Original Source: Biteye
"The biggest advantage of Solana lies in its versatility, capable of supporting multiple different types of applications and tracks simultaneously." — Lily Liu, Chair of the Solana Foundation
Many relationships in the world are like a seesaw. On one side, the price of ETH is recovering as it celebrates its tenth anniversary, while on the other side, SOL is feeling a bit anxious — the path of the "Ethereum killer" has become even more challenging, and it has also encountered a batch of its own "killers" — it feels somewhat like a turn of fortune.
However, moderate anxiety is not necessarily a bad thing for individuals or projects. For the battle-hardened Solana, dealing with it is even more familiar. In this article, we intend to take you through some significant recent moves by Solana's officials and delve into the current landscape and future outlook of Solana AI in the AI sector.
01 Frequent Major Moves from Officials
1. Alpenglow Upgrade: Replacing SoH, Racing Against Competitors like SUI with Faster Speed
Alpenglow is regarded as the most significant upgrade to the Solana core protocol to date, comparable in significance to Ethereum's transition from PoW to PoS consensus, as Alpenglow's mission is to replace the existing PoH (Proof of History) and Tower BFT (Tower Byzantine Fault Tolerance) consensus mechanisms.
Why replace the existing formula mechanisms?
In the past, PoH did not require synchronization of timestamps like other blockchains, and Tower BFT simplified block synchronization time significantly with its "one person packages, others vote" approach, allowing Solana to lead all public chains in high performance in its early days. However, this structure incurs significant computational overhead during high loads, compounded by the single-leader overload issue of Tower BFT, leading to the frequent downtime problems that Solana has been criticized for.
Additionally, Solana has often been criticized for the high operational costs of nodes, resulting in insufficient decentralization.
How does Alpenglow improve?
In simple terms, Alpenglow removes the potential computational killer PoH, using Votor (stake-weighted voting) combined with node clock processing time order and confirmation, reducing the computational burden on the leader node; and addressing the drawbacks of single leadership, it is designed to pave the way for multiple leaders to propose blocks simultaneously in the future.
Another core component, Rotor, is used to optimize block propagation and synchronization, reducing block confirmation time from 12.8 seconds to 150 milliseconds. Additionally, since Rotor reduces communication overhead and computational burden between nodes, it allows weaker nodes to participate efficiently, achieving "performance upgrades without hardware upgrades."
According to Cogent Crypto's validator yield calculator, after the implementation of Alpenglow, the minimum staking amount required for validators to profit will drop from 4850 SOL (approximately $800,000) to 450 SOL (approximately $75,000).
Final Expectations
The Alpenglow white paper states: "Alpenglow will be a turning point for Solana; it is not just a new consensus protocol but a key step for Solana to achieve competitive strength at the level of internet infrastructure."
In simple terms: faster, more stable, cheaper, more scalable, and more decentralized, reclaiming the throne of performance and shaking off the nightmare of downtime.
2. ICM Roadmap: Re-optimizing Transactions, Continuing Towards "On-chain Nasdaq"
After announcing the Alpenglow upgrade, Solana Labs, in collaboration with several core development teams within the ecosystem such as Anza and Jito, released a more specific "Internet Capital Markets" (ICM) roadmap.
In recent years, Solana has attracted a large number of users and DeFi market share due to its low costs and fast transactions. However, the transaction-specific chain Hyperliquid has rapidly risen, capturing over 70% of the on-chain contract market. The founder of Hyperliquid even publicly criticized Solana's speed as "not fast enough." This undoubtedly made Solana feel a sense of crisis.
Is Solana not fast enough?
Currently, the final confirmation of transactions on Solana takes 12-13 seconds, while Hyperliquid's average confirmation time is about 0.2 seconds, and SUI's average confirmation time is 0.5 seconds.
It is expected that after the Alpenglow upgrade, Solana's confirmation time will reach 150 milliseconds, regaining its speed advantage and achieving Visa-level transaction confirmation capabilities, but it still lags behind Nasdaq's "microsecond-level" high-frequency trading systems.
What else needs to be done besides being faster?
Empowering dApps on the platform more — the so-called ACE (Application-Controlled Execution) — allowing dApps (smart contracts) to decide their transaction priorities, enabling dApps to be more flexible and powerful when handling complex issues.
