In a new report, US hedge fund Pantera Capital has positioned Solana as the ‘Mac OS’ of blockchains, in line with its development strategy and potential impact on Apple’s popular operating system. Written by Franklin Bi, Cosmo Jiang and Eric Wallach, this report delves into the structural evolution and strategic positioning of blockchains in the technology industry.
The report begins by addressing a common question about the future state of blockchain technology: “How many blockchains must there be?” Instead of focusing on the number, the Pantera team proposes a different idea: “What is the minimum number of blockchains needed to reach the full potential of the technology?” This approach aims to understand the key factors that will allow certain blockchains to dominate the market.
The analogy to historical technology oligopolies is powerful. “Historically, developer-facing technologies have clustered around a small number of dominant players – usually two or three oligopolies, each with unique ways of serving developer preferences.” It uses examples from the evolution of applications, gaming consoles, and mobile platforms to predict a similar trajectory for blockchains.
Why Solana stands out
According to the Pantera Capital team, Solana is emerging as a formidable competitor in the blockchain space, similar to Apple during the personal computer boom. “The change is reminiscent of Microsoft’s dominance of the early desktop computer market, until Apple broke through with its vertically integrated approach,” the report notes, suggesting that Solana’s integrated and monolithic architecture could give it similar competition.
The report details several advantages of SOL architecture. First, Solana’s unified blockchain design avoids the complexity of multiple off-chains, facilitating both development and user interaction.
By controlling its entire stack, a project can quickly iterate and implement improvements, something important in the fast-paced blockchain environment. Third, reduced dependencies on external components and simplified architecture reduce potential points of failure, improving stability and security of the platform.
The authors also highlight specific applications that demonstrate Solana’s capabilities and its impact on both developers and end users. DriP, a free aggregator distribution platform, is an example of how Solana’s high performance and low transaction costs facilitate large-scale, inexpensive distribution of NFTs.
Similarly, Hivemapper leverages Solana’s efficiency to process large volumes of location data collected from drones and dashcams, providing real-time, decentralized mapping solutions that may challenge established services like Google Maps.
The report also highlights blockchain growth metrics: “Solana’s unique active addresses have increased dramatically. […] showing the platform’s phenomenal growth in user activity,” is further supported by data showing increased transaction fees and decentralized exchange volumes, indicating strong and growing demand for SOL offerings.
Concluding its analysis, the Pantera team expresses strong confidence in Solana’s future trajectory. “As more developers see the benefits of building on Solana, we can expect to see an increasing number of new projects using the efficient blockchain,” they predicted. This feeling is reinforced by a strong developer ecosystem and an active community, which is seen as essential to the ability to surpass competitors and achieve sustainable growth and relevance.
At press time, SOL traded at $123.90.
Featured image from Bitget, chart from TradingView.com
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