Major Upgrade of Solana and Development of AI Ecosystem

Many relationships in the world are like a seesaw. On one side, the price of ETH's tenth anniversary coin is experiencing a resurgence, while on the other side, SOL is feeling a bit anxious. Not only has the path of the "Ethereum killer" become more difficult, but it has also welcomed a batch of its own "competitors", suggesting a sense of the tides turning.

However, moderate anxiety is not necessarily a bad thing for individuals or projects. For Solana, which has weathered many storms, it is even more familiar with how to handle such situations. In this article, we will learn about some significant recent initiatives from the official Solana and delve into the current landscape and future prospects of Solana AI in the AI sector.

01. Frequent Major Moves by the Official

Alpenglow Upgrade: Replacing SoH, Accelerating the Race with Competitors

Alpenglow is regarded as the most significant upgrade to the Solana core protocol to date, comparable in importance to Ethereum's transition from PoW to PoS consensus. The mission of Alpenglow is to replace the existing PoH (Proof of History) and Tower BFT (Tower Byzantine Fault Tolerance) consensus mechanisms.

In the past, PoH significantly simplified block synchronization time because there was no need to synchronize timestamps, and Tower BFT adopted the "single packaging, multiple voting" method, allowing Solana to lead in performance in its early days. However, this structure causes enormous computational overhead during high load, compounded by the single leadership overload issue of Tower BFT, leading to the frequent criticism of Solana's downtime issues. Additionally, Solana is often criticized for having high node operation costs and not being decentralized enough.

Alpenglow reduces the computational burden on the leader node by removing PoH and adopting Votor (stake-weighted voting) combined with node clock processing time order and confirmation. Another core component, Rotor, optimizes block propagation and synchronization, reducing the block confirmation time from 12.8 seconds to 150 milliseconds. At the same time, Rotor reduces the communication overhead and computational burden between nodes, allowing weak nodes to participate efficiently, achieving "performance upgrade without hardware upgrade."

According to the validator revenue calculation, after the implementation of Alpenglow, the minimum staking amount required for validators to profit will decrease from 4850 SOL (approximately $800,000) to 450 SOL (approximately $75,000).

The Alpenglow white paper states: "Alpenglow will become a turning point for Solana; it is not only a new consensus protocol but also a crucial step for Solana to achieve competitive capabilities at the level of internet infrastructure." In short, Alpenglow aims to make Solana faster, more stable, cheaper, more scalable, and more decentralized, reclaiming the throne of performance and freeing it from the troubles of downtime.

ICM Roadmap: Re-optimizing trading, continuously heading towards the "On-chain Nasdaq"

After the Alpenglow upgrade, Solana Labs, in collaboration with several core development teams within the ecosystem, released a more detailed "Internet Capital Markets" (ICM) roadmap.

In the past few years, Solana has attracted a large number of users and DeFi market share due to its low costs and fast transactions. However, the trading-specific chain Hyperliquid has rapidly risen to occupy over 70% of the on-chain contract market. The founder of Hyperliquid even publicly criticized Solana's speed as "not fast enough," which undoubtedly makes Solana feel a sense of crisis.

Currently, the final confirmation time for transactions on Solana is 12-13 seconds, while Hyperliquid has an average confirmation time of about 0.2 seconds. It is expected that after the Alpenglow upgrade, Solana's confirmation time will reach 150 milliseconds, regaining its speed advantage and achieving Visa-level transaction confirmation capability.

In addition to increasing speed, Solana also plans to give more power to dApps on the platform, known as ACE (Application-Controlled Execution), allowing dApps to autonomously decide transaction priority, making them more flexible and powerful in handling complex issues. At the same time, Solana plans to improve market health and provide better prices for retail investors by addressing high-frequency arbitrage issues through the introduction of BAM and the Alpenglow upgrade, enabling DEXs within the ecosystem to tackle these challenges.

The grander goal is to create a truly "on-chain Nasdaq" to help more companies bypass the complex IPO process and conduct on-chain financing. Solana co-founder Anatoly Yakovenko stated that he hopes to complete the on-chaining of traditional financial assets (RWA) within a year, and to provide compliant, open-source on-chain IPOs for entrepreneurs within five years, ultimately building an open, low-cost, decentralized internet capital market.

02, In a tumultuous autumn, how will AI narratives develop?

Public chains typically do not easily change their consensus strategies; any changes are often driven by significant threats.

In terms of trading business on the core chain, whether it is Hyperliquid as a trading-specific chain rapidly eroding Solana's advantages in the DEX perpetual contract market, or the rising star Sui as a general-purpose chain comprehensively catching up in multiple fields such as DeFi and DeAI, coupled with the resurgence of hot topics like stablecoins, RWA, and micro-strategies pushing ETH's status even higher, all of this has put considerable pressure on Solana, forcing it to accelerate upgrades in an attempt to reverse the situation.

The AI field, which Solana takes pride in, is also not optimistic. After the previous DePIN and AI Agent MEME craze subsided, the Virtuals ecosystem quickly rose to prominence, allowing Base to occupy an absolute advantage in the AI Agent field; BNB Chain, on the other hand, leveraged celebrity effects and exchange resources to divert a significant amount of attention from AI MEME. Meanwhile, in the decentralized AI infrastructure sector, the rapid expansion of the Bittensor subnet and the emergence of numerous AI Layer 1s are gradually forming a new force in the DeAI field.

For a time, anxiety seemed to have spread to all levels of the Solana chain, but the battle-hardened Solana clearly will not 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 sufficient humility and a pragmatic attitude, clearly benchmarking against competitors, gradually addressing shortcomings, and even aiming to become stronger.