Protecting market makers and addressing the MEV (Maximal Extractable Value) issue: Hyperliquid's order matching engine provides higher priority for market maker orders, protecting them from MEV attacks, thus offering better prices to attract retail investors. The Solana ICM roadmap is similar; through the introduction of BAM and the completion of the Alpenglow upgrade, DEXs within the ecosystem will have the capability to address the high-frequency arbitrage problem, improving market health and providing better prices for retail investors.
A More Ambitious Goal
In addition to aligning with Hyperliquid in DeFi, Solana has an even more ambitious goal — a true "on-chain Nasdaq" — helping more companies bypass the complex IPO process for on-chain financing.
Solana co-founder Anatoly Yakovenko recently stated in an interview that he hopes to complete the on-chain transition of traditional financial assets (RWA) within a year and provide compliant, open-source on-chain IPOs for entrepreneurs within five years, ultimately creating an open, low-cost, decentralized internet capital market.
It's a lofty goal, but it seems to be the target of almost all leading public chains. Currently, we see Solana continuously striving for reform in various aspects such as underlying architecture, ultimate performance, and application scenarios. However, this strategy will require time and market validation to break through in this highly competitive era.
02 In a Turbulent Season, How Will the AI Narrative Develop?
Public chains typically do not easily change consensus strategies, just as no one would casually change their nationality or residence. Once a change occurs, it is often driven by significant threats.
In terms of core chain trading business, whether it is Hyperliquid rapidly eroding Solana's advantages in the DEX perpetual contract market as a transaction-specific chain, or the rising star Sui catching up in performance across multiple fields such as DeFi and DeAI, coupled with hot topics like stablecoins, RWA, and micro-strategies pushing ETH back onto the throne, Solana is feeling considerable pressure, forcing it to accelerate upgrades to reverse the situation.
The AI field, which Solana prides itself on, is also not optimistic. After the previous DePIN and AI Agent MEME craze subsided, the Virtuals ecosystem has rapidly risen, allowing Base to dominate the AI Agent field; the BNB Chain has diverted a significant amount of attention from AI MEME through celebrity effects and exchange resources. Meanwhile, in the decentralized AI infrastructure space, the rapid expansion of the Bittensor subnet and the rise of numerous AI Layer 1s are gradually forming a new force in the DeAI field.
For a time, anxiety seems to have spread to all levels of the Solana chain, but the battle-hardened Solana is clearly not going to give up easily. Currently, the Alpenglow upgrade is expected to bring strong confidence to the ecosystem. At the very least, Solana officials have shown sufficient humility and pragmatism, clearly benchmarking against competitors, gradually addressing shortcomings, and even aiming to become stronger.
Next, let's sort through Solana's AI ecosystem together and see if Solana's AI narrative can still help it usher in a new round of prosperity.
03 Solana's AI Landscape
The development time and breadth of AI projects on Solana are impressive. Here, we can roughly divide the AI projects on Solana into three stages based on time intervals.
Stage One: Early DePIN Ecosystem Explosion, DeAI Seed Growth
The popularity of the DePIN concept made Solana one of the first public chains to explore decentralized AI on-chain. These projects leveraged Solana's powerful performance and low costs to build their own decentralized networks for computing power, bandwidth, data, etc., laying the early foundation for the Solana AI ecosystem.
In terms of AI computing power networks, early projects like Render, io.net, and Aethir were among the first to attempt decentralized computing power on-chain, although each had different focuses:
- Render focuses on rendering tasks for 3D animation and the metaverse, recording the allocation and payment of rendering tasks on Solana, and matching GPU providers with demand through smart contracts.
- io.net primarily provides low-cost decentralized GPU computing power for AI and machine learning, automatically allocating computing power through its own network, with Solana used for settling $IO tokens and recording node contributions.
- Aethir mainly optimizes real-time applications like games through edge computing, allocating computing power to edge nodes via its own network, with Solana used for recording transactions and incentivizing with $ATH tokens.
These projects are early explorers in the already saturated decentralized computing power network, and as early entrants, they have raised significant funding and are well-regarded in the market. However, these projects typically require high-performance GPUs to participate in the network, which poses a high barrier for ordinary individuals.
In contrast, projects like Grass, Helium, Roam, and Gradient Network have a better grassroots foundation.
