Welcome to the 1,146 newly Not Boring people who have joined us since last Monday! Join 70,496 smart, curious folks by subscribing here:

🎧 To get this essay straight in your ears: listen on Spotify or Apple Podcasts

Today’s essay, the whole thing, is brought to you by… Solana

Hi friends 👋,

Happy Monday!

We’re breaking some Not Boring rules here today, and I want to explain why.

Thus far, I’ve only done Sponsored Deep Dives on Thursdays, never Monday. As a reminder, you can read how I choose what companies to write Sponsored Deep Dives on here.

A couple of months ago, I started talking to Ben Sparango and Austin Federa on the Solana team about doing a sponsored deep dive. In the smallest of small worlds, Ben and I grew up in the same neighborhood and are family friends, and last year, he joined the Solana team as Strategy Lead. I started looking into Solana earlier this year and have been really impressed. I included sections on Solana in Who Disrupts the Disrupters? and Own the Internet.

We picked a date for this deep dive — last Thursday — and I asked Austin for his dream outcome from the piece. His answer: “We want people to have an accurate understanding of where Solana excels and where it isn't quite as strong.” No pumping, no shilling, just a fair, balanced, and honest assessment of Solana.

Then, a little over a week ago, Solana broke out and entered the mainstream. Its price nearly doubled. It’s attracting interest from mainstream users. If there hadn’t been a deep dive scheduled, I’d probably be writing about Solana anyway (please don’t tell the Solana team!). So I decided to move the deep dive to today, a Monday.

I’m not going to make this a habit, but I felt that Solana is so relevant, has so many interesting things going on, and will play such an important role in crypto’s future, that it was more than worth making an exception this one time.

I’m writing this piece just like I would write any Monday piece. There’s no tracking link and I’m not asking you to buy anything. I just want to let you know about Solana, and the role it’s going to play in expanding crypto’s addressable universe, before everyone else catches up.

Disclaimer: THIS IS NOT INVESTMENT ADVICE! SOL is up a ton over the past few weeks, I have no idea what will happen short- or long-term. This is for educational and entertainment purposes only. Do your own diligence, you degenerates. 

Let’s get to it.

This is the longest Not Boring ever 🤯 Grab a Cometeer and read it in your browser:

Read Solana Summer Online

Solana Summer

I have a confession. Last Saturday night, Puja was out of town. The baby was asleep. And I did something on the internet I’m not proud of. 

At little before 8pm est, I got on my computer, fired up Discord, and hopped in a server with some of the biggest degenerates the world wide web has to offer. We were all there to get in on the latest big NFT mint on the ground floor: Degenerate Ape Academy. 

There’s a new NFT drop every hour these days. Degen Apes are handsome, obviously, and a little more 3D than the Punks or Apes you’re familiar with, but that’s not what made this drop special. What made this drop special was that it was one of the first big NFT drops on Solana.

Solana is a Layer 1 protocol, or blockchain, like Bitcoin, Ethereum, or a number of others. I’ve written about Solana in Not Boring before. In Own the Internet, I wrote that Solana is one of the non-Ethereum blockchains I’m most bullish on. 

Technically, what makes Solana interesting is that its radically different system architecture leads to dramatically higher speeds and lower costs than other blockchains. Whereas Bitcoin can handle about 7 transactions per second (TPS), and Ethereum can handle 30 TPS (until Eth 2.0 dramatically increases it), Solana can currently handle 65,000 TPS.

Whereas it costs ~$3 today to do a transaction on the Bitcoin blockchain, and ~$8-40 on Ethereum, it costs $0.0001 to do a transaction on Solana.

That’s absurd performance. Solana’s goal is “for a decentralized network of nodes to match the performance of a single node.” If that sounds overly technical, the proof is in the experience. I’ve spent a bunch of time playing around with Solana - purchasing SOL on FTX.US, downloading a Phantom wallet, staking and unstaking, buying RAY on Raydium, and staking that, and I have to say… it’s really fast and really cheap. You don’t need to think twice about doing anything because it moves so quickly and costs so little. That’s the point. It feels like using the internet. 

