Original Source: Biteye

“Solana’s greatest advantage lies in its versatility, enabling it to simultaneously support multiple different types of applications and platforms.” — Lily Liu, Chairperson of the Solana Foundation

Many relationships in the world are like a seesaw. While ETH's price is recovering on its tenth anniversary, SOL is facing a period of anxiety. Not only has the path of becoming an "Ethereum killer" become more difficult, but it has also encountered its own wave of "killers." It's a bit like the wheel of fortune.

However, a moderate level of anxiety isn't necessarily a bad thing for both individuals and projects. For a seasoned project like Solana, coping with this situation is even easier. In this article, we'll take you through some of Solana's recent major announcements and delve into the current state of Solana AI and future prospects.

01 Official actions are frequent

1. Alpenglow upgrade: replace SoH, faster and compete with competitors such as SUI

Alpenglow is known as the most significant upgrade to the Solana core protocol to date, and its significance is comparable to Ethereum's transition from PoW to PoS consensus, because 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 mechanism?

In the past, PoH, unlike other blockchains, significantly simplified block synchronization due to its lack of timestamp synchronization and Tower BFT's "one person packages, others vote" approach. This significantly simplified block synchronization, enabling Solana to lead all public chains in its early days with high performance. However, under high load, this PoH architecture incurs significant computational overhead, which, combined with Tower BFT's single-leader overload, contributes to Solana's often-cited downtime.

In addition, Solana is often criticized for its high node operating costs, which leads to a lack of decentralization.

How has Alpenglow improved?

Simply put, Alpenglow removes PoH, a potential computing power killer, and uses Votor (equity-weighted voting) combined with node clocks to process time order and confirmation, reducing the computational burden of the leader node. It also addresses the drawbacks of a single leader and paves the way for subsequent design, which will enable multiple leaders to propose blocks simultaneously.

Another core component, Rotor, optimizes block propagation and synchronization, reducing block confirmation time from 12.8 seconds to 150 milliseconds. Furthermore, by reducing inter-node communication overhead and computational burden, Rotor enables even weak nodes to participate efficiently, achieving "performance upgrades without hardware upgrades."

According to Cogent Crypto’s validator earnings calculator, after Alpenglow is implemented, the minimum stake required for validators to be profitable will drop from 4,850 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 also a key step for Solana to become competitive at the level of Internet infrastructure."

Simply put: faster, more stable, cheaper, more scalable, more decentralized, regaining the throne of the king of performance and getting rid of the nightmare of downtime.

2. ICM Roadmap: Re-optimizing Trading and Continuously Moving Towards an On-Chain Nasdaq

After announcing the Alpenglow upgrade, Solana Labs teamed up with several core development teams within the ecosystem, including Anza and Jito, to release a more specific "Internet Capital Markets" (ICM) roadmap.

Over the past few years, Solana has attracted a significant user base and market share in the DeFi market thanks to its low costs and fast transactions. However, Hyperliquid, a specialized trading chain, has rapidly risen to dominate the on-chain contract market, capturing over 70%. Hyperliquid's founder has even publicly criticized Solana, claiming it's "not fast enough." This has undoubtedly created a sense of crisis for Solana.

Isn’t Solana fast enough?

Currently, it takes 12-13 seconds for transactions on Solana to be finally confirmed, the average confirmation time on Hyperliquid is about 0.2 seconds, and the average confirmation time on SUI 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 there is still a gap compared to Nasdaq's "microsecond-level" high-frequency trading system.

Besides going faster, what else can be done?

Giving dApps on the platform more power - the so-called ACE (Application-Controlled Execution) - allows dApps (smart contracts) to decide the priority of transactions themselves, making dApps more flexible and powerful in handling complex problems.

Protecting market makers and combating MEV (high-frequency arbitrage attacks like clamp bots): Hyperliquid's order matching engine prioritizes market maker orders, protecting them from MEV attacks and thereby offering better prices to attract retail investors. Solana's ICM roadmap is similar. With the introduction of BAM and the completion of the Alpenglow upgrade, DEXs within the ecosystem will be able to combat the malignancy of high-frequency arbitrage, improve market health, and deliver better prices for retail investors.

