Original Title: "Solana Aims to Build an 'On-Chain Nasdaq', AI Narrative Where to Go?"

Original Source: Biteye

“Solana’s greatest strength lies in its versatility, being able to simultaneously support multiple different types of applications and use cases.”

— Lily Liu, Solana Foundation Chair  

Many relationships in the world are like a seesaw. On one side, ETH celebrates its tenth anniversary with a price recovery, while on the other side, SOL's days seem a bit anxious—Not to mention the increasingly challenging road to being the "Ethereum killer," it has also welcomed its own set of "killers"—somewhat reminiscent of the ups and downs of fortune.

However, moderate anxiety is not a bad thing for both individuals and projects. And for the weathered Solana, dealing with it is even more like second nature. In this article, we intend to take you through some recent major moves by the Solana team and, focusing on the AI sector, delve into the current landscape and future outlook of Solana AI.

01 Series of Major Official Actions

1. Alpenglow Upgrade: Replacing SoH, Racing against Faster Speeds and Competitors like SUI

Alpenglow is touted as the most significant upgrade to the Solana core protocol to date, a milestone akin to Ethereum's shift 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 Current Consensus Mechanism?

In the past, PoH, due to not requiring timestamp synchronization like other blockchains, coupled with Tower BFT’s "one person proposes, the rest vote" approach, significantly simplified block synchronization time, allowing Solana to initially lead among all public chains in high performance. However, this structure, under heavy loads, caused significant computational overhead for PoH, compounded by Tower BFT's single leader overload issue, resulting in Solana's frequent criticism for downtime.

Additionally, one common complaint about Solana has been the high cost of node operation, leading to inadequate decentralization.

How does Alpenglow Improve the Situation?

In simple terms, Alpenglow has removed the potential compute killer PoH and instead used Votor (Proof of History) combined with node clock for processing order and confirmation time, reducing the computation burden on leader nodes. Furthermore, to address the single leader drawback, it is designed to pave the way for future implementation of multiple leaders proposing blocks simultaneously.

Another core component, Rotor, is used to optimize block propagation and synchronization, reducing block confirmation time from 12.8s to 150ms. Additionally, by reducing inter-node communication overhead and computational burden, Rotor enables even weak nodes to participate efficiently, achieving a "performance upgrade without hardware upgrade."

According to Cogent Crypto's validator reward calculator, after the implementation of Alpenglow, the minimum staking requirement for validator profitability will decrease from 4850 SOL (about $800,000) to 450 SOL (about $75,000).

Final Vision

The Alpenglow whitepaper states: "Alpenglow will be a turning point for Solana, not just a new consensus protocol, but a key step for Solana to achieve Internet infrastructure-level competitiveness."

In essence, it aims to be faster, more stable, cheaper, more scalable, more decentralized, reclaiming the throne as the performance king and breaking free from the nightmare of downtime.

2. ICM Roadmap: Reoptimized Transactions, Continuing Towards the "On-chain Nasdaq"

Following the announcement of the Alpenglow upgrade, Solana Labs, along with several core development teams within the ecosystem such as Anza and Jito, released a more detailed Internet Capital Markets (ICM) roadmap.

Over the past few years, Solana has attracted a significant user base and DeFi market share with its low costs and fast transactions. However, the transaction-specific chain Hyperliquid quickly emerged, capturing over 70% of the on-chain contract market. The founder of Hyperliquid even openly criticized Solana's speed as "not fast enough," which undoubtedly posed a crisis for Solana.

Is Solana Not Fast Enough Yet?

Currently, final transaction confirmation 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 speed superiority and achieving Visa-level transaction confirmation capability. However, compared to Nasdaq's "microsecond-level" high-frequency trading system, there is still a gap.

Apart from being faster, what else needs to be done?

Empower dApps on the platform even further—known as ACE (Application-Controlled Execution)—allowing dApps (smart contracts) to decide their transaction priority, enabling dApps to be more flexible and powerful in handling complex issues.

