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Austin Federa (Solana): "We have everything we need to attract companies".

Austin Federa (Solana): "We have everything we need to attract companies".

Often heralded as the second most developed blockchain after Ethereum, Solana is not lacking in assets to attract a number of businesses and institutional investors. The Solana Foundation's Director of Strategy explains the vision.

The Big Whale: Solana suffered the full force of FTX's bankruptcy, but your ecosystem has become very dynamic again in recent months. How do you explain this turnaround?

Austin Federa: The reason there was so much concern was because FTX was very much linked to Solana in a number of ways. Many people discovered Solana via FTX, and its leader Sam Bankman-Fried helped fund the ecosystem via Alameda Research. But in reality, the implications didn't go any further than that.

We have seen a number of users leave, but these are those who left the crypto because the market was bearish. This is a natural cyclical phenomenon that has been seen in the past, it had nothing to do with Solana as such. For the past few months, we've now been seeing these users returning en masse because the market trend is better.

Solana has seen record trading volumes thanks to the launch of numerous memecoin projects on this blockchain. Could this threaten your credibility with institutional players?

I think there are a lot of misunderstandings about memecoins. In fact, what is a memecoin? In a way, Bitcoin was one in its early days. It's a token that unites a community around a digital asset. Of course, some projects have no value and never will, but that only represents a tiny proportion of the projects that can be created on a blockchain. It would be counterproductive to prohibit them, as it would go against our principles of freedom.

Isn't that a problem in terms of image for institutions from the traditional financial world that would like to launch on Solana?

Don't worry, they know the difference between serious projects and others. But let's look at the problem in reverse: why are memecoins growing exponentially on Solana? Quite simply because it's cheap, and that's what a lot of institutional investors are looking for too. It's worth remembering that Ethereum was subject to the same kind of criticism when the NFT phenomenon or its own memecoins exploded.

Solana is presented as very fast compared to Ethereum, but peaks in usage have also disrupted transaction execution...

Solana is currently capable of processing 1,700 transactions per second for a small fee, which is far better than other blockchains on the market, including Ethereum's layers 2. And we're still a long way from completing infrastructure development. The reality is that there have never been as many active users as there are now on Solana.

What's on your roadmap?

We have the agility to optimise our network even further. We will continue to increase the number of transactions per second, while further improving network security through the upcoming release of Firedancer, a new client for Solana validators. It should arrive by the end of the year. We're also going to reduce the resources needed to run the network infrastructure thanks to Runtime V2, which will be rolled out over the next 12 to 24 months.

You often highlight your "agility" in developing Solana. Is this a criticism of Ethereum, whose changes are slow to implement?

It's a fact that Ethereum updates take time to deploy. Solana is much more agile from this point of view.

Ethereum is nevertheless the most attractive protocol for institutional investors looking to launch tokenised products, led by BlackRock, which has just presented its tokenised BUIDL fund. How did you react to this announcement?

This is excellent news, because the whole sector needs to become more institutionalised to take it to the next level. Launching this type of product on Ethereum makes sense today because it's the most developed network, and that's not disputed by anyone. But we are only at the beginning of the movement to tokenise real-world assets: everything remains to be done.

If BlackRock's teams feel confident enough to launch a tokenised fund on Ethereum today, they will be confident enough tomorrow on other blockchains, such as Solana, which offer other advantages.

Look at Visa and Circle: they first deployed their projects on Ethereum before porting them to Solana, because Solana offers superior processing capabilities.

However, the major trends in innovation are mostly to be found in the Ethereum ecosystem. How do you intend to reverse this dynamic to appeal to institutional players?

It's true that right now, everyone is talking about restaking, and this trend is mainly associated with Ethereum. The promise is seductive on paper, but it still involves many risks and its development is still in its infancy.

As far as Solana is concerned, we are focusing on simple innovations that meet the needs of institutional investors. They will soon be able to personalise their tokens by integrating specific data, such as information about their holders or particular transfer rights. We already have everything we need to attract companies, although we obviously still need to improve.

What are companies interested in at Solana?

Companies are looking for a network that is efficient, simple to use and decentralised enough to guarantee transparency, which is what we offer.

In terms of ease of use, we have distinguished ourselves from the outset by our user experience, which is close to those of Web2 applications. We will also continue to work on account or blockchain abstraction, which will allow you to connect to a blockchain without even realising it. Although there has been a lot of talk about this in recent months, this type of technology will not be fully operational for another 5 to 7 years.

Today, how many employees do the various Solana structures have?

The Solana Foundation, a not-for-profit company, has 35 employees, while Solana Labs, the commercial company behind the protocol, has 70. Anza, the leading developer of Solana-based software, has around 50.

Further reading; Analysis of Solana and its token SOL

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