A more ambitious goal

In addition to aligning with Hyperliquid in DeFi, Solana has a more ambitious goal - a true "Nasdaq on the chain" - to help more companies bypass the complex IPO process and conduct on-chain financing.

In a recent interview, Solana co-founder Anatoly Yakovenko expressed his hope to complete the on-chain integration of traditional financial assets (RWA) within a year, provide entrepreneurs with compliant, open-source on-chain IPOs within five years, and ultimately create an open, low-cost, decentralized Internet capital market.

This is ambitious enough, and it seems to be the goal of almost all leading public chains. Currently, we see Solana continuously striving to reform its underlying architecture, ultimate performance, and application scenarios. However, if this strategy is to succeed in today's highly competitive era, it will take time and market testing.

02 In these turbulent times, how will AI narrative develop?

Public chains generally don’t change their consensus strategies easily, just like no one would casually change their nationality or household registration. If they do, it’s usually driven by a significant threat.

In terms of core on-chain trading business, whether it is Hyperliquid, as a dedicated trading chain, rapidly eroding Solana's advantages in the DEX perpetual contract market, or the up-and-coming Sui, as a general-purpose chain, comprehensively catching up in performance in multiple fields such as DeFi and DeAI, coupled with hot spots such as stablecoins, RWA and micro-strategies that have pushed ETH to the throne again, Solana has felt considerable pressure, forcing it to accelerate upgrades in order to reverse the situation.

Even Solana's pride and joy in AI isn't encouraging. After the initial hype surrounding DePIN and the AI Agent MEME craze faded, the Virtuals ecosystem rapidly gained momentum, giving Base a commanding advantage in the AI Agent space. BNB Chain, leveraging its celebrity status and exchange resources, has diverted significant attention from AI MEME. Regarding decentralized AI infrastructure, the rapid expansion of the Bittensor subnet and the rise of numerous AI Layer 1 platforms are gradually establishing a new force in the DeAI space.

For a time, anxiety seemed to permeate every aspect of the Solana chain. However, having weathered numerous storms, Solana clearly won't give up easily. Currently, the Alpenglow upgrade appears to be bringing strong confidence to the ecosystem. At the very least, Solana officials have demonstrated sufficient humility and pragmatism, clearly benchmarking against competitors and gradually addressing their shortcomings, ultimately striving to become even stronger.

Next, let’s take a look at Solana’s AI ecosystem and see if Solana’s AI narrative can still help it usher in a new round of prosperity.

Solana’s AI Landscape

The long history and breadth of AI projects on Solana make it hard not to be astonished. Here, we'll categorize Solana's AI projects into three phases, roughly based on their timeframes.

Phase 1: Early DePIN ecosystem explosion and DeAI budding growth

The popularity of the DePIN concept has made Solana one of the earliest public chains to explore decentralized AI on the chain. Relying on the powerful performance and low prices of the Solana blockchain, these projects have built their own decentralized computing power, bandwidth, data and other networks, and also laid an early foundation for the Solana AI ecosystem.

In terms of AI computing power networks, early projects such as Render, io.net, and Aethir were the first to experiment with decentralized computing power on-chain, but each focused on different aspects:

• Render focuses on 3D animation and metaverse rendering tasks, records the allocation and payment of rendering tasks on Solana, and matches GPU providers and demanders through smart contracts.
• io.net mainly provides low-cost decentralized GPU computing power for AI and machine learning, automatically allocating computing power through its own network, and Solana is used to settle $IO tokens and record node contributions.
• Aethir mainly optimizes real-time applications such as games through edge computing. Its own network distributes computing power to edge nodes, and Solana is used to record transactions and $ATH token incentives.

These projects are among the early adopters of decentralized computing networks, a field already teeming with competition. As early entrants, they have secured significant funding and are highly regarded by the market. However, these projects typically require high-performance GPUs to participate in the network, making it prohibitively expensive for the average user.

In comparison, Grass, Helium, Roam, and Gradient Network have a better mass base.

