Solana Token’s Rally Reflects Protocol’s Potential, Says Web3 Advocate

The seemingly fundamentals-defying surge of Solana’s native token, SOL, may reflect the project’s potential rather than its current technical performance, according to Chris Zhu, the CEO of Sonic. To support this assertion, Zhu highlights Solana’s ecosystem growth despite recent outages.

Solana Stress Tests Lead to Upgrades and Improvements

Nevertheless, in his written responses shared with Bitcoin.com News, Zhu argues that the Solana team has proactively addressed issues through upgrades and optimizations to enhance network stability. He also points to Solana’s upcoming Firedancer upgrade and domain-specific innovations like Hypergrid Framework and Sonic SVM as evidence of steps that will likely sustain SOL’s momentum.

Addressing concerns that Solana lacks sufficient infrastructure to enable developers to build more innovative solutions, the CEO stated that the protocol undergoes continuous stress testing by creative builders. These tests inevitably lead to upgrades and improvements necessary for supporting a variety of decentralized applications and projects within the ecosystem.

Meanwhile, when asked about venture capitalists’ interest in Web3 projects in 2024, Zhu noted a more measured approach compared to three years ago. While there has been renewed interest from venture capital firms, their pace of investment appears less frenzied, he said. Factors such as the maturity of the crypto market and increased institutional investor participation contribute to this trend.

Below are Zhu’s answers to the questions sent.

Bitcoin.com News (BCN): Solana blockchain’s native token has been one of the best-performing cryptocurrencies in the current bull cycle. Despite this, some experts argue the network itself is deficient in infrastructure that enables developers to build more innovative games. Do you agree that Solana lacks sufficient infrastructure? If so, what specific types of infrastructure are missing, and how would their development benefit the Solana network and its users?

Chris Zhu (CZ): Infrastructure development on Solana is an ongoing process, and Solana has shown commitment to improving its ecosystem. The network is in a constant push and pull – being stress-tested by creative builders, which is responded to with updates and improvements. The Ore project was an interesting example of this a few months ago, and Solana Foundation and various dev teams have been working on innovative infrastructure upgrades – such as the Firedancer arriving soon.

While Solana has made significant progress in providing a high-performance blockchain suitable for gaming, there is always room for improvement in infrastructure to support more innovative and complex use cases. As the Solana blockchain is open source, we’re seeing various teams making their own contributions in building improvements for specific domains of their interest and speciality.

We think that Solana is still a generalized blockchain and additional infrastructure is needed to be built for developers and builders within specialized domains – especially if we want to see a greater variety of dapps and projects in the Solana ecosystem. This can include technical infrastructure, such as customized developer tooling, new data primitives, and blockchain abstraction solutions. However, we also believe a “soft” infrastructure is necessary for cultivating specific domains of builders. This can include “soft” builder support such as developer bootstrapping, go-to-market strategy, and marketing support solutions.

BCN: Is it possible that Solana’s lack of certain infrastructure is intentional to preserve its high level of scalability?

CZ: It’s important to note that while some limitations could be intentional, others might simply be areas yet to be fully developed. As blockchain technology evolves, Solana, like other platforms, continuously adapts its approach to balance performance, functionality, and developer needs. We think the Solana ecosystem’s growth and development is a balancing act of a few variables:

1. Evolving ecosystem: While some limitations might be intentional, Solana is actively working on expanding its capabilities without compromising performance.
2. Roll-up solutions: Some infrastructure gaps might be intentionally left for rollups and layer- solutions to fill, allowing the base layer to remain lean and fast.
3. Community-driven development: Solana encourages community-led development of tools and infrastructure, which could be a strategic choice to maintain core simplicity while fostering ecosystem growth.

BCN: Focusing on your project, Sonic, which is described as an atomic Solana Virtual Machine (SVM) chain for game economies, can you briefly tell our users how the Sonic infrastructure would benefit the Solana blockchain and its users?

CZ: Yes – happy to explain here, and to help clarify our value-add, will boil it down to two verticals: technical infrastructure, and “soft” infrastructure. This is represented by HyperGrid Framework, and Sonic SVM in that order.

HyperGrid Framework is a horizontal scaling solution for dedicated Solana Virtual Machine (SVM). The framework allows custom SVMs to be launched on top of Solana, which enables the tailored design of the SVM to support dapps and projects within a specific domain, such as gaming. What makes HyperGrid Framework stand out is the native support for “atomic interoperability” – where it gives dapp builders full control over sharing liquidity with Solana mainnet – remaining composable with Solana and other SVM ecosystems built with HyperGrid. Utilizing HyperGrid’s customizability, Sonic SVM is able to provide custom tooling for game devs such as: a multi-VM platform, new data primitives for game assets, and sovereign game environments.

