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As mentioned already in other blog posts, we are fully convinced that the multichain trend will intensify in the years ahead. We don’t expect a single blockchain infrastructure to be able to best serve all kinds of applications crypto enables, from the Metaverse and gaming to DeFi and payments. This is why we are building our DeFi wallet as a multichain product at its core and are planning to support several blockchains as soon as possible.
That said, we had to decide on which blockchain layer to launch the first iteration of our mobile DeFi wallet on in Q2 2022. We evaluated different networks from many angles and discussed at length what the best technical foundation would be to accomplish our mission of bringing DeFi to the masses.
Ultimately, we chose to build on Solana first. In this article, we want to explain some of the factors that led us to make that decision.
Solana’s technology allows for a new level of scalability, throughput, and low fees
In its initial pitch deck, Solana’s founder Anatoly Yakovenko said “Solana is a blockchain at Nasdaq speed”. Right from the start, Solana was built for maximum scalability, throughput and low fees. Today Solana has a theoretical peak capacity of 65k transactions per second (TPS) at 400-millisecond block times and has an average transaction fee of $0.00025. In the Solana whitepaper it is claimed that the theoretical throughput achievable is as high as 710k TPS with today’s hardware.
No other blockchain allows for that level of scalability right now. And since Unstoppable Finance’s core mission is to bring DeFi to the masses in a more accessible and user-friendly way, average transaction speed and fees are two of our main priorities.
There is no way we can build a consumer DeFi application if transactions, deposits or savings plans below $1000 (or more depending on gas fees) are not economical. Solana beats every other blockchain in that category and allows us to build true, mass-market retail products that run on decentralized rails.
On top of that, we are witnessing how Solana’s scalability is allowing some new DeFi primitives to finally come to bear. Options and derivatives markets, hitherto impeded by long transaction confirmation times and unsustainable costs, are gaining significant momentum on Solana. It is not a coincidence that structured products protocols such as Friktion Finance are choosing to build their applications on top of it. Its scalability advantages bring some of DeFi’s promises finally to fruition.
We want to build a wallet user experience that is as snappy, seamless, and intuitive as the UX of major global banking or brokerage fintech apps. Visa-like scalability of the underlying blockchain layer was a prerequisite for that, which is why Solana feels like the best place for us to start and onboard new users into DeFi.
Unstoppable Finances’ founders have a strong track record and background in building highly scalable trading platforms, having founded and scaled the first regulated crypto exchange in Germany with Börse Stuttgart Digital Exchange. Making trading on decentralized exchanges more accessible and intuitive is a core element of our wallet experience and also key to our business case (e.g. MetaMask generated $270m in swap fees in 2021 alone). With our team background in trading in mind and the mission to offer a super low friction DeFi experience, choosing “the NASDAQ of blockchains” felt like the natural home to start.
If you are interested in learning more about how this level of scalability is achieved technically, this article from Anatoly Yakovenko does a good job of summarizing Solana’s 8 core innovations compared to other blockchains.
Solana’s ecosystem is thriving at a record-level speed
The second major factor that led to our decision relates to the flourishing community and ecosystem that has been built around Solana at record-level speed.
According to Electric Capital’s Developer report 2021, Solana is one of the 5 largest blockchain developer ecosystems overall. Among these, Solana had by far the greatest developer growth between December 2020 and December 2021. No other blockchain reached 1000 total developers as fast as Solana.
On top of the number of developers, Solana’s ecosystem of DeFi applications and protocols literally exploded in 2021. DeFi TVL went from $1 billion to temporarily over $15 billion in a matter of 2-3 months, with hundreds of products and projects launched every week.
By now, Solana has a thriving DeFi ecosystem with hundreds of composable and inter-connected applications, some of them clearly being at the technological forefront of the overall crypto space: AMMs like Raydium and Orca, Serum as an underlying decentralized order book, liquid staking protocols like Lido or Marinade, lending products like Solend or Sunny, futures markets like Mango, or the aforementioned derivatives protocols of Friktion, Katana and Ribbon.
The existence of these high-quality protocols built by world-class teams (often with a background in traditional finance and trading) enables developers