After Raising Over $314 Million in Funding, What’s Next for Solana?

There are plans to launch an incubation studio to speed up the development of Solana-based projects and set up a framework for investment, among other developments.

By
Cole Petit
on
June 12, 2021
Category:
Breaking News

Introduction 

In a private token sale round led by Andreessen Horowitz and Polychain Capital, Solana Labs raised a whopping sum of approximately $314 million. According to Decrypt, Solana Labs could potentially raise a large enough sum of money to compete with Ethereum in terms of funding. The current sum raised is a solid confirmation of Decrypt’s predictions, which are bullish for the chain. The funding will be used to power new innovation from Solana Labs.


Solana Blockchain: The Story So Far

The blockchain, which launched last year, is now regarded as a legitimate competitor for Ethereum. Although the Ethereum network remains the most prominent blockchain platform for budding Decentralized Finance (DeFi) projects and applications, Solana is poised to stake its claim in the space. As seen on their official website, over 90 projects are currently building on the fast and cheap blockchain. More projects seem to spring up every day to announce their launch, and they are beginning to receive consistent support from the community.

Solana offers users faster transaction speed, with cheap fees, unlike Ethereum. Presently, Ethereum’s transaction capacity is at 15 transactions per second which is a very thin amount compared to Solana’s capacity. Solana offers up to 50000 transactions per second. In terms of transaction fees, Ethereum charges up to $6 for every transaction, while Solana charges fees as low as $0.00001 per transaction. Ethereum fees are expected to reduce when the network completes its expected update, but the speed of Solana is hard to touch - even for an enormous network like Ethereum.

With these core features, Solana has become a significant rival to Ethereum. CEO of Solana Labs, Anatoly Yakovenko, also talked about the issues of slow speed and high transaction fees. He disclosed that the blockchain is convinced that they have solved the problem of scalability. According to him, Solana Labs will now proceed to attempt to expand its ecosystem to a billion users. This is a lofty goal, but the extensive funding recently received is an indicator that those user numbers are not out of reach.


What Next For Solana? 

Source

The funding round featured many participants, including CMS Holdings, Alameda Research, Jump Trading, and many others. This is a strong indication that reputable firms are interested in the prospects of the Solana blockchain. Funding will be used to develop the ecosystem, particularly through Solana Labs. Solana Labs plans to launch an incubation studio to speed up the development of Solana-based projects and set up a framework for more investment. This will make launching projects on the chain a simple process, with plenty of support for new developers

Projects like Serum and Raydium have all the markings of high-quality, long term exchange platforms, while HXRO and Mango Markets provide unique options for complex trading. Serum has developed an entire project, titled EcoSerum, based around building the Solana network. Raydium offers unique ways to mine liquidity such as the creation of permissionless LPs. The recent funding will serve as capital to create even more projects with the same success achieved by these Solana-based projects. Solana Labs serves as the starting point of creation on the network, and the windfall of funding creates a positive support system for growth.


Big Brother ETH

While the funding is big news for Solana, it is far from its ultimate goal. Solana still has a long way to go when placed side by side with Ethereum. There is a massive difference in Total Value Locked (TVL), and the price of the SOL token is exponentially less than ETH. However, the recent developments in the ecosystem have shown that it could scale massively. The difference in coding language (Solana is developed in the less-common Rust language) has scared some developers away, but more innovators are beginning to pick up the basics. Solana’s relatively youthful age also lends it promise for future growth, which is constantly noted by collaborators. By enhancing Solana Labs, the team is ensuring that new projects have the most beneficial environment to start their projects.

Managing partner of Polychain Capital, Olaf Carlson-Wee was quoted by The Block Crypto speaking highly positively of the blockchain.

In Carlson-Wee’s words, “we are thrilled to see strong developer activity and a continually expanding community grow around Solana.”

The significance behind the belief of companies like Polychain Capital is the potential scalability could lead to Solana becoming a major DeFi force for years to come. While the funding amount may seem trivial compared to the massive amount of TVL locked in DeFi platforms such as Ethereum, it is a tremendous amount for the platform to boost their future endeavors. There is a strong, wealthy community backing the blockchain - and it has a very bright future thanks to that foundation.

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Cole Petit

Writer/Editor with an interest specifically in DeFi and stablecoin projects. Firm believer in the future of digitalized currency.