Sonic SVM is the first gaming SVM, built by our team using HyperGrid Framework. It is designed to expand Solana’s gaming ecosystem. Besides the additional technical infrastructure mentioned above, Sonic is focused on providing “soft” infrastructure to ecosystem games – such as project bootstrapping, go-to-market strategy support, as well as post-launch marketing and traction campaigns. We recognize that what makes a game successful is not only determined by its technicalities – the “soft” infrastructure we provide is designed to enhance and raise awareness for not just our individual games, but Web3 gaming on Solana as a whole.

BCN: Could building additional infrastructure on Solana eventually lead to network congestion, undermining its core selling point and potentially introducing new challenges?

CZ: To address the congestion issue, the technical infrastructure we’ve built – HyperGrid Framework – is specifically designed to enable new infrastructure without the cost of bringing on congestion problems.

The dedicated Solana Virtual Machine (SVM) ecosystem rollup operators achieve potentially infinite transaction throughput by enabling horizontal scaling across multiple grids, exemplified by Sonic – a gaming-specific grid that settles on Solana.

HyperGrid makes it possible for program authors on Solana to implement high-performance transactions off Solana mainnet but have them finalize on Solana and remain composable.

BCN: Despite its native token SOL’s impressive performance, Solana has been plagued by network outages, raising questions about its capacity to compete with Ethereum. How detrimental are these pauses to Solana’s long-term prospects? Why does SOL’s value seem unaffected by the network’s underlying issues?

CZ: To answer this question, I will break it down into two segments: Solana’s technical fundamentals, and the token price action.

Regarding the technical fundamentals of Solana, there are ongoing improvements. Solana’s team has been proactive in addressing these issues, implementing various upgrades and optimizations to enhance network stability. We’re very excited to see the Firedancer upgrade being implemented soon, and there are domain-specific innovations such as HyperGrid Framework and Sonic SVM. Ethereum has not yet been able to replicate Solana’s success in providing cheap and fast transactions like Solana, even via the various L2s that have been launched on the Ethereum ecosystem. Solana will remain to have a solid competitive edge.

$SOL market performance is a more complicated topic involving various market dynamics, and sometimes being speculative in nature. The value might reflect a project’s potential rather than current technical performance. Additionally, despite the outages, Solana’s ecosystem has continued to expand, with new projects and users joining the network. The on-chain transactions and value have grown drastically, especially with Solana being the main playground for the recent memecoin phenomena. DeFi protocols on Solana have also been rivalling volumes and TVL of respective protocols that are live on Ethereum. Overall, we see a very strong investor, builder, and retail culture that will thrive for years to come – and are very excited to expand the gaming domain on Solana via Sonic SVM.

BCN: In 2021, as bitcoin and the rest of the cryptocurrency market surged, with BTC peaking near $70,000, venture capitalists poured money into crypto startups. Bitcoin has again reached a new all-time high in 2024 and has sustained a price above $60,000 for a considerable period. Are venture capitalists investing at the same pace as they did in 2021, or is the current influx of capital slower? How does this bull run differ from the one in 2021?

CZ: When it comes to the current VC investment pace compared to 2021, we’re seeing a more measured approach: While there is certainly renewed interest from VCs in crypto startups, the pace of investment appears to be more measured compared to the frenzy seen in 2021. The crypto market has matured quite a bit since then, with clearer regulatory frameworks in many countries and more institutional participation. VCs seem to be more selective, focusing on projects with strong fundamentals and clear use cases rather than speculative bets.

There have been various narratives that have gotten traction in 2024, such as Bitcoin smart contract infrastructure, Ethereum Layer 2s, and various dapps such as Friendtech(Social-fi) and Rollbit(Web3 casino). We are seeing a renewed interest in Web3 gaming, especially on Solana, which is why we are dedicated to expanding this ecosystem with Sonic SVM. We are thankful to have great investors such as Bitkraft, Galaxy Interactive, and Big Brain Holdings, and other investors behind our latest Series A round – validating this thesis and giving their full support in bringing this vision into reality. The current bull run appears to be characterized by more sustainable growth and a focus on fundamentally strong projects – also reflected via our efforts at Sonic, with games live on testnet and fully preparing for our Mainnet launch this year.

What are your thoughts on this interview? Share your opinion in the comments section below.

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