In 2022, as SBF and the FTX empire crumbled, Solana was left for dead. The price of SOL plunged from $236 to just $13 in weeks. Startups abandoned the chain, major projects migrated, and investor confidence evaporated. Yet, by 2023, Solana defied expectations—its ecosystem rebounded with explosive growth, outpacing many of its peers.
What fueled this comeback? Behind the scenes, Solana made critical upgrades in infrastructure, economics, and community engagement. This article explores the strategic decisions that resurrected one of crypto’s most resilient public blockchains.
Client Diversity: Building Resilience Through Redundancy
Solana’s founding team, led by Anatoly Yakovenko, brought deep expertise from the telecom industry—particularly from Qualcomm, where they worked on high-performance systems under Moore’s Law. This background shaped Solana’s architecture: a high-speed blockchain that doesn’t cap hardware requirements for validators.
Unlike Bitcoin and Ethereum, which prioritize decentralization through client diversity, Solana initially relied heavily on a single client—Solana Labs’ implementation. This lack of redundancy contributed to three major network outages in 2022 and another in 2023. Most were caused by consensus failures during traffic spikes, often triggered by low-cost transactions flooding the network—a form of denial-of-service (DDoS) attack.
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Client diversity is crucial because if over two-thirds of validators run the same buggy software, the entire chain can fork or stall. Ethereum learned this lesson early and actively promoted multiple client implementations like Geth, Nethermind, and Besu.
Solana is now following suit. Firedancer, developed by Jump Crypto, introduces a new validator client built from scratch—designed for performance and resilience. Because it’s independently developed, it avoids shared codebase risks. Validators running both the original client and Firedancer can switch seamlessly during failures.
Another promising alternative is Sig, further diversifying the ecosystem. While Solana Labs still dominates, tools like Jito-Solana—a modified client used for MEV optimization—are gaining traction. Though not a full redundancy solution, rising Jito adoption signals growing validator willingness to experiment with alternatives.
The goal? No single client should exceed 33% market share. Achieving this will make Solana more robust against bugs and attacks—critical for a chain aiming to power consumer-grade applications.
Cost Model: A Smarter Fee Market for Scalability
A healthy blockchain needs a sustainable fee market. Solana learned this the hard way.
Initially, every transaction cost a flat 5,000 lamports (0.000005 SOL), regardless of complexity. While great for users, this made spam attacks cheap and frequent. In response, Solana introduced priority fees in 2023—first implemented by wallets like Solflare.
Now, 50% of priority fees go to validators; the other 50% are burned—similar to Ethereum’s EIP-1559. But Solana’s approach goes further with localized fee markets.
Here’s how it works:
Solana uses parallel execution across four cores. Each transaction must declare which part of the state it reads or writes to. If too many transactions target the same smart contract (a “hotspot”), Solana limits that contract to 25% of compute units (CUs) per block.
This means:
- A surge in activity on one app (e.g., Jupiter or Tensor) won’t spike fees network-wide.
- Only users interacting with that app face higher costs.
- Other applications continue operating smoothly.
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This design prevents “gas wars” from spilling over—a common pain point on Ethereum. However, challenges remain:
- Base fees still don’t scale with computation used.
- No global mempool means high-fee transactions aren’t guaranteed inclusion.
- MEV searchers exploit this by flooding the network with retries.
Still, Solana’s model shows promise: capital-efficient DeFi, predictable costs, and better user experience during peak demand.
Community Momentum: Developers, Airdrops & Cultural Revival
Steve Ballmer once shouted, “Developers! Developers! Developers!”—and he was right. Ecosystem growth starts with coders.
After FTX’s collapse, many assumed Solana’s developer base would vanish. Instead, it held strong. In 2023, around 3,000 monthly active developers contributed to public repos—a figure representing roughly 15% of all blockchain developers, per Electric Capital’s report.
Why did they stay?
- Low-cost development: Fast transactions and cheap deployment lower barriers.
- Strong support systems: Hackathons, grants via Superteam Earn, and foundation funding raised nearly $600 million for builders.
- Airdrop incentives: Tokens like Bonk and JTO rewarded early adopters and creators.
Bonk’s 2022 airdrop gave 5% to developers—now worth millions. Some earned over $500,000, equivalent to a pre-seed round—without giving up equity.
