Solana has consolidated its position as one of the three giants in the cryptocurrency world. With the other two giants either already launching or about to launch spot ETFs, Solana is likely to follow suit in the near future, and its impact on SOL could be the biggest one yet.
Solana – Synchronize the world at the speed of light
Founded in 2018 by Anatoly Yakovenko and Raj Gokal, Solana was launched in 2020 as a proof-of-stake blockchain designed for high performance and mass adoption. With extremely low transaction costs, a wide range of decentralized applications, and a vibrant user and developer community, Solana has accumulated nearly 300 billion transactions and over $40 billion in total locked value.
In addition, Solana continues to stand out among numerous projects, with recent highlights including a large number of high-profile token launches, various projects migrating to Solana, key innovations such as token expansion releases, and unique use cases around Solana, such as order books, batch NFTs, DePINs, memecoins, and more.
The foundation of Solana’s success lies in its outstanding technology, which we believe provides a sustainable competitive advantage, particularly in three particularly significant aspects.
First is Solana’s historical proof, which provides a time concept for validators. Similar to mobile signal towers alternating transmission to avoid interference, historical proof allows validators to generate blocks when it’s their turn without the need for network consensus on the current block, bringing huge speed and scalability advantages.
Second, unlike the single-threaded virtual machine behind the current cryptocurrency field, Solana supports parallel transaction processing, greatly increasing throughput and leveraging the main source of performance improvement in computing speed. Most of today’s performance improvements come from adding more cores rather than increasing the performance of each core.
Finally, while Solana’s historically high hardware and bandwidth requirements have to some extent sacrificed decentralization to optimize speed and security, the natural decrease in costs will benefit Solana and may become the first project to truly solve the blockchain trilemma and ultimately achieve its vision of synchronizing the global state at the speed of light.
Underestimated Cryptocurrency ETFs have further potential
With Solana establishing its position after Bitcoin and Ethereum, and Bitcoin and Ethereum already (or soon) launching spot ETFs in the US, a natural question arises – will Solana be next? Spot ETFs are the main price driver in the current cycle, making this question particularly important.
Simply put, within the current framework, the path to launching spot digital asset ETFs in the US is clear. There needs to be a federally regulated futures market (currently there are no other futures markets besides Bitcoin and Ethereum), the futures market needs to exist for several years to prove enough correlation, and the futures ETF needs to be approved before spot products can be considered.
In other words, there will be no additional spot digital asset ETFs in the near future. However, we believe this severely underestimates the possibility of change.
In fact, change is already underway, with Donald Trump’s recent support for the crypto industry leading to the relaxation of the Democratic Party’s stance on digital assets in a tense election year.
While a month ago it was hard to imagine, we have seen both houses of Congress pass bipartisan measures to overturn the controversial SEC cryptocurrency accounting policy (SAB 121), as well as the House passing a comprehensive digital asset regulatory framework (FIT21).
While the current legislative and regulatory structure is unlikely to adopt rules allowing the launch of various spot digital asset ETFs, the Trump administration and liberal SEC commissioners may achieve this goal, especially through the Digital Asset Market Structure Act, which defines the market structure of digital assets as securities and commodities.
Not only is this scenario possible, it may even become a reality.
