Author: Biteye Core Contributor Anci
Reprinted from: White55, Mars Finance
"Solana's greatest advantage lies in its universality, able to simultaneously support multiple different types of applications and tracks."
—Lily Liu, Chairwoman of the Solana Foundation
Many relationships in the world are like seesaws. On one side, ETH's tenth anniversary sees a price revival, while on the other, SOL is experiencing some anxiety—it's getting harder than ever to be the 'Ethereum killer,' and it's facing a batch of its own 'killers'—it feels somewhat like a cycle of fortunes.
However, moderate anxiety is not a bad thing for individuals or projects. For the battle-hardened Solana, it is even more adept at handling such situations. This article intends to take you through some recent significant moves by Solana officials and delve into the current landscape of Solana AI and future perspectives.
01. Frequent Official Moves
1. Alpenglow Upgrade: Replacing SoH, Racing for Faster Speed and Competing with SUI and Others
Alpenglow is considered the most significant upgrade to the Solana core protocol to date, comparable in significance to Ethereum's transition from PoW to PoS consensus, as Alpenglow's mission 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, due to not needing to synchronize timestamps like other blockchains and using Tower BFT's method of 'one person packages, others vote,' significantly simplified the block synchronization time, allowing Solana to lead in performance among all public chains in its early days. However, this structure can cause huge computational overhead under high load, combined with the single-leader overload problem of Tower BFT, leading to the frequent outages that Solana is often criticized for.
Additionally, one common complaint about Solana is the high operating costs for nodes, leading to insufficient decentralization.
How did Alpenglow improve?
In simple terms, Alpenglow removes PoH, a potential computing power killer, using Votor (stake-weighted voting) to handle time order and confirmation, reducing the computational burden on leading nodes; and addressing the drawbacks of single leadership, paving the way for multiple leaders to propose blocks simultaneously in the future.
Another core component, Rotor, is used to optimize block propagation and synchronization, reducing the block confirmation time from 12.8 seconds to 150 milliseconds. Additionally, since Rotor reduces the communication overhead and computational burden between nodes, even weak nodes can participate efficiently, achieving a "performance upgrade without hardware upgrades."
According to Cogent Crypto's validator earnings calculator, after the Alpenglow implementation, the minimum staking amount required for validators to profit will decrease from 4,850 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 a key step for Solana to move towards internet infrastructure-level competitiveness."
In simple terms: faster, more stable, cheaper, more scalable, and more decentralized, reclaiming the throne of performance and shaking off the nightmare of outages.
2. ICM Roadmap: Continuously Optimizing Transactions, Progressing Towards 'On-Chain Nasdaq'
After announcing the Alpenglow upgrade, Solana Labs, together with several core development teams within 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 due to its low costs and fast transactions. However, the transaction-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 instilled a sense of crisis in Solana.
Isn't Solana fast enough?
Currently, the final confirmation time for transactions on Solana is 12-13 seconds, the average confirmation time for Hyperliquid is about 0.2 seconds, and the average confirmation time on SUI is 0.5 seconds.
It is expected that after the Alpenglow upgrade, Solana's confirmation time will reach 150 milliseconds, reclaiming its speed advantage and achieving transaction confirmation capabilities at Visa levels, although it still lags behind Nasdaq's "microsecond-level" high-frequency trading systems.
Besides being faster, what else needs to be done?
Empowering dApps on the platform—what is known as ACE (Application-Controlled Execution)—allows dApps (smart contracts) to determine their own transaction priorities, enabling them to be more flexible and powerful in handling complex issues.
Protecting market makers and addressing the MEV (high-frequency arbitrage attacks like sandwich bots) issue: Hyperliquid's order matching engine provides higher priority for market maker orders, protecting them from MEV attacks, thus offering better prices to attract retail investors. The Solana ICM roadmap is similar; through the introduction of BAM and the completion of the Alpenglow upgrade, DEXs within the ecosystem will be empowered to address the high-frequency arbitrage issue, improving market health and providing better prices for retail investors.
A more ambitious goal
In addition to aligning Hyperliquid with DeFi, Solana has a more ambitious goal—a true "on-chain Nasdaq"—to help more companies bypass the complicated IPO process and achieve on-chain financing.
Anatoly Yakovenko, co-founder of Solana, recently stated in an interview that he hopes to complete the onboarding of traditional financial assets (RWA) within a year, provide compliant, open-source on-chain IPOs for entrepreneurs within five years, and ultimately create an open, low-cost, decentralized internet capital market.
A grand ambition, but it seems to be nearly the goal of all leading public chains. Currently, we see Solana continually striving for reform in underlying architecture, ultimate performance, and application scenarios. However, this strategy requires time and market validation to break through in this highly competitive era.
