Original Title: "Solana Aims to Build an 'On-Chain Nasdaq,' What is the Future of AI Narratives?"

Original Source: Biteye

"Solana's greatest advantage lies in its universality, 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 sees a price revival on its tenth anniversary, while on the other side, SOL's days are a bit anxious—The road to being an "Ethereum killer" has become even more challenging, welcoming its own set of "killers"—quite a turn of the tide.

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

01 Series of Major Official Moves

1. Alpenglow Upgrade: Replacing SoH, Racing Against Faster Competitors like SUI

Alpenglow is touted as the most significant upgrade to Solana's core protocol to date, with significance comparable 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 (Byzantine Fault Tolerance) consensus mechanisms.

Why replace the current consensus mechanisms?

In the past, PoH, by not needing to synchronize timestamps like other blockchains, coupled with Tower BFT's "one to lead, others to vote" approach, significantly simplified block sync times, allowing Solana to outperform all other public chains in early days with high performance. However, under heavy loads, PoH causes significant computational overhead, compounded by the single leader overload issue in Tower BFT, leading to Solana's frequent criticism for downtime.

Additionally, a common complaint about Solana is the high node operation costs, resulting in insufficient decentralization.

How does Alpenglow improve this?

In simple terms, Alpenglow removes the potential computational bottleneck of Proof of History (PoH) by using Votor (Weighted Voting) to combine node clock handling time sequencing and confirmation, reducing the computational burden on leader nodes; and addressing the downside of a single leader by designing for future paving the way for multiple leaders to concurrently propose blocks.

Another core component, Rotor, is used to optimize block propagation and synchronization, reducing block confirmation time from 12.8s to 150ms. Meanwhile, as Rotor reduces inter-node communication overhead and computational burden, it allows even weak nodes to participate efficiently, achieving "performance upgrade without the need for hardware upgrade."

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

Final Expectation

As stated in the Alpenglow whitepaper: "Alpenglow will be Solana's turning point, not only a new consensus protocol but also a key step for Solana to move towards internet infrastructure-level competitiveness."

In simple terms: faster, more stable, cheaper, more scalable, more decentralized, reclaiming the throne of performance king, and breaking free from the nightmare of downtime.

2. ICM Roadmap: Reimagining Transactions, Continuously Advancing Towards the "On-chain Nasdaq"

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

Over the past few years, Solana has attracted a large user base and gained a significant market share in DeFi with its low-cost and high-speed transactions. However, the transaction-specific chain, Hyperliquid, has rapidly surged, capturing over 70% of the on-chain smart contract market. The founder of Hyperliquid even openly criticized Solana's speed as "not fast enough." This undoubtedly made Solana feel the urgency.

Is Solana not fast enough yet?

Currently, final transaction confirmation on Solana takes 12-13 seconds, with Hyperliquid's average confirmation time at around 0.2 seconds, and SUI's average confirmation time at 0.5 seconds.

It is expected that after the Alpenglow upgrade, Solana's confirmation time will reach 150 milliseconds, reclaiming its speed advantage and achieving Visa-level transaction confirmation capability. However, there is still a gap compared to Nasdaq's "microsecond-level" high-frequency trading system.

What else besides speed?

Give more power to dApps on the platform—known as ACE (Application-Controlled Execution)—allowing dApps (smart contracts) to determine the transaction priority themselves, enabling dApps to be more flexible and powerful in handling complex issues.

Protect market makers, address MEV (flashbots and other high-frequency arbitrage attacks) issues: Hyperliquid's order matching engine provides higher priority to market maker orders, protecting them from MEV attacks, resulting in better prices to attract retail traders. Solana's ICM roadmap is similar, where with the introduction of BAM and the completion of the Alpenglow upgrade, DEXs within the ecosystem will have the ability to address high-frequency arbitrage toxic behavior, improving market health. This brings better prices to retail traders.

Grand Vision

In addition to aligning with Hyperliquid in DeFi, Solana has a grander vision—a true "on-chain Nasdaq"—to help more companies bypass the complex IPO process and raise funds on-chain.

