When it comes to launching apps, most developers choose to go where the crowd is thickest. Ethereum (ETH) and EOS have a combined 2,800 live dApps, not because they have the best technology, but because that’s where the party is. Large network effects make it nearly impossible for new platforms to poach projects away.
But some think the sector is getting ahead of itself. Solana, which announced $20M in Series A funding today, says that flaws in existing platforms will limit DLT’s potential. Using a new, highly scalable layer one blockchain, Solana hopes to provide the foundation for a “decentralized Libra” that will supercede legacy platforms.
“Solana is one of the most compelling layer 1 platforms we’ve evaluated to date,” explained Kyle Samani, co-founder and Managing Partner of Multicoin Capital, which led the Series A round.
With investments from twelve funds, including Blocktower Capital and NEO Global Capital, the $20M fundraise will finance engineering and development ahead of Solana’s mainnet launch.
What is Solana?
Solana is a highly-scalable Proof-of-Stake (PoS) platform that can handle more than 50,000 transactions per second, with more than 200 nodes running on testnet around the world. A Solana spokesperson says the project is planning to raise more funds in an IEO in October.
Many projects rely on sharding, which divides the computational work of a blockchain among multiple groups of nodes. Zilliqa (ZIL) relies on sharding to improve network throughput, and it is also regarded as a potential avenue to enhance Ethereum’s throughput.
But some have called it a 1960s solution. Some projects have reported implementation issues, with individual shards challenging network cohesiveness and hampering performance.
State channels, while slightly better, can only ever be as secure as the underwriting capital. Order books running in state channels fracture liquidity and cannot easily remain consistent, a Solana spokesperson explained, which could mean varying prices and arbitrage opportunities.
“We’ve seen the challenges that developers are facing with layer 2 and sharding solutions,” said Anatoly Yakovenko, Solana’s co-founder and project lead. Their multi-threaded system provides significant scaling potential without “any additional overhead in terms of UX, latency, or composability for developers.”
Does Solana have a chance?
Superior tech is no guarantee of success – just ask the guys behind Betamax. Solana is entering a highly saturated space, with platforms vying for the attention of a small, but growing, developer community.
Among their biggest rivals will be Ethereum, which has the largest network in the industry at over 2,600 live dApps, as well as EOS with its $4bn war chest.
There’s also Radix (XRD), which has been in development since 2012. Like Solana, Radix created a scaling solution at layer one. The network could process Bitcoin’s entire transaction history in little over fifteen minutes, handling more than a million transactions per second during testing this June.
But Solana is confident they have the tech and the community to become the platform of choice for developers in the not-too-distant future. “Solana offers an extremely compelling set of features, with almost no trade-offs,” Samani wrote in an email. “Solana provides things that are indisputably better than the competition: it’s the fastest and has the lowest costs.”
A Solana spokesperson added that they had adopted a “multi-pronged approach” to ensure they come out of the gate storming. In addition to partnerships with Civic and GlobalID, they are working with a Fortune 200 telecoms giant on creating new payment and ID features. The network already has more than 130 validator nodes, with projects, including Cosmos (COSMOS), developing new ecosystem tools and applications.
Although built in Rust, Solana will also support Move: the programming language developed by the Libra project. “[We] plan on being first to market to run Move and it will run faster and cheaper than on Libra,” said the spokesperson. “Our internal tests already show us meeting or beating Libra’s performance numbers.”
Although details on Libra were only announced this month, the Facebook-backed project has received significant global attention, as the Congressional hearing two weeks ago highlighted.
Solana is betting that Libra’s high profile will bring more developers to start building in Move. “Solana can draw Libra developers who want to deploy their apps in permissionless environments as opposed to Libra’s permissioned setting with virtually no changes,” Samani said.
Posing as the ‘decentralized Libra’ will enable them to tap into this emerging market, long before other platforms have a chance to support it. While they may be later than most other blockchain platforms, Solana may actually be right on time for the real party.