- Grass is a decentralized data collection network where users can automatically contribute bandwidth by simply downloading a browser extension or app, and collect network data through activities like web crawling. Users' contributions are recorded on the Solana chain and rewarded with $GRASS tokens.
- The network built by Roam aims to provide seamless and secure global internet coverage through community-provided WiFi nodes. Users can earn $ROAM tokens by providing WiFi coverage or verifying networks through the app, with the project using Solana for node management and payments.
- Gradient Network is a decentralized edge computing platform that allows users to contribute idle computing resources (such as smartphones, laptops, etc.) to support AI inference, content distribution, and serverless functions by simply installing a plugin. It uses Solana's on-chain mechanisms to handle coordination and payments between devices, ensuring efficient and secure decentralized computing.
- Helium provides IoT and mobile network coverage in a decentralized manner, utilizing Solana to record hotspot data and transactions. Users purchase and deploy Helium Hotspots (hotspot devices priced around $200-500) to provide network coverage and earn $HNT or $MOBILE token rewards. A more accessible way to participate is by using the phone cards launched by Helium and T-Mobile in the U.S., enabling the "network mapping" feature to share anonymous location data to help optimize network coverage, earning Cloud Points or $MOBILE tokens, and trying the phone card for free.
These projects have actively explored the infrastructure field combining blockchain and AI (such as bandwidth, data, computing power, etc.), bringing immense imagination and confidence to the market, and further opening a new chapter for DeAI. Although the token prices of these projects have retreated from their peaks, the network effects are still evident, with many projects establishing partnerships with traditional large companies and gaining recognition in the mainstream market.
Stage Two: AI Agent Flourishing in Multiple Aspects
With the significant enhancement of LLM capabilities represented by ChatGPT, applications like AI Agents have rapidly developed over the past year. Solana, with its outstanding performance and rich ecosystem, has become one of the first public chains to reap the benefits of on-chain AI Agent tokens and related application prosperity.
- Wayfinder, developed by Parallel Studios (backed by Solana Ventures, previously known for the blockchain game Colony on Solana), simplifies cross-chain operations through AI Agents, supporting easy asset transfers across multiple blockchains including Solana, Ethereum, Polygon, and Base.
- ElizaOS is an open-source AI Agent framework that helps developers quickly create, deploy, and manage AI Agents on Solana. These AI Agents can rapidly process information, execute transactions, and interact with smart contracts, governed by DAO AI 16 Z. The DAO token $AI 16 Z reached a market cap of over $2.5 billion, briefly becoming the leading AI token on Solana. However, due to its strong MEME attributes, its value later returned to rational levels.
- Holoworld is a multimodal AI Agent launch platform that allows ordinary people to create, customize, and trade AI Agents, supporting customization of 3D characters and videos, with all digital asset interactions managed through Solana's smart contracts.
- Moby AI initially focused on Alpha research and providing real-time crypto information as an AI Agent, and has now launched its own terminal, concentrating on Alpha mining and trading on the Solana chain.
- Hey Anon is a DeFAI protocol deployed on Solana, aiming to simplify DeFi interactions through natural language processing and real-time data aggregation, helping users manage DeFi operations, obtain project updates, and analyze market trends.
Additionally, many well-known Agent and application projects emerged on the Solana chain during the AI craze at the beginning of the year, such as the Agent framework $ARC, $SWARMS, the DeFAI platform $GRIFFAIN, $BUZZ, the AI Agent launcher $HAT, and notable AI Agents $PIPPIN, $ZEREBRO, among others. However, after the tide receded, the token prices and popularity of these projects quickly declined, with some projects' development being stalled.
Stage Three: The Post-On-Chain AI Era, Stepping Towards On-Chain DeAI More Pragmatically
As the market gradually returns to rationality, we notice a new batch of projects emerging on the Solana chain, which have shed the noise of the AI MEME era and are more pragmatically building decentralized AI infrastructure on Solana.
- Nous Research is dedicated to training open-source AI models that can compete with mainstream large models like OpenAI in a decentralized manner. Its core Psyche network significantly reduces inter-node communication frequency through compression technology, effectively addressing the communication bandwidth bottleneck in decentralized AI training, enabling the network to support high-computation AI training scenarios like LLM pre-training; it also records node contributions and completes incentive distribution through the Solana network. They have launched the Hermes series of open-source models based on fine-tuning the Llama model.