• Grass is a decentralized data collection network. Users can automatically contribute bandwidth and collect network data through activities such as crawling by simply downloading a browser plug-in or application. Users' contributions are recorded on the Solana chain and rewarded with $GRASS.
• The Roam network aims to provide seamless, secure global internet coverage through community-provided WiFi nodes. Users can earn $ROAM tokens by providing WiFi coverage or verifying the network in the app. The project uses Solana for node management and payments.
• Gradient Network is a decentralized edge computing platform. Users can simply install a plug-in to contribute idle computing resources (such as mobile phones, laptops, etc.) to support scenarios such as AI reasoning, content distribution, and serverless functions. It also handles coordination and payments between devices through Solana's on-chain mechanism, ensuring efficient and secure decentralized computing.
• Helium provides IoT and mobile network coverage through a decentralized approach, leveraging Solana to record hotspot data and transactions. Users purchase and deploy Helium Hotspots (priced approximately $200-500) to provide network coverage and are rewarded with $HNT or $MOBILE tokens. A more accessible way to participate is to use Helium and T-Mobile's US SIM cards, enable "Network Mapping," and share anonymous location data to optimize network coverage. This earns users Cloud Points or $MOBILE tokens and allows them to try the SIM card for free.

These projects are actively exploring the infrastructure (such as bandwidth, data, and computing power) that integrates blockchain and AI. This has not only generated tremendous market interest and confidence, but has also opened a new chapter in DeAI. Although token prices for these projects have fallen from their peaks, network effects remain evident. Many projects have already established partnerships with large traditional companies and gained mainstream market recognition.

Phase 2: AI Agents Develop in Many Areas

With the significant improvement in LLM capabilities, represented by Chatgpt, applications like AI Agent have seen rapid growth over the past year. Solana, with its superior performance and rich ecosystem, has become one of the first public chains to benefit from the boom in on-chain AI Agent tokens and related applications.

• Wayfinder was developed by Parallel Studios (invested by Solana Ventures, whose previous major work was the blockchain game Colony on Solana). It uses AI Agent to simplify cross-chain operations and supports easy cross-chain asset transfer between 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, interact with smart contracts, and be governed by the DAO AI 16 Z. The DAO token, $AI 16 Z, reached a market capitalization exceeding $2.5 billion, briefly becoming the leading AI token on Solana. However, MEME's overly strong attributes subsequently led to its value returning to a more rational level.
• Holoworld is a multimodal AI agent launch platform that allows ordinary people to create, customize and trade AI agents. It supports customization of 3D characters and videos, and all digital asset interactions are managed through Solana's smart contracts.
• Moby AI was originally an AI agent focused on Alpha research and providing real-time crypto information. It has now launched its own terminal, focusing on Alpha mining and trading on the Solana chain.
• Hey Anon is a DeFAI protocol deployed on Solana that hopes 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.

In addition, during the AI craze at the beginning of the year, many well-known agents and application projects emerged on the Solana chain, such as the agent frameworks $ARC and $SWARMS, the DeFAI platforms $GRIFFAIN and $BUZZ, the AI agent launcher $HAT, and the well-known AI agents $PIPPIN and $ZEREBRO. However, after the tide receded, the price and popularity of these projects quickly declined, and the development of some projects has been stranded.

Phase 3: Post-chain AI era, a more solid move towards on-chain DeAI

As the market gradually returns to rationality, we have noticed that a number of new projects have emerged on the Solana chain. They have washed away the noise of the AI MEME era and are building decentralized AI infrastructure on Solana in a more practical and feasible way.

• Nous Research is committed to training open-source AI models through a decentralized approach that can compete with mainstream models like OpenAI. Its core Psyche network uses compression technology to significantly reduce inter-node communication frequency, effectively addressing the bandwidth bottleneck of decentralized AI training and enabling the network to handle computationally demanding AI training scenarios like LLM pre-training. It also uses the Solana network to record node contributions and distribute incentives. It has currently released the Hermes series of open-source models, fine-tuned from the Llama model.
• Arcium began as Elusiv, a privacy protocol on Solana, and has since evolved into a broader privacy computing platform. Using MPC and ZKP technologies, Arcium allows computations on encrypted data without exposing the data's content. This not only safeguards user privacy in DeFi and Desci, but also provides a privacy infrastructure for AI model training and inference, as well as AI agent applications, where data privacy is crucial.
• Neutral Trade is a Solana-based hedge fund platform that offers a variety of AI-driven quantitative and automated trading strategies. In addition to the more common quantitative neutral and arbitrage strategies, there is also a well-performing CTA Momentum strategy. This is a multi-asset, high-liquidity strategy officially operated in cooperation with the well-known quantitative firm R* Research. It has an annualized return of up to 95.11%, and the subscription quota of US$10 million has been fully subscribed.