How it does it is Solana’s magic. We’ll get into the nitty gritty, but for now, what you need to know is that Solana uses a Proof of Stake consensus mechanism plus Proof of History, a decentralized source of time that Solana CEO and founder Anatoly Yakovenko told me is “the implementation of the arrow of time in math.” Sounds mind-bending, and it is, but what it means is that transactions on Solana are verifiably ordered without all nodes needing to agree simultaneously. That’s what makes it so fast. 

It also means that Solana can be single-shard. While Eth2 is expected to reach 100k TPS, it, and other new blockchains, will do so by sharding, creating sidechains that tie back into the main Ethereum blockchain. Solana does everything on one single chain, in a single state. 

Solana might have the best tech of any blockchain on the market, but the best tech is wasted without a strong community of developers and users. The Solana community is strong and passionate. You can spot them by the Pit Viper shades in their pfps and ◎’s where o’s should be. But it needed something to take it crypto mainstream.

Which brings us back to those Degenerate Apes. 

Last Saturday, I waited over two hours with a bunch of furious wannabe-Ape-owners as the Degenerate Apes team figured out how to handle all of the demand. One of the tools they used couldn’t handle the load. At 9:52pm, it finally went live. 

When the mint finally launched, I was locked out, stuck looking at this screen no matter how many ways I tried to get around it. 

All 10,000 Apes sold out in eight minutes. I didn’t get one. As I sat there, mad at myself for wasting the night locked out of an auction for cartoons of Degenerate Apes eating pizza and stuff, I started to type out a section for this piece about why I thought it didn’t make sense for an NFT project to launch on Solana. Ethereum could own culture, Solana could own high-frequency trading. 

But, as we all know by now, I’m an idiot. 

Pretty much immediately as the launch wrapped up, as I typed those words, the price of Solana’s native token, SOL, started to RIP. At 10pm EST, it was at $45.24. It hit $79 this weekend, and currently sits at $73.50, good for a market cap of $21.2 billion and a fully diluted market cap of $37.1 billion.

There are direct reasons that the Apes drove up the price. People needed to buy SOL to buy Apes, and at ◎ 6 per Ape, the launch locked up 60,000 SOL. Once people bought SOL and experienced the speed and low transaction costs for themselves, they got more bullish. 

But the larger reason is that crypto is driven by narratives. It’s a global game of intersubjective chicken. To bootstrap a new blockchain or app, you need to convince people that other people will also use that blockchain or app. The best blockchain technology in the world is useless without people building on top of it. The fact that all these people saw all of these other people doing stuff on Solana was a point in the chain’s favor. 

And it’s all about people. For all of the talk about technology and decentralization and trustlessness, the success of any crypto project relies, to a surprisingly high degree, on people. 

• The right people in a project’s corner lend it crucial credibility. 

• The name of the game is to convince as many people as possible to build on your protocol. 

• Then, it’s about those developers attracting and properly incentivizing users.

Fortunately for Solana, it’s stacked with the right people, like Anatoly, SBF, and a16z.

Crypto is a game of self-fulfilling belief. And the involvement of the right names helps create belief. If the technology can back it up, there might be something special afoot.

Now, to be clear, this isn’t a post about why Solana is the best blockchain, the ETH-killer, the one chain to rule them all. I love Ethereum, ETH my biggest crypto holding, and most of the time that I (and others) spend interacting with crypto via NFTs, DeFi, and DAOs, is spent on Ethereum. Ethereum is where the most smart people in crypto spend most of their time, and ETH is the currency of the Great Online Game.

But I’m also a Maximalist Minimalist. When I wrote Own the Internet to lay out the bull case for Ethereum, I said the same: 

There are a lot of Something Maxis, people who believe their thing is the one and only solution, but I subscribe to the idea that each successful L1 or L2 will focus on what it does best and interoperate with others who do something else best. I’m a Maximalist Minimalist. 

Tribalism is strong in crypto, and it makes sense. If any magical internet money turned me into a multi-millionaire or billionaire in a decade, I’d defend that thing to the death, and recruit others to the cause so that my magical internet money is worth even more.

Tribalism is fun, it’s like sports, but that’s not what makes all of this so fascinating to study. The good stuff comes from figuring out how it all fits together -- how certain chains complement each other while others compete, why people build on one chain versus another, where people decide to spend their precious time and internet money. Today, people are spending more of their time and internet money in the Solana ecosystem. 

