnet and the rise of numerous AI Layer 1s are gradually forming a new force in the DeAI field.
In a moment, anxiety seems to have spread to all levels of the Solana chain, but the battle-hardened Solana clearly cannot easily give up. Currently, the Alpenglow upgrade is expected to bring strong confidence to the ecosystem. At the very least, Solana's officials have shown enough humility and pragmatism, clearly benchmarking their competitors, gradually filling in their shortcomings, and even aiming to become stronger.
Next, let us sort out Solana's AI ecosystem together and see if Solana's AI narrative can still help it usher in a new round of prosperity.
03 The AI landscape of Solana
The development time of AI projects on Solana is long, and the range of tracks is wide, making it difficult not to be amazed when reviewed. Here, we can roughly divide the AI projects on Solana into three stages.
Phase 1: The early DePIN ecosystem explodes, DeAI begins to grow.
The popularity of the DePIN concept has made Solana one of the earliest public chains to explore on-chain decentralized AI. These projects rely on Solana's powerful performance and low costs to build their own decentralized computing power, bandwidth, and data networks, laying an early foundation for the Solana AI ecosystem.
In terms of AI computing networks, early projects like Render, io.net, and Aethir were among the first to explore decentralized computing on-chain, but each has a different focus:
· Render focuses on rendering tasks for 3D animation and the metaverse, recording the allocation and payment of rendering tasks on Solana, and matching GPU providers and demanders through smart contracts.
· io.net mainly provides low-cost decentralized GPU computing power for AI and machine learning, automatically distributing computing power through its own network, with Solana used for settling $IO tokens and recording node contributions.
· Aethir optimizes real-time applications such as gaming through edge computing, distributing computing power to edge nodes through its own network, with Solana used for transaction recording and $ATH token incentives.
These projects were among the early explorers of the decentralized computing network that has long been a red ocean, as early entrants with significant funding are highly regarded by the market. However, these projects typically require high-performance GPUs to participate in the network, which poses a high barrier for ordinary individuals.
In contrast, Grass, Helium, Roam, and Gradient Network have a relatively good grassroots foundation.
· Grass is a decentralized data collection network, where users can automatically contribute bandwidth by downloading a browser plugin or application and collect network data through crawling activities. Users' contributions will be recorded on the Solana chain and rewarded with $GRASS.
· Roam's network aims to provide seamless and secure global internet coverage through community-provided WiFi nodes. Users can earn $ROAM tokens by providing WiFi coverage or verifying networks in the app; the project uses Solana for node management and payments.
· Gradient Network is a decentralized edge computing platform where users only need to install a plugin to contribute idle computing resources (such as mobile phones, laptops, etc.) to support AI inference, content distribution, and serverless functions, processing coordination and payments between devices through Solana's on-chain mechanism, ensuring efficient and secure decentralized computing.
· Helium provides IoT and mobile network coverage in a decentralized manner, using Solana to record hotspot data and transactions. Users purchase and deploy Helium Hotspots (hotspot devices, priced around $200-500) to provide network coverage and earn $HNT or $MOBILE token rewards. A more accessible way to participate is using the phone card launched by Helium and T-Mobile in the U.S., enabling a 'network mapping' function, sharing anonymous location data to help optimize network coverage, earning Cloud Points or $MOBILE tokens, and trying out the phone card for free.
These projects have actively explored the infrastructure field combining blockchain with AI (such as bandwidth, data, computing power, etc.), bringing tremendous imaginative space and confidence to the market, further opening a new chapter for DeAI. Although the token prices of these projects have retreated from their peaks, the network effects are still evident, and many projects have established partnerships with traditional large companies, gaining recognition in the mainstream market.
Phase 2: AI Agents bloom in multiple areas.
With the significant enhancement of LLM capabilities represented by ChatGPT, applications like AI Agents have rapidly developed in the past year. Solana, with its excellent performance and rich ecosystem, has become one of the first public chains to benefit from the prosperity of on-chain AI Agent tokens and related applications.
· Wayfinder is developed by Parallel Studios (invested by Solana Ventures, previously best known for the blockchain game Colony on Solana) to simplify cross-chain operations through AI Agents, allowing assets to easily cross chains between Solana, Ethereum, Polygon, and Base.
· ElizaOS is an open-source AI Agent framework that helps developers quickly create, deploy, and manage AI Agents on Solana. These AI Agents can quickly process information, execute trades, and interact with smart contracts, governed by DAO AI16Z. The DAO token $AI16Z once surpassed a market capitalization of $2.5 billion, becoming the leading AI token on Solana. However, due to its strong MEME attributes, its value later returned to rational levels.
· Holoworld is a multi-modal AI Agent launch platform that allows ordinary people to create, customize, and trade AI Agents, supporting the customization of 3D characters and videos, with all digital asset interactions managed through Solana's smart contracts.
· Moby AI was initially an AI Agent focused on Alpha research and providing real-time cryptocurrency news, and has now launched its terminal, focusing on Alpha mining and trading on the Solana chain.
· Hey Anon is a DeFAI protocol deployed on Solana that aims to simplify DeFi interactions through natural language processing and real-time data aggregation, helping users manage DeFi operations, obtain project updates, and analyze market trends.