Protect liquidity providers, address MEV (Miner Extractable Value) issues such as sandwich bots and high-frequency arbitrage attacks: Hyperliquid's order matching engine gives higher priority to liquidity provider orders, safeguarding them from MEV attacks, enabling them to quote better prices, and attracting retail traders. Solana ICM's roadmap is similar, introducing BAM and completing the Alpenglow upgrade to empower DEXs in the ecosystem to combat high-frequency arbitrage practices, enhancing market health and providing better prices for retail traders.

Ambitious Goals

Beyond aligning with Hyperliquid in DeFi, Solana has an even more ambitious goal—a true "on-chain Nasdaq"—to help more enterprises bypass the complex IPO process and raise funds on-chain.

Solana's co-founder Anatoly Yakovenko recently mentioned in an interview that he hopes to tokenize real-world assets (RWA) within a year, provide compliant, open-source on-chain IPOs for entrepreneurs within five years, and ultimately establish an open, low-cost, decentralized internet capital market.

Although ambitious, this seems to be a goal shared by nearly all leading public blockchains. Currently, we see Solana continuously striving for reform in various aspects such as foundational architecture, ultimate performance, and application scenarios. However, breaking through in this highly competitive era with this strategy will still require time and market validation.

02 The Eventful Autumn: How Will AI Narrative Evolve?

Public blockchains typically do not easily change their consensus strategies, just as no one casually changes nationalities. Any changes usually stem from significant threats.

Regarding core on-chain transaction business, whether it is Hyperliquid as a transaction-specific chain rapidly eroding Solana's edge in the DEX perpetual contract market or the newcomer Sui as a general-purpose chain catching up comprehensively in DeFi, DeAI, and other fields, along with stablecoins, RWA, micro-strategy, and other hot topics once again propelling ETH to the throne, Solana is under significant pressure, forcing it to accelerate upgrades in an attempt to reverse the situation.

The outlook for AI in Solana is not optimistic. After the hype of former projects like DePIN and AI Agent MEME faded, the Virtuals ecosystem quickly rose to prominence, allowing Base to establish an absolute advantage in the AI Agent field; BNB Chain, leveraging celebrity endorsements and exchange resources, diverted a significant amount of attention from AI MEME. Regarding decentralized AI infrastructure, the rapid expansion of the Bittensor subnet and the emergence of numerous AI Layer 1 solutions are gradually forming new forces in the DeAI field.

At one point, anxiety seemed to have spread to various levels on the Solana blockchain, but the battle-hardened Solana is clearly not ready to give up easily. Currently, the Alpenglow upgrade is expected to bring strong confidence to the ecosystem. At the very least, the Solana team has demonstrated enough humility and pragmatism, clearly benchmarking competitors, gradually filling gaps, and aiming to become even stronger.

Next, let's explore Solana's AI ecosystem together and see if Solana's AI narrative can still help usher in a new era of prosperity.

03 Solana's AI Landscape

The longevity and breadth of AI projects on Solana are truly remarkable, spanning various timelines, making it hard not to be amazed. Here, we can roughly divide Solana's AI projects into three stages based on their development timeline.

Stage One: Early DePIN Ecosystem Boom, DeAI Sprouts

The popularity of the DePIN concept made Solana one of the first public blockchains to explore on-chain decentralized AI. These projects leveraged Solana's robust performance and low costs to build their decentralized networks for computing power, bandwidth, data, etc., laying an early foundation for the Solana AI ecosystem.

In terms of AI computing power networks, early projects like Render, io.net, Aethir were among the first to experiment with on-chain decentralized computing power. However, their focuses varied:

· Render focused on rendering tasks for 3D animation, metaverse, recording task allocation and payments on Solana, and using smart contracts to match GPU providers with demand.

· io.net mainly provided low-cost decentralized GPU computing power for AI and machine learning, automatically allocating power through its own network, using Solana for settling $IO tokens and recording node contributions.

· Aethir primarily optimizes real-time applications such as games through edge computing. Its proprietary network allocates computing power to edge nodes, while Solana is used to record transactions and incentivize with the $ATH token.

These projects were early explorers in the decentralized computing power network, which has already become a highly competitive space. As early entrants, they received significant funding and garnered market optimism. However, these projects often require high-performance GPUs to participate, making the barrier to entry too high for the average person.

In contrast, Grass, Helium, Roam, and Gradient Network have a better grassroots following.