Solana co-founder Anatoly Yakovenko recently mentioned in an interview that he hopes to complete Real World Assets (RWA) on-chain within a year, provide compliant, open-source on-chain IPOs for entrepreneurs within five years, and ultimately build an open, low-cost, decentralized internet capital market.

Quite ambitious, but it seems to be the goal of almost all leading public chains. Currently, we see Solana continuously striving to reform in various aspects such as underlying architecture, ultimate performance, and application scenarios. However, this strategy will still require time and market validation to break through in this highly competitive era.

02 Autumn of Turbulence, How Will AI Narrative Develop?

Public chains usually do not easily change their consensus strategies, just as no one would casually change their nationality. Once changed, it is often driven by significant threats.

In terms of core on-chain transaction business, whether it is Hyperliquid as a transaction-specific chain rapidly eroding Solana's advantage in the DEX perpetual contract market, or the rising star Sui as a general-purpose chain catching up in DeFi, DeAI, and other fields, coupled with stablecoins, RWA, microstrategies, and other hot topics pushing ETH back to the throne, Solana has felt considerable pressure, forcing it to accelerate upgrades to reverse the situation.

In Solana, the AI field, which used to be a source of pride, is not looking optimistic. After the fading of the former DePIN and AI Agent MEME craze, the Virtuals ecosystem rapidly emerged, allowing Base to establish absolute dominance in the AI Agent field; BNB Chain, leveraging celebrity effects and exchange resources, diverted a lot of attention from AI MEME. Meanwhile, in the decentralized AI infrastructure sector, the rapid expansion of the Bittensor subnet and the rise of numerous AI Layer 1 projects are gradually forming new forces in the DeAI field.

At one point, anxiety seemed to have spread to various aspects of the Solana blockchain, but the battle-hardened Solana is evidently not ready to give up easily. Currently, the Alpenglow upgrade appears to have brought strong confidence to the ecosystem. At the very least, the Solana team has shown enough humility and pragmatism, clearly benchmarking against competitors, gradually filling gaps, and even aiming to surpass.

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

03 Solana's AI Landscape

The longevity and breadth of AI project development on Solana are truly astonishing. Here, we can roughly divide Solana's AI projects into three stages based on their development timeline.

Stage One: Early DePIN Ecosystem Explosion, DeAI Sprouts

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

Regarding AI computing power networks, early projects such as Render, io.net, and Aethir were among the first to attempt on-chain decentralized computing in different ways:

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

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

· Aethir mainly 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 $ATH tokens.

These projects were early explorers in the already crowded decentralized computing power network space. As early entrants, they received large funding and were highly regarded by the market. However, these projects usually 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 simply by downloading a browser plugin or app and engage in web crawling activities to collect network data. User contributions are recorded on the Solana blockchain, and they receive $GRASS rewards.

· The Roam-built network aims to provide seamless, secure global internet coverage through community-provided WiFi nodes. Users can earn $ROAM tokens by either providing WiFi coverage or validating networks through the app. The project uses 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.) by installing a plugin to support AI inference, content delivery, serverless functions, and other scenarios. Through Solana's on-chain mechanism, the platform handles device coordination and payments to ensure efficient and secure decentralized computing.

· Helium provides IoT and mobile network coverage in a decentralized manner, using Solana to record hotspot data and transactions. Users purchase and deploy Helium Hotspots (devices priced around $200-500) to provide network coverage and receive rewards in $HNT or $MOBILE tokens. A more user-friendly way to participate is by using Helium and T-Mobile's phone card launched in the US region, enabling "Network Mapping" to share anonymous location data to optimize network coverage. This can earn Cloud Points or $MOBILE tokens and offers a free trial of the phone card.

These projects have actively explored the convergence of blockchain and AI in foundational infrastructure areas such as bandwidth, data, computing power, and more. They have not only brought significant imagination and confidence to the market but have also opened a new chapter in DeAI. Despite some token price retracements from their peaks, network effects are still evident, with many projects establishing partnerships with traditional big companies and gaining recognition in the mainstream market.

Phase Two: AI Agent Blossoming

With the significant improvement in AI capabilities, exemplified by models like ChatGPT, AI Agent applications have rapidly advanced in the past year. Leveraging its outstanding performance and robust ecosystem, Solana has emerged as one of the first blockchains to host a thriving ecosystem of on-chain AI Agents and related applications.