While Solana AI's popularity has declined somewhat during this period, it also demonstrates a sifting-through process. Project quality has significantly improved, with stronger implementation capabilities and more practical problem-solving capabilities. The project has evolved from a "dream talker" to a "doer."

04 What do you think of Solana’s current AI ecosystem?

Through the above rough inventory, we can see that the AI ecosystem on Solana developed early, has a very comprehensive coverage, and its comprehensive strength is still very competitive among existing public chains.

While Solana is comprehensive, many outstanding projects have emerged within the ecosystem. For example, Nous Research is dedicated to solving the challenge of decentralized, large-scale training of AI models, Grass is using a decentralized network to collect massive amounts of training data, and Arcium is focused on building privacy infrastructure. While these competing projects often require proprietary blockchains, their success on Solana is a testament to Solana's exceptional capacity.

Although the current popularity of on-chain AI has been diverted by platforms like Base and BNB Chain, in the long run, the possibility of a single chain dominating the AI field is almost zero, and there will be more cooperation than competition between chains. Furthermore, with the upgrade of Alpenglow, Solana's advantages in the AI field will be further strengthened:

1. Speed and Cost: Speed, throughput, and cost are paramount for on-chain AI projects. Multiple AI agents, managed by protocols like MCP, require close coordination and transactions. Decentralized training and data collection also rely on high-frequency, rapid, and massive interoperability between nodes. Solana is already highly efficient, and the Alpenglow upgrade reduces confirmation times to 150 milliseconds, further reducing latency and costs, enabling better support for real-time AI applications.

2. Good Liquidity: As the project's currency, AI tokens are crucial for stable prices and smooth circulation. Solana currently boasts an average daily DEX volume of $1.4 billion, ranking second only to Ethereum. Solana also boasts a mature and active DeFi ecosystem, including Raydium and Jito, providing AI projects with easy access to a stable funding pool. The upgrade is expected to attract more market makers, providing deep liquidity and facilitating the rapid circulation and financing of AI tokens.

3. Smart Contract Support: Solana supports parallel processing and a more flexible development language. Its virtual machine (SVM) can more efficiently handle complex logic, making it suitable for the more complex on-chain execution required by AI tasks (such as agent decision-making or data verification). After the Alpenglow upgrade, contract functionality will be more powerful and stable, making it easier for AI developers to build applications such as prediction markets and automated training.

4. Decentralization: While Solana has long been criticized for its lack of decentralization, this is simply due to its use of Ethereum as a benchmark. Its current network of over 2,000 nodes far exceeds many popular performance and proprietary chains. The Alpenglow upgrade will reduce operating costs, and we expect more nodes to join, further enhancing decentralization and strengthening the censorship resistance and global distribution of the AI ecosystem.

5. Ecosystem Interaction: As a general-purpose chain, Solana's ecosystem is more complete, diverse, and mature, making it easier for AI projects to collaborate across domains. For example, AI Agents use the DePIN computing network to seamlessly interact with on-chain RWA assets. This comprehensive ecosystem easily empowers AI projects.

05 Conclusion

In the cryptocurrency world, we're always incredibly excited about the birth of narratives, yet anxious about their demise. Solana, brimming with memes, is a master of narrative. "On-chain Nasdaq" and AI are undoubtedly its two most important narratives.

The arrival of the Alpenglow upgrade is full of anticipation. Solana, once a single-handed competitor to Ethereum and the entire Layer 2 ecosystem, will become even more powerful. But will it be strong enough to carry these two narratives and compete with more general-purpose and proprietary chains? Only time will tell.

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