· Grass is a decentralized data collection network where users can contribute bandwidth by simply downloading a browser plugin or app and engaging in activities like web crawling to collect network data. User contributions are recorded on the Solana blockchain, and they receive $GRASS rewards.

· Roam's network aims to provide seamless and secure global internet coverage through community-provided WiFi nodes. Users can earn $ROAM tokens by providing WiFi coverage or validating the network through the app. The project leverages Solana for node management and payments.

· Gradient Network is a decentralized edge computing platform where users can contribute idle computing resources (such as smartphones, laptops, etc.) to support AI inference, content delivery, serverless functions, and other scenarios by simply installing a plugin. Transactions are handled through Solana's on-chain mechanism to ensure 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 can earn $HNT or $MOBILE tokens by purchasing and deploying Helium Hotspots (devices priced around $200-500) to provide network coverage. A more user-friendly way to participate is by using Helium and T-Mobile's phone cards launched in the U.S., enabling "network mapping" to share anonymous location data to help optimize network coverage. This can earn Cloud Points or $MOBILE tokens, along with a free trial of the phone card.

These projects have actively explored the intersection of blockchain and AI in infrastructure fields such as bandwidth, data, and computing power, bringing immense innovation and confidence to the market. They have also paved the way for a new chapter in DeAI. Despite some retracement from their token price peaks, the network effects are evident, with many projects having established partnerships with traditional major companies, earning recognition in the mainstream market.

Phase 2: Blossoming of AI Agents

With the significant improvement in AI capabilities, represented by models like ChatGPT, AI Agent applications have rapidly developed in the past year. Leveraging its outstanding performance and rich ecosystem, Solana has become one of the earliest blockchains to benefit from the flourishing of on-chain AI Agents and related applications.

· Wayfinder, developed by Parallel Studios (invested by Solana Ventures, known for the Solana-based game Colony), simplifies cross-chain operations using AI Agents, enabling assets to seamlessly move across Solana, Ethereum, Polygon, and Base blockchains.

· ElizaOS is an open-source AI Agent framework that helps developers quickly create, deploy, and manage AI Agents on Solana. These AI Agents can swiftly process information, execute transactions, interact with smart contracts, and be governed by the DAO AI16Z. The DAO token $AI16Z reached a peak market cap exceeding $25 billion, briefly becoming the flagship AI token on Solana. However, due to its strong meme characteristics, its value later returned to a more rational level.

· Holoworld is a multi-modal AI Agent launchpad that allows ordinary individuals to create, customize, and trade AI Agents. It supports customization of 3D characters and video, with all digital asset interactions managed through Solana's smart contracts.

· Moby AI initially focused on Alpha research and providing real-time encrypted information as an AI Agent. It has now launched its own terminal, focusing on Alpha mining and trading on Solana.

· Hey Anon is a DeFAI protocol deployed on Solana, aiming to simplify DeFi interactions through natural language processing and real-time data aggregation. It helps users manage DeFi operations, receive project updates, and analyze market trends.

In addition, during the early-year AI craze on Solana, many well-known Agent and application projects emerged on-chain, such as the Agent frameworks $ARC and $SWARMS, the DeFAI platforms $GRIFFAIN and $BUZZ, the AI Agent launcher $HAT, and renowned AI Agents $PIPPIN and $ZEREBRO, among others. However, after the hype receded, the token prices and popularity of these projects quickly declined, with some projects' development remaining stagnant.

Phase 3: The Post-On-Chain AI Era, Towards a More Grounded On-Chain DeAI

As the market gradually returns to rationality, we have noticed that a new wave of projects has emerged on the Solana blockchain. They have cleansed the frenzy of the AI MEME era and are embarking on more grounded and feasible construction of decentralized AI infrastructure on Solana.

· Nous Research is dedicated to training open-source AI models that can compete with mainstream large models such as OpenAI in a decentralized manner. Its core Psyche network significantly reduces inter-node communication frequency through compression technology, effectively addressing the communication bandwidth bottleneck of decentralized AI training. This enables the network to support AI training scenarios with high computational requirements like LLM pre-training while recording node contributions and completing incentive distribution on the Solana network. It has already launched the Hermes series of open-source models based on Llama model fine-tuning.