Then came the Saga phone, marketed as a crypto-native device. Despite being named “worst phone of 2023,” its eligibility for Bonk airdrops turned it into a collectible. Unopened units sold for over $5,000 on Solana—proof of shifting sentiment.
Projects like Jito, Pyth, and Jupiter continued the trend with tiered airdrops:
- Jito distributed JTO based on staking activity.
- Lower tiers received higher per-token value, rewarding small users.
- Marginfi awarded points for borrowing—not just staking—aligning incentives with protocol needs.
These programs aren’t just marketing—they’re behavioral engines, driving engagement and loyalty while filtering out bots through Sybil detection.
Ecosystem Growth: From DeFi to DePIN
🔹 Trading & DeFi
Post-FTX, Mercurial Finance faded, giving rise to Jupiter (DEX aggregator) and Meteora (revenue-generating AMM). With near-zero fees, users trade frequently—leading to higher transaction volume relative to TVL, a sign of superior capital efficiency.
While Ethereum leads in total value locked (TVL), Solana is catching up fast—especially in activity driven by real usage and airdrop farming.
🔹 Lending & Yield
Protocols like Marginfi and Kamino revitalized lending:
- Marginfi grew TVL from $30M to $485M in two months after launching points.
- Kamino saw an 8x surge ahead of its token launch.
These platforms blend yield with token incentives—creating flywheels of growth.
🔹 Liquid Staking
Over 90% of circulating SOL is staked, but most use native staking—locking up liquidity. Enter Marinade and Jito, offering mSOL and JitoSOL—liquid tokens usable in DeFi.
Jito also shares MEV revenue with stakers—a powerful incentive. However, liquidity risks exist: mSOL briefly decoupled from its peg in December 2023. Solutions like Sanctum Infinity—a multi-LST pool—are set to launch in Q1 2024 to stabilize the market.
🔹 NFTs & xNFTs
After DeGods and yOOts migrated, new projects like Claynosaurz and Mad Lads filled the gap. Mad Lads, built by ex-FTX devs, aims to create a compliant DeFi exchange called Backpack, powered by xNFTs—executable NFTs that run apps inside wallets.
Magic Eden remains dominant, but Tensor competes with advanced trading features and its own token incentives.
🔹 Infrastructure & Interoperability
Solana’s infrastructure has matured:
- Outages dropped from 10+ in 2022 to just one in 2023.
- Companies like Helius Labs and Triton provide RPC nodes and APIs.
- State compression slashes NFT minting costs—from $65M on Ethereum to **$247 for 1 million NFTs** on Solana.
Cross-chain efforts include:
- Neon: EVM on Solana with parallel processing.
- Eclipse: SVM computation with Ethereum settlement.
- Nitro: Cosmos L2 on Solana.
🔹 DePIN: Real-World Impact
Solana powers decentralized physical networks:
- Helium: Migrated to Solana in 2023; over 1M hotspots provide wireless coverage.
- Hivemapper: Crowdsourced mapping using dashcams; mapped 100M km of roads using $HONEY rewards.
Frequently Asked Questions
Q: What caused Solana’s network outages in 2022?
A: The main causes were lack of congestion control and validator lag during transaction floods—often exploited via spam attacks due to ultra-low fees.
Q: How does Solana prevent network-wide fee spikes?
A: Through localized fee markets—capping any single contract to 25% of compute units per block, isolating congestion.
Q: Is Solana more scalable than Ethereum?
A: In raw throughput and cost-efficiency, yes. Solana handles thousands of TPS at sub-cent fees; Ethereum relies on L2s for similar performance.
Q: Can I earn from staking SOL without locking funds?
A: Yes—via liquid staking protocols like Marinade or Jito, which issue mSOL or JitoSOL for use in DeFi.
Q: Why are airdrops so important on Solana?
A: They incentivize early adoption, reward real usage, and bootstrap liquidity—key for ecosystem growth post-FTX collapse.
Q: What are xNFTs?
A: Executable NFTs that can run code—like mini-apps inside wallets—pioneered by Backpack and Mad Lads.
Solana’s revival wasn’t luck—it was strategy. By focusing on performance, economic design, developer incentives, and real-world utility, it rebuilt trust and momentum. While challenges remain—from client centralization to MEV risks—the foundation is stronger than ever.
The next phase isn’t about competing with Ethereum—it’s about building what Ethereum can’t: mass-market applications that feel seamless, fast, and free.
And that future is already being coded—on Solana.