02. A Difficult Autumn: How Will the AI Narrative Develop?
Public chains typically do not easily change consensus strategies, just as no one casually changes nationality or relocates their household registration. Once a change occurs, it is often driven by significant threats.
In terms of core chain trading business, whether it is Hyperliquid, as a trading-specific chain, rapidly eroding Solana's advantages in the DEX perpetual contract market, or the rising star Sui catching up in multiple fields like DeFi and DeAI, alongside hot topics like stablecoins, RWA, and micro-strategies pushing ETH back to the throne, Solana feels considerable pressure, forcing it to accelerate upgrades to reverse the situation.
The AI field, which Solana takes pride in, is also not optimistic. After the DePIN and AI Agent MEME boom faded, the Virtuals ecosystem rapidly emerged, giving Base an absolute advantage in the AI Agent field; BNB Chain leveraged celebrity effects and exchange resources to divert a significant amount of attention from AI MEME. In terms of decentralized AI infrastructure, 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.
For a time, anxiety seemed to have spread to all levels of the Solana chain, but after weathering many storms, Solana is obviously not going to give up easily. 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 targeting competitors and gradually addressing shortcomings, even aiming to become stronger.
Next, let's sort through Solana's AI ecosystem and see if Solana's AI narrative can still help it usher in a new wave of prosperity.
03. Solana's AI Landscape
The development duration and breadth of AI projects on Solana are astonishing. Here, we can divide the AI projects on Solana into three stages based on approximate time intervals.
Phase One: The Early Explosion of the DePIN Ecosystem and the Emergence of DeAI
The popularity of the DePIN concept has made Solana one of the earliest public chains to explore on-chain decentralized AI. These projects leverage Solana's powerful performance and low costs to build their own decentralized networks for computing power, bandwidth, and data, laying the early foundation for the Solana AI ecosystem.
In terms of AI computing networks, early projects like Render, io.net, and Aethir have attempted on-chain decentralized computing in varying focuses:
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 demand through smart contracts.
io.net primarily provides low-cost decentralized GPU computing power for AI and machine learning, automatically allocating computing power through its own network. Solana is used to settle $IO tokens and record node contributions.
Aethir mainly optimizes real-time applications such as gaming through edge computing, distributing computing power to edge nodes over its own network. Solana is used for transaction recording and $ATH token incentives.
These projects are among the early explorers of the already crowded decentralized computing network. As early entrants, they have raised significant funds and are viewed favorably by the market. However, these projects typically require high-performance GPUs to participate in the network, posing a high barrier for ordinary users.
In contrast, projects like Grass, Helium, Roam, and Gradient Network have a better grassroots foundation.
Grass is a decentralized data collection network where users can automatically contribute bandwidth by downloading a browser plugin or app, and collect network data through activities like web scraping. Users' contributions are recorded on the Solana chain and rewarded with $GRASS tokens.
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 the network through the app, with the project using Solana for node management and payments.
Gradient Network is a decentralized edge computing platform where users can simply install a plugin to contribute idle computing resources (such as 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 coverage for IoT and mobile networks in a decentralized manner, utilizing Solana to record hotspot data and transactions. Users purchase and deploy Helium Hotspots (hotspot devices priced around $200-500) to provide network coverage, earning $HNT or $MOBILE tokens as rewards. A more accessible participation method is using the phone cards launched by Helium and T-Mobile in the U.S., activating the 'network mapping' feature to share anonymous location data to help optimize network coverage, earning Cloud Points or $MOBILE tokens, and trying the phone card for free.
These projects have actively explored the infrastructure field combining blockchain and AI (such as bandwidth, data, computing power, etc.), which not only brings great imagination and confidence to the market but also opens a new chapter for DeAI. Although the token prices of these projects have fallen from their highs, the network effects are still evident, and many projects have already established partnerships with traditional large companies, gaining mainstream market recognition.
Phase Two: AI Agents Blooming in Multiple Directions
With the significant enhancement of LLM capabilities represented by ChatGPT, applications such as AI Agents have rapidly developed over the past year. Solana, with its excellent performance and rich ecosystem, has become one of the earliest public chains to reap the benefits of on-chain AI Agent tokens and related application prosperity.
Wayfinder, developed by Parallel Studios (backed by Solana Ventures, with previous work being the blockchain game Colony on Solana), simplifies cross-chain operations through AI Agents, allowing assets to easily transfer between multiple blockchains, including 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 rapidly process information, execute transactions, and interact with smart contracts, governed by DAO AI16Z. The DAO token $AI16Z reached a market cap of over $2.5 billion, briefly becoming the leading AI token on Solana. However, due to its strong MEME attributes, it later returned to rational value.