- Arcium initially started as a privacy protocol Elusiv on Solana and later transformed into a broader privacy computing platform. Using MPC and ZKP technologies, it allows computations on encrypted data without exposing the data content, providing privacy protection not only in fields like DeFi and Desci but also offering privacy infrastructure for AI model training, inference, and AI Agent applications that require attention to training data privacy.
- Neutral Trade is a hedge fund platform based on Solana, offering various AI-driven quantitative and automated trading strategies. Currently, in addition to common quantitative neutral strategies and arbitrage strategies, it also features a well-performing CTA Momentum strategy, which is a multi-asset, high-liquidity strategy operated in collaboration with the well-known quantitative firm R* Research, achieving an annualized return of up to 95.11%, with a subscription limit of $10 million already filled.
Although the heat of Solana AI has decreased in this stage, it also reflects a sense of sifting through the sands. The quality of projects has significantly improved — they are more capable of implementation and solving more practical problems — evolving from "dream speakers" to "pragmatic doers."
04 How to View Solana's Current AI Ecosystem?
From the above overview, we can see that Solana's AI ecosystem has developed early and covers a wide range, with comprehensive strength still being very competitive among existing public chains.
While being comprehensive, many excellent projects have also emerged within the Solana ecosystem. For example, Nous Research is dedicated to solving the challenges of decentralized large-scale training of AI models, Grass collects massive training data through a decentralized network, and Arcium focuses on building privacy infrastructure. The competing products of these projects often require proprietary chains to support them, yet they thrive on Solana, fully demonstrating Solana's excellent capacity.
Although the current heat of on-chain AI has been diverted by Base, BNB Chain, and others, the possibility of a single chain dominating the AI field in the long term is almost zero; cooperation between chains is more prevalent than competition. Meanwhile, with the Alpenglow upgrade, Solana's advantages in the AI field will be further strengthened:
1. Fast and Cost-Effective: Speed, throughput, and costs are the most critical factors for on-chain AI projects. Multiple AI Agents need to closely cooperate and transact under protocols like MCP, and decentralized training, data collection, and other tasks rely on high-frequency, rapid interactions between nodes. Currently, Solana is already highly efficient, and after the Alpenglow upgrade, confirmation time has been reduced to 150 milliseconds, further lowering latency and costs, better supporting real-time AI applications.
2. Good Liquidity: AI tokens serve as the currency of projects, and their price stability and smooth circulation significantly impact the projects. Solana's current average daily DEX volume reaches $1.4 billion, ranking second in the entire network, only behind Ethereum, and it boasts mature and active DeFi ecosystems like Raydium and Jito, allowing AI projects to easily access stable liquidity pools. The upgrade is expected to attract more market makers, providing deep liquidity to help AI tokens circulate and finance quickly.
3. Smart Contract Support: Solana supports parallel processing and more flexible development languages, and its virtual machine SVM can handle complex logic more efficiently, suitable for the more complex on-chain execution required for AI tasks (such as Agent decision-making or data validation). After the Alpenglow upgrade, contract functionalities will be more powerful and stable, making it easier for AI developers to build applications like prediction markets or automated training.
4. Decentralization: Although Solana has long been criticized for being "not decentralized enough," this is only in comparison to Ethereum. Its current 2,000+ nodes far exceed many popular performance chains and proprietary chains. The Alpenglow upgrade will lower operational costs, and more nodes are expected to join, further enhancing the level of decentralization and strengthening the AI ecosystem's resistance to censorship and global distribution.
5. Ecological Interaction: As a general-purpose chain, Solana's ecosystem is more complete, diverse, and mature, making it easier for AI projects to collaborate across fields, such as AI Agents using DePIN computing power networks for seamless interaction with on-chain RWA assets. A comprehensive ecosystem can easily empower AI projects.
05 In Conclusion
Being in the crypto space, we are always particularly excited about the birth of narratives and anxious about their demise. Solana, full of memes, is undoubtedly a master of narratives. "On-chain Nasdaq" and AI are undoubtedly its two most important narratives.
The arrival of the Alpenglow upgrade is highly anticipated. At that time, Solana, which once fought Ethereum and the entire Layer 2 ecosystem single-handedly, will become even stronger. But will it be strong enough to carry these two narratives and compete with more general-purpose and proprietary chains? Perhaps only time will tell.
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