It’s platform wars, with interoperable platforms, playing out in real-time, and it’s still so early. There will be multiple massive winners, and I think that Solana will be one of the biggest. 

When I originally planned this piece, it was to make you aware of a lesser-known blockchain that was on the cusp of breaking out. But in crypto, you blink, and everything’s changed. Solana is now a real contender, and it deserves its own very deep dive to explain why and what’s next. So today, we’ll cover: 

• The Core Questions 

• Solana’s Story

• How Solana Works

• Solana’s Orbit

• The Ecosystem 

• Case Studies: Star Atlas, Saber, Audius

• How Value Accrues to Solana

• Bull Case for Solana 

• Bear Case for Solana

• Solana Summer

Ultimately, Solana’s success or failure comes down to two questions… 

The Core Questions

Blockchains and crypto are relatively new. They can seem foreign and a little scary. Part of what I’ve been trying to do in Not Boring this year is to show that ultimately, crypto projects are subject to the same dynamics that any business is. 

So as we explore all of this complex technology and learn new things, let’s simplify it by keeping two questions in mind:  

1. Can Solana convince developers to build on Solana? 

2. Can those developers attract users to their product? 

I wrote those two questions before Solana dropped this rebrand on Friday evening:

Powerful for developers. Fast for everyone. Attract developers who attract users. That’s it. 

Short-term, there’s speculation and noise and blockchain tribalism. There are arguments over the trade-offs between decentralization, scalability, and speed. But in the long-term, it all comes down to attracting developers who attract customers. Anatoly has repeatedly said that with the tech up and running, the next phase is “onboarding the next billion users.” 

While Coinbase has 56 million users, Anatoly uses people who “control their own keys,” by using something like a Metamask or Phantom wallet, as a proxy for real crypto adoption. Without controlling your keys, you can’t really participate in crypto. By that count, there are only a few million users. 

It’s so early, for crypto and for Solana itself. Even the idea for Solana is only four years old. 

Solana Story

“I was manic for a week.” 

On a recent Special Episode of Acquired (which you need to listen to if you want to go deeper here), Anatoly told Ben and David about the moment he realized that it might be possible to construct an arrow of time. 

Anatoly is a hardcore engineer by background, having spent 13 years at Qualcomm where he was most recently a Senior Staff Engineer Manager. 

At Qualcomm, Anatoly worked on wireless technology close to the metal, like working on Code-Division Multiple Access (CDMA) chipsets, which allow several transmitters to send information simultaneously over a single communications channel. 

He left Qualcomm in 2016 to work at Mesosphere, which built optimized IT infrastructure for enterprises, and joined Dropbox in 2017 to again work on making distributed systems faster and more efficient. 

So when crypto started taking off in 2017, minting millionaires and creating network congestion, Anatoly was perfectly prepared. In October, he had the realization that made him manic: blockchains have the same issues as communications networks, and they might have the same solutions. As he explained on Acquired:

I had two coffees and a beer, and I was up until 4:00 AM. I had this eureka moment that puzzle similar to proof of work using the same SHA-256 preimage-resistant hash function, instead of running it in this massively parallel, use as much electricity as you can to find this answer as quickly as you can, you actually make that thing slow, recursive, and force it to be running in a single core on a single thread on the computer, you can force it to prove that it's taking a certain amount of time, that there's a force delay before you do an action. I knew that I had this arrow of time.

That arrow of time was both theoretically fascinating and practically important. It represented a way to keep time between computers that don’t trust each other. Solana’s website explains: “a reliable clock makes network synchronization very simple. When synchronization is simple the resulting network can be blazing fast, bound only by network bandwidth.” 

Just five months into his time at Dropbox, Anatoly quit to build his blockchain. By November 2017, he’d written and published the Solana Whitepaper, “Solana: A new architecture for a high-performance blockchain.” Then he set out to raise money. 

To learn about the returns Solana’s early backers received, how Solana works, SBF, a16z, and the people behind Solana, the growing ecosystem, the bull case, the bear case, and the future of Solana…

Continue Reading Online

How did you like this week’s Not Boring? Your feedback helps me make this great.

Loved | Great | Good | Meh | Bad

Thanks for reading and see you on Monday!

Packy