Holoworld is a multimodal 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 focused on Alpha research and providing real-time crypto information but has since launched its own 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, receive project updates, and analyze market trends.
Additionally, many known Agent and application projects emerged on the Solana chain during the AI boom earlier this year, such as the Agent framework $ARC, $SWARMS, the DeFAI platform $GRIFFAIN, $BUZZ, the AI Agent launcher $HAT, and well-known AI Agents $PIPPIN, $ZEREBRO, etc. However, after the tide receded, the token prices and popularity of these projects rapidly declined, and some projects are now in a state of stagnation.
Phase Three: The Post-On-Chain AI Era, Stepping Steadily Towards On-Chain DeAI
As the market gradually returns to rationality, we notice that a new batch of projects is emerging on the Solana chain, cleaning up the noise of the AI MEME era and building the infrastructure for decentralized AI on Solana in a more solid and feasible manner.
Nous Research is dedicated to training open-source AI models that can compete with mainstream large models like OpenAI in a decentralized manner. Its core Psyche network significantly reduces the communication frequency between nodes through compression technology, effectively solving the bandwidth bottleneck for decentralized AI training, enabling the network to support high computational demand scenarios like LLM pre-training, and recording node contributions and incentive distribution through the Solana network. It has launched the Hermes series of open-source models based on fine-tuning the Llama model.
Arcium originally started as a privacy protocol on Solana called Elusiv but later transitioned to a broader privacy computing platform. By using MPC and ZKP technologies, it allows computation on encrypted data without exposing its contents, providing privacy protection for user data in fields like DeFi and Desci, as well as 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, offering various AI-driven quantitative and automated trading strategies. Currently, in addition to common quantitative neutral strategies and arbitrage strategies, it also has a well-performing CTA Momentum strategy, which is a multi-asset, high-liquidity strategy operated in collaboration with the well-known quantitative company R* Research, achieving an annualized return of 95.11%, with a subscription limit of $10 million fully reached.
Although the enthusiasm for Solana AI has declined during this phase, it reflects a sense of natural selection. The quality of projects has significantly improved—capable of practical implementations and addressing more real-world problems—evolving from 'dream speech' to 'pragmatism.'
04. How Do We View Solana's Current AI Ecosystem?
From the above overview, we can see that Solana's AI ecosystem has developed early and has a comprehensive coverage scope, showing very competitive overall strength 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 vast training data through a decentralized network, and Arcium focuses on building privacy infrastructure. These projects often require proprietary chains to support them, yet they thrive on Solana, fully demonstrating Solana's excellent carrying capacity.
Despite the current enthusiasm for on-chain AI being diverted to Base, BNB Chain, and others, the long-term possibility of one chain dominating the AI field is almost zero. The relationship between chains is more about cooperation than competition. At the same time, with the Alpenglow upgrade, Solana's advantages in the AI field will be further strengthened.
1. Fast and Cost-Effective: Speed, throughput, and cost are the most important factors for on-chain AI projects. Multiple AI Agents need to closely collaborate and trade under protocols like MCP; decentralized training, data collection, and other tasks also rely on high-frequency and rapid interactions between nodes. Currently, Solana is very efficient, and after the Alpenglow upgrade, the confirmation time will be reduced to 150 milliseconds, further lowering latency and costs, better supporting 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 currently has an average daily DEX volume of $1.4 billion, ranking second in the entire network, only behind Ethereum, and has mature and active DeFi ecosystems like Raydium and Jito, allowing AI projects to easily access stable liquidity pools. The upgrade is expected to attract more market makers, providing deeper liquidity and helping AI tokens circulate and fund rapidly.
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 executions required for AI tasks (such as agent decision-making or data validation). After the Alpenglow upgrade, the contract functions will be more powerful and stable, making it easier for AI developers to build applications like prediction markets or automated training.
4. Decentralization: Although Solana has long been criticized for being "not decentralized enough," this is only in reference to 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 strengthening the AI ecosystem's resistance to censorship and global distribution.
5. Ecological Linkage: As a universal chain, Solana's ecosystem is more complete, diverse, and mature, making it easier for AI projects to collaborate across fields. For example, AI Agents use DePIN computing networks for seamless interaction with on-chain RWA assets. A comprehensive ecosystem can easily empower AI projects.
05. Final Thoughts
In the crypto world, we are always particularly excited about the birth of narratives and anxious about their demise. Solana, full of memes, is a master of narratives. 'On-Chain Nasdaq' and AI are undoubtedly its two most important narratives.
The arrival of the Alpenglow upgrade is highly anticipated. At that time, Solana, which once fought Ethereum and the entire Layer 2 ecosystem on its own, will become even more powerful. But is it strong enough to bear these two narratives and compete with more universal and proprietary chains? Perhaps only time will tell.