Next, we will sort out the AI ecosystem of Solana and see if Solana's AI narrative can still help it usher in a new round of prosperity.

03. The AI Landscape of Solana

The development time of AI projects on Solana is astonishing, with a wide range of tracks. We can roughly categorize the AI projects on Solana into three stages based on the time intervals.

Phase 1: Early DePIN ecosystem explosion, DeAI sprouting growth

The popularity of the DePIN concept has made Solana one of the first public chains to explore decentralized AI on-chain. These projects rely on the strong performance and low cost of the Solana blockchain to build their own decentralized computing power, bandwidth, and data networks, thus laying an early foundation for the Solana AI ecosystem.

In the field of AI computing power networks, early projects like Render, io.net, and Aethir were among the first to attempt decentralized computing power on-chain, though each has its own focus. These projects are early explorers in the already saturated market of decentralized computing power networks, and as early entrants, they have raised substantial funding and are well-regarded in the market. However, these projects typically require high-performance GPUs to participate in the network, which presents a barrier that is too high for the average person.

In contrast, Grass, Helium, Roam, and Gradient Network have a relatively strong grassroots foundation. These projects have actively explored the infrastructure fields where blockchain and AI intersect (such as bandwidth, data, computing power, etc.), not only bringing tremendous imagination and confidence to the market but also further opening a new chapter for DeAI. Although the token prices of these projects have retreated from their peaks, network effects are still apparent, and many projects have established partnerships with traditional large companies, gaining recognition in the mainstream market.

Phase Two: AI Agent Blossoms in Many Aspects

With the significant improvement of LLM capabilities represented by Chatgpt, applications such as AI Agents have rapidly developed in the past year. Solana, with its outstanding performance and rich ecosystem, has become one of the first public chains to benefit from the prosperity of on-chain AI Agent tokens and related applications.

Projects such as Wayfinder, ElizaOS, Holoworld, Moby AI, Hey Anon, etc. have emerged during this phase. In addition, many well-known agents and application projects have appeared on the Solana chain during the AI boom at the beginning of the year, such as the Agent framework $ARC, $SWARMS, the DeFAI platform $GRIFFAIN, $BUZZ, the AI Agent launcher $HAT, and well-known AI agents $PIPPIN, $ZEREBRO, etc. However, after the tide receded, the prices and popularity of these projects quickly declined, and some projects are in a stalled state.

Phase Three: In the Post-Chain AI Era, Stepping More Solidly Towards Chain-based DeAI

As the market gradually returns to rationality, a new batch of projects has emerged on the Solana chain, washing away the noise of the AI MEME era and building decentralized AI infrastructure more solidly and feasibly on Solana.

Nous Research is committed to training open-source AI models that can compete with mainstream large models like OpenAI through a decentralized approach. Arcium initially started as a privacy protocol Elusiv on Solana and later transformed into a broader privacy computing platform. Neutral Trade is a hedge fund platform based on Solana that offers various AI-driven quantitative and automated trading strategies.

Although the popularity of Solana AI has declined in this stage, it also has a sense of sifting through the sands of time. The quality of projects has significantly improved—stronger implementation capabilities and solutions to more practical problems—evolving from "dream speakers" to "pragmatists."

04, Assessment of the Current AI Ecosystem on Solana

Through the above general inventory, we can see that the AI ecosystem on Solana has developed early, with a very comprehensive coverage, and its overall strength is still very competitive among existing public chains.

At the same time, many excellent projects have emerged in the Solana ecosystem. For example, Nous Research is dedicated to solving the challenge of decentralized large-scale training for 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 proprietary chains to support them, while they are developing well on Solana, fully demonstrating Solana's outstanding capacity.

Despite the current heat of on-chain AI being diverted by Base, BNB Chain, and others, the possibility of one chain dominating the AI field in the long term is almost zero. The relationship between chains is more about cooperation rather than competition. At the same time, with the Alpenglow upgrade, Solana's advantages in the AI field will be further strengthened:

1. Fast and cost-effective: Speed, throughput, and costs are the most critical factors for on-chain AI projects. After the Alpenglow upgrade, the confirmation time has been reduced to 150 milliseconds, further lowering latency and costs, which can better support real-time AI applications.

2. Good liquidity: Solana's current average daily DEX Volume reaches $1.4B, ranking second in the entire network, only behind Ethereum, and has a mature and active DeFi ecosystem, allowing AI projects to easily access stable liquidity pools.

3. Smart Contract Support: Solana supports parallel processing and more flexible development languages, and its virtual machine SVM can handle complex logic more efficiently, suitable for the more complex on-chain execution required for AI tasks.

4. Decentralization: The Alpenglow upgrade will reduce operating costs, and it is expected that more nodes will join, further enhancing the level of decentralization and strengthening the AI ecosystem's resistance to censorship and global distribution.

5. Ecological Interaction: As a general-purpose chain, the ecosystem on Solana is more complete, diverse, and mature, making it easier for AI projects to collaborate across fields. A comprehensive ecosystem can easily empower AI projects.

05, Conclusion

In the crypto world, we are always particularly excited about the birth of narratives, yet anxious about their demise. Solana is a master in narrative creation. "On-chain Nasdaq" and AI are undoubtedly its two most important narratives.

The arrival of the Alpenglow upgrade is highly anticipated. At that time, Solana, which once fought against Ethereum and the entire Layer 2 ecosystem by itself, will become even stronger. But will it be strong enough to carry these two narratives and compete with more general-purpose and proprietary chains? Perhaps only time will tell the answer.