· Arcium was initially a privacy protocol Elusiv on Solana, which later transformed into a broader privacy computing platform. Using MPC and ZKP technologies, it allows computation on encrypted data without revealing the data content. This not only provides privacy protection for users in areas such as Defi and Desci but also establishes a privacy infrastructure for AI models that require attention to training data privacy, inference, and AI Agent applications.

· Neutral Trade is a Solana-based hedge fund platform that offers various 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. It is a multi-asset, high-liquidity strategy operated through cooperation between the official team and well-known quantitative firm R* Research, achieving an annualized return of up to 95.11%. The ten million US dollars subscription limit has been filled.

Although the enthusiasm for Solana AI has declined in this phase, it also carries the connotation of separating the wheat from the chaff. The quality of projects has seen a significant improvement—stronger execution capabilities, addressing more practical issues—evolving from "dream advocates" to "pragmatists."

04 How to Evaluate Solana's Current AI Ecosystem?

From the above brief overview, we can see that the development of the AI ecosystem on Solana is early, and the coverage is quite comprehensive, making its overall strength very competitive among existing public blockchains.

Comprehensive as it is, the Solana ecosystem has also seen the emergence of many outstanding projects. For example, Nous Research is dedicated to solving the decentralized large-scale training challenge of AI models, Grass collects massive training data through a decentralized network, and Arcium focuses on building privacy infrastructure. The competitors of these projects often require a proprietary chain to support them, but they have thrived on Solana, fully demonstrating Solana's excellent scalability.

Although the current hype of on-chain AI has been diverted to Base, BNB Chain, and others, in the long run, the possibility of a single-chain dominance in the AI field is almost zero. More cooperation than competition exists between chains. With the Alpenglow upgrade, Solana's advantage in the AI field will be further strengthened:

1. Fast and Cost-Effective: Speed, throughput, and fees 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 work rely on high-frequency, rapid, and extensive interaction between nodes. Currently, Solana is already very efficient, and after the Alpenglow upgrade, confirmation times will be shortened to 150 milliseconds, further reducing latency and costs, better supporting real-time AI applications.

2. Liquidity: AI tokens, as the project's currency, greatly impact the project with price stability and smooth circulation. Solana's current average daily DEX Volume reaches $1.4 billion, ranking second only to Ethereum globally. Moreover, Solana has a mature and active DeFi ecosystem with projects like Raydium and Jito, allowing AI projects to easily access stable liquidity pools. After the upgrade, it is expected to attract more market makers, provide deep liquidity, help AI tokens circulate and raise funds quickly.

3. Smart Contract Support: Solana supports parallel processing and more flexible development languages. Its Solana Virtual Machine (SVM) can handle complex logic more efficiently, suitable for the more complex on-chain executions needed for AI tasks (such as Agent decisions or data validation). After the Alpenglow upgrade, the contract functionality will be more robust, run more stably, making it easier for AI developers to build applications such as prediction markets or automated training.

4. Decentralization: Although Solana has long been criticized for "not being decentralized enough," this is only because the reference point is Ethereum. Its current 2,000+ nodes far exceed many popular performance chains and proprietary chains. The Alpenglow upgrade will reduce operating costs, attract more nodes, further increase decentralization, enhance censorship resistance and global distribution of the AI ecosystem.

5. Ecosystem Interoperability: As a general-purpose blockchain, Solana's ecosystem is more comprehensive, diverse, and mature, enabling AI projects to easily collaborate across domains. For example, the AI Agent utilizes the DePIN compute network for seamless interaction with on-chain RWA assets. The extensive ecosystem can effortlessly empower AI projects.

05 Final Thoughts

Being in the cryptocurrency space, we always witness the birth of exciting narratives and the collapse of anxious narratives. Solana, known for its abundance of memes, is a master in storytelling. "NASDAQ on-chain" and AI are undoubtedly its two most significant narratives.

The arrival of the Alpenglow upgrade is highly anticipated. At that time, Solana, which once single-handedly competed with Ethereum and the entire Layer 2 ecosystem, will become even more powerful. But will it be powerful enough to uphold these two significant narratives and compete with more general-purpose and proprietary chains? Perhaps only time will tell the answer.

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