Solana Year in Review: Innovation Everywhere and Tokens Galore

It’s been a good year for crypto, but it’s been an especially good one for Solana. Both the network and its eponymous token have enjoyed a bumper 2024, with SOL up heavily against USD and ETH for the year to date. But as anyone who’s spent serious time in Solana’s ecosystem will attest, token price is merely a reflection of network strength.

This year, Solana has shaken off the technical hiccups that have occasionally bedeviled it in the past and it shows: everything is ticking over smoothly, allowing the myriad Solana sectors to flourish. Memecoins of course, but also DeFi, including verticals such as LSTs, which have really taken off this year, plus the usual smorgasbord of NFTs, gaming, and even a smattering of institutional solutions. There’s a lot to unpack in Solana’s biggest year yet so let’s get into it.

Tech Upgrades to Keep Solana Ticking

2024 brought substantial upgrades to Solana’s underlying protocol, including performance enhancements and changes to its runtime. Electric Capital’s 2024 Developer Report highlighted the fact that Solana attracted more developers than Ethereum this year, making it the most popular blockchain by active dev activity. It also noted that “Solana captures 81% of DEX transactions and has the highest number of unique trading wallets” among all smart contract chains.

Solana’s emphasis on high performance, compounded by the Firedancer upgrade, made it a magnet for developer talent. Enhanced tooling improvements and frameworks provided the impetus for an uptick in new projects, ensuring a pipeline of fresh dapps primed for mainstream users. Anchor, Solana’s popular development framework, further solidified its role as the go-to platform for building robust applications. This standardization has made it easier for new devs to onboard, while existing teams minimized overhead by capitalizing on Anchor’s well-documented code and ecosystem support.

In mid-summer, Solana’s Firedancer update boosted throughput to as much as 1M TPS and introduced a  new validator client while aiming to reduce Solana’s susceptibility to bugs, exploits, and attacks. In terms of user interest, Solana vastly outperformed other blockchains, capturing more attention than the next 10 most popular networks combined.

Firedancer has been instrumental in enabling the Solana network to keep pace with the increasingly frantic spate of onchain trading it now supports, much of it originating from Pump.fun and the subsequent Raydium pools where graduating memecoins are deployed. More than 67% of all new tokens were launched on Solana between January and November.

Solana Projects That Stepped Up to the Plate

Pump.fun might have captured most of the mindshare – and the SOL – which flowed through the Solana network this year, but it was by no means the only show in town. 2024 was the year when Solana DeFi came of age and demonstrated that it can hold its own against anything the Ethereum ecosystem can offer. TVL in Solana DeFi protocols 5x’d this year, surpassing $10B, as existing primitives came of age and new entrants launched to complete the network’s range of money markets.

Mango Markets embodied this surge, demonstrating that there’s organic demand for DeFi yield generation when it’s married to a secure framework for onchain chain risk management. Liquid staking was one DeFi vertical that performed especially well on Solana, led by Marinade, whose reputation for security and user-friendliness helped grow its TVL to close to $2B in SOL. Xandeum’s own liquid staking program also attracted significant interest, with more than 30K SOL pledged, thanks in part to the industry-leading APY of 15%.

On the trading side of things, Solana’s DEX landscape was well served by Orca, which now has over $320M in TVL, fueled by its novel concentrated liquidity model. Solana’s perps market also got a leg up thanks to the launch of Orderly, which deployed its omnichain orderbook. For the first time, both EVM and non-EVM users can trade perps from a shared orderbook.

Gaming and NFTs Level Up

Solana has long been established as the home of retail recreation, which for a significant proportion of all onchain users means gaming and NFTs. While the last 12 months have proven challenging to most NFT projects, save for a handful of outliers (here’s looking at you Pudgies), there’s still been innovation in spades. This is particularly true of NFT marketplace Magic Eden, whose long-awaited airdrop has laid the foundations for the next phase of its evolution, as it seeks to become a true omnichain protocol that extends the possibilities of what jpegs are capable of.