Moreover, during the AI frenzy earlier this year on the Solana chain, many well-known Agent and application projects emerged, such as the Agent framework $ARC, $SWARMS, the DeFAI platform $GRIFFAIN, $BUZZ, the AI Agent launcher $HAT, and notable AI Agents $PIPPIN, $ZEREBRO, etc. However, as the tide receded, the prices and popularity of these projects quickly fell, and some projects are now in a stalled development state.
Phase 3: The era of post-chain AI, stepping more solidly towards on-chain DeAI.
As the market gradually returns to rationality, we notice that a new batch of projects has emerged on the Solana chain, washing away the noise of the AI MEME era, focusing on building decentralized AI infrastructure in a more practical and feasible manner on Solana.
· Nous Research is dedicated to training open-source AI models that can compete with mainstream large models like OpenAI through decentralized methods. Its core Psyche network significantly reduces inter-node communication frequency through compression technology, effectively solving the communication bandwidth bottleneck for decentralized AI training, enabling the network to support high-computational-demand AI training scenarios such as LLM pre-training, and records node contributions and incentive distribution through the Solana network. It has launched the Hermes series of open-source models based on the Llama model fine-tuning.
· Arcium was initially a privacy protocol Elusiv on Solana, which later transitioned to a broader privacy computing platform. Using MPC and ZKP technologies, it allows computation on encrypted data without exposing the data content, providing protection for user privacy in fields such as DeFi and Desci, and offering privacy infrastructure for AI model training, inference, and AI Agent applications that require attention to training data privacy.
· Neutral Trade is a hedge fund platform based on Solana, providing various AI-driven quantitative and automated trading strategies. Currently, in addition to common neutral and arbitrage strategies, there is also a well-performing CTA Momentum strategy, which is a multi-asset, high-liquidity strategy operated in collaboration with the well-known quantitative firm R* Research, with an annualized return of up to 95.11%, and the subscription limit of ten million dollars has been fully subscribed.
Although the heat of Solana AI has declined in this phase, it has a sense of sifting the wheat from the chaff. The quality of projects has significantly improved—capabilities for implementation are stronger, and they solve more practical problems—evolving from 'dream speakers' to 'doers.'
04 How do we view Solana's current AI ecosystem?
Through the above rough overview, we can see that the AI ecosystem on Solana has developed early, with a comprehensive coverage, and its overall strength remains very competitive among existing public chains.
At the same time, many excellent projects have emerged in the Solana ecosystem. For example, Nous Research is dedicated to solving the challenges of decentralized large-scale training of AI models, Grass collects massive training data through a decentralized network, and Arcium focuses on building privacy infrastructure. The competitors of these projects often require proprietary chains to support them, while they thrive on Solana, fully demonstrating Solana's outstanding capacity.
Although the current heat of on-chain AI has been diverted by Base, BNB Chain, and others, the possibility of a single chain dominating the AI field in the long term is almost zero. Cooperation rather than competition is more prevalent between chains. At the same time, with the Alpenglow upgrade, Solana's advantages in the AI field will further strengthen:
1. Fast and cost-effective: speed, throughput, and fees are the most critical factors for on-chain AI projects. Multiple AI Agents need to closely cooperate and transact under protocols like MCP, and decentralized training and data collection also rely on high-frequency, rapid interactions between nodes. Currently, Solana is already very efficient, and after the Alpenglow upgrade, confirmation times will be reduced to 150 milliseconds, further lowering latency and costs to better support real-time AI applications.
2. Good liquidity: As the currency of the project, the stability and smooth circulation of AI tokens significantly impact the project. Solana's current daily average DEX volume reaches $1.4 billion, ranking second in the entire network after Ethereum, and it boasts a mature and active DeFi ecosystem with Raydium, Jito, etc., making it easy for AI projects to connect to stable funding pools. After the upgrade, it is expected to attract more market makers to provide deep liquidity, helping AI tokens circulate and fund quickly.
3. Smart contract support: Solana supports parallel processing and more flexible development languages. Its virtual machine SVM can handle complex logic more efficiently, suitable for the more complex on-chain execution required for AI tasks (such as Agent decision-making or data validation). After the Alpenglow upgrade, contract functions will be even more powerful and run more stably, making it easier for AI developers to build applications such as prediction markets or automated training.
4. Decentralization: Although Solana has long been criticized for 'not being decentralized enough,' this is only because the reference point is Ethereum. Its current 2,000+ nodes far exceed many popular performance chains and proprietary chains. The Alpenglow upgrade will lower operational costs, and more nodes are expected to join, further enhancing decentralization and increasing the AI ecosystem's resistance to censorship and global distribution.
5. Ecological synergy: As a general-purpose chain, Solana's ecosystem is more complete, diverse, and mature, making it easier for AI projects to collaborate across fields, such as AI Agents using DePIN computing networks for seamless interaction with on-chain RWA assets. A comprehensive ecosystem can easily empower AI projects.
05 In conclusion
In the cryptocurrency world, we are always particularly excited about the birth of narratives and anxious about their demise. Solana, filled with references, is undoubtedly a master of narratives. 'On-chain Nasdaq' and AI are its two most important narratives.
The arrival of the Alpenglow upgrade is highly anticipated. At that time, Solana, which once fiercely competed with Ethereum and the entire Layer 2 ecosystem, will become stronger. But will it be strong enough to shoulder these two narratives and compete with more general-purpose chains and proprietary chains? Perhaps only time will tell the answer.
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