· Wayfinder, developed by Parallel Studios (backed by Solana Ventures, known for their previous Solana-based blockchain game Colony), simplifies cross-chain operations using an AI Agent, enabling seamless asset transfers 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 rapidly process information, execute transactions, interact with smart contracts, and participate in governance through the DAO AI16Z. The DAO token $AI16Z once reached a market cap exceeding $25 billion, making it a flagship AI token on Solana. However, due to its strong meme nature, its value later stabilized.

· Holoworld is a multimodal AI Agent launching platform that allows individuals to create, customize, and trade AI Agents. It supports customization of 3D avatars and videos, with all digital asset interactions managed through Solana smart contracts.

· Moby AI, initially focused on Alpha research and providing real-time encrypted information, has now launched its own terminal, concentrating on Alpha mining and trading on the Solana blockchain.

· Hey Anon is a DeFAI protocol deployed on Solana, aiming to simplify DeFi interactions through natural language processing and real-time data aggregation. It assists users in managing DeFi operations, staying updated on projects, and analyzing market trends.

Furthermore, during the early-year AI frenzy on Solana, many notable Agent and application projects emerged on-chain, such as Agent frameworks $ARC and $SWARMS, DeFAI platforms $GRIFFAIN and $BUZZ, AI Agent launcher $HAT, renowned AI Agents $PIPPIN and $ZEREBRO, and more. However, after the hype subsided, the prices and popularity of these projects quickly declined, with some development efforts stalling.

Phase Three: Post-On-Chain AI Era, Moving More Steadily Towards 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, cleansing the frenzy of the AI MEME era and pursuing a more steady and feasible development 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 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 such as LLM pre-training and records node contributions and incentive distributions on the Solana network. It has currently 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 technology, it allows computation on encrypted data without revealing the data content, providing privacy protection not only in areas such as Defi and Desci but also establishing 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 common quantitative neutral and arbitrage strategies, it has a well-performing CTA Momentum strategy. It is a multi-asset, high liquidity strategy operated in cooperation with the renowned quant company R* Research, achieving an annualized return of up to 95.11%. The ten million USD subscription limit has been filled.

Although the enthusiasm for Solana AI has somewhat cooled in this phase, it carries the connotation of a significant shakeout. The project quality has significantly improved — stronger implementation capabilities and solutions to more practical problems, evolving from "dream advocates" to "pragmatists."

04 What Is the Current AI Ecosystem on Solana Like?

From the above overview, we can see that the development of the AI ecosystem on Solana is advanced, with a comprehensive coverage and competitive overall strength among existing public blockchains.

Comprehensive as it is, the Solana ecosystem has also seen the rise of many excellent 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. Often, these projects' counterparts require a proprietary chain to support them, but they have thrived on Solana, fully showcasing Solana's outstanding 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 one chain dominating the AI field is almost zero. Inter-chain relationships are more about cooperation than competition. Meanwhile, with the Alpenglow upgrade, Solana's advantages in the AI field will be further strengthened:

1. Fast and Cost-effective: Speed, throughput, and cost are the most critical factors for on-chain AI projects. Multiple AI Agents under protocols like MCP require close coordination and transactions, and decentralized training, data collection, and other work rely on high-frequency, rapid, extensive node interaction. Currently, Solana is highly efficient, with confirmation times reduced to 150 milliseconds after the Alpenglow upgrade, further reducing latency and costs, better supporting real-time AI applications.

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

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

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

5. Ecological Integration: As a general-purpose chain, Solana's ecosystem is more complete, diverse, and mature, enabling AI projects to easily collaborate across different fields. For example, an AI Agent can utilize the DePIN computing power network to seamlessly interact with on-chain RWA assets. The comprehensive ecosystem can effortlessly empower AI projects.

05 In Conclusion

Being in the cryptocurrency circle, we are always excited about the birth of narratives and anxious about their collapse. Solana, full of memes, is truly a master in storytelling. "Nasdaq on-chain" and AI are undoubtedly his two most important 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 carry these two major narratives and compete with more general-purpose and specialized chains? Perhaps only time will tell.

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