Solana also retains its share of web3 games that are intent on making GameFi a mass-adopted reality, chief among them Star Atlas which is at the helm of this metamorphosis. From immersive metaverse experiences to interoperable in-game assets, it’s adroitly showcasing Solana’s potential for next-generation gaming experiences where speed and lower transaction fees are decisive factors.

Cross-Chain Progress Draws Solana to the Omnichain Center

If there’s one area in which Solana has always lagged behind EVM networks, it’s in terms of interoperability. Its unique architecture and smart contract logic have made it a lot harder to port existing dapps over to Solana and slowed the development of cross-chain bridges and other interoperability solutions. Thankfully, this was another domain where Solana made significant headway in 2024.

Wormhole deserves much of the credit for this, with its multichain protocol now the gold standard by which interoperability technology is measured. It means that any dapp or token can effortlessly go multichain, whether that’s by expanding to Solana, or going from there to meet the rest of the EVM world. Wormhole has made significant progress in enhancing cross-chain messaging, enabling smart contracts on one chain to execute based on events that occur on another.

Institutions Sail With Solana

With Solana’s network reliability issues now firmly in the rear view mirror, institutions have begun taking Solana seriously. While still at an early stage, there are signs that pro trading firms and enterprises are beginning to onboard to a network where the fees are low, throughput is high, and opportunities are boundless. Circle extending USDC’s integration to Solana has certainly helped, clearing barriers for big players hesitant to dabble without deep liquidity and a reliable unit of account in place.

Elsewhere, Franklin Templeton, a major financial player with trillions in AUM, is launching a money market fund on Solana, and the network’s also poised to gain its first MiCA-compliant stablecoin courtesy of Société Générale. VCs and hedge funds continue to express bullish sentiment on the prospects of both Solana and its native token.

Community Developments

On the community side of things, there’s been a lot to take in over the past 12 months. A number of governance proposals were passed, with the most significant being the decision to allocate all priority fees to validators, rather than automatically burning half. On the events front, the preeminent Solana conference, Breakpoint, was action-packed and filled with big ideas from the network’s developer community, showing the pace with which innovation is gathering steam.

Naturally the early success of the Firedancer upgrade was a particular talking point, but there was also plenty more to discuss further up the stack. The growth in cross-chain solutions that aggregate liquidity, enhancing Solana’s trading experience, was covered by numerous delegates, while PayPal’s José Fernández made all the right noises about Solana being better suited than Ethereum to handle high volume payments.

Community-focused Solana hackathons and meetups were frequent occurrences throughout the year, led by passionate local groups across Europe, Asia, and the Americas. These events served not only as educational hubs but also as incubators for early-stage ideas destined to become tomorrow’s flagship projects.

Challenges and Areas for Improvement

2024 was a less controversial year for Solana with its network operating smoothly and everyone broadly happy in an “up only” environment. If there was any backlash, it was leveled against Pump.fun on account of its value accretive formula that made a lot of money for the platform and the top 10% of traders capable of navigating the trenches, but major L’s for the long tail of retail, most of whom put in more than they got back.

Of course, this is the nature of open markets, and is indicative of little more than the public’s willingness to gamble on dubious tokens with a fly’s lifespan. The livestreaming memecoin meta caught flak, in particular, as creators went to increasingly extreme lengths to garner attention. Overall, though, Solana managed to skirt serious controversy, which is quite a feat.

Looking Ahead to 2025

Looking toward 2025, the Solana ecosystem is abuzz with talk of further speed improvements, more sophisticated chain-level governance, and the scaling out of verticals like AI, advanced data feeds, and RWA tokenization. The Xandeum mainnet launch also looms in Q1, giving Solana the data storage layer it needs to deliver exabytes of data for hungry dapps, particularly those hosting AI use cases.

Solana finishes the year in a much better place than it started. The network’s success in scaling DeFi, NFTs, gaming, and cross-chain interoperability demonstrates its readiness for the year to come. From mainstream institutional adoption to capturing the lion’s share of the burgeoning memecoin and AI agent economy, Solana has demonstrated that its ambition and capacity go well beyond fleeting hype cycles. Those who placed their faith and fortunes in Solana at the start of the year have been richly rewarded.