Although the crypto market isn’t always sunshine and flowers, some prominent industry players, including Solana co-founder Raj Gokal, still have an optimistic outlook for growth — at least about their own projects.
“I think the thesis and promise of Solana as a network is it’s performant, usable and scalable, and it’s just becoming more and more true every day,” Gokal said in an interview with TechCrunch prior to a Solana-focused wallet attack on Tuesday.
Solana, one of the largest layer-1 blockchains known for its speedy transactions, was targeted in a hack last night, which resulted in about 8,000 empty Solana wallets.
TechCrunch requested additional comments from Gokal in the wake of the exploit but only received a statement provided on behalf of Solana:
Engineers from across several ecosystems, in conjunction with audit and security firms, continue to investigate the root cause of an incident that resulted in approximately 8,000 wallets being drained. This does not appear to be a bug with Solana core code, but in software used by several wallets popular among Solana users.
In the past 24 hours, in the wake of the issue, Solana’s cryptocurrency, SOL, dropped 3.9% to $40.30 at the time of publication.
Despite the recent issue — not Solana’s only in memory — the layer-1 blockchain has about 15 million to 20 million monthly active addresses, some of the highest in the crypto industry, Gokal said. “A question we get a lot is how is the market affecting the pace of development and the pace of building?”
His answer? It’s not, really.
“This is something we’re really thrilled about,” Gokal said. “At the foundation, there’s a hackathon that runs every quarter and right now it’s on track to have the highest number of registrations for any hackathon we’ve ever had at almost 14,000.”
Even though the market is shaky and Solana has had its share of problems – from network shutdowns to the latest wallet hacks – there’s still a pool of developers who want to build on Solana in this bear market cycle.
“Everybody in crypto has seen enough cycles where they know that some of the best projects are born in bear markets,” Gokal said. “There’s a community of developers that’s evolving … and I think there are thousands of builders positioning to catch the next wave, and they’re doing it on Solana.”
Ethereum leads the blockchain race with the most developers building on its network, with about 4,000, according to a January report by Electric Capital looking at 2021. The same report found that Solana was the second-fastest growing ecosystem, with around 900 active developers sourced from public open source work, trailing behind Fantom, with a 385% year-on-year increase in monthly developers in December 2021.
The Solana ecosystem is “growing on its own,” Gokal noted. “As a founder alongside some of my team, we’re really focused on new use cases and building great products that make use of the network and make it easier for users to onboard into crypto.”
Solana wallets do about 3,000% more daily transactions compared to Ethereum wallets, according to Nansen data. On August 1, there were about 35.3 million non-vote transactions on Solana, compared to 1.3 million on Ethereum, the data showed. In comparison, Ethereum did 8,679 contract deployments, while Solana only did 163 on the same day.
“Solana is the only network with 400-millisecond blocktimes and usually subsecond confirmation times for every transaction,” Gokal said. “That’s nothing to scoff at. It’s a huge engineering feat to achieve that with such a decentralized network and have no sharding.” (Sharding is when a database is split to spread the load, something that Solana doesn’t do as it puts everything on one chain, in one single state.)
But has that speed come at the cost of security? As the crypto ecosystem continues to grow and exploits become more prevalent, a number of security experts believe a focus on education and security is necessary to protect web3 users and protocols alike.
Solana’s focus on speed over security seems to have backfired a bit. “Why does security have to be No. 1 priority? I value speed more [to be honest],” Kyle Samani, co-founder and managing partner at Multicoin Capital, said in a tweet in July 2021. (Multicoin Capital led the first three investment rounds for Solana.)
In June, Solana announced an Android web3-focused smartphone Saga in an effort to help “crypto to go mobile,” co-founder Anatoly Yakovenko said at the time. Earlier that month, Solana Ventures and Solana Foundation also set up a $100 million investment and grant fund to deploy capital into South Korean web3 startups with a focus on gaming studios, GameFi, NFTs and DeFi in the Asian region, TechCrunch previously reported.
“The core engineering team is always working on better performance,” Gokal said. “We’ve always joked that if we had to do it, at some point, the speed of light around the Earth is the biggest limiting factor and we’d build a neutrino-based communication network to cut through the center of the earth.”
The focus on speed is “never-ending” and the goal is to continue improving performance, Gokal said. But no amount of speed is worth the risk of an empty wallet, meaning that Solana’s pool of developer interest has more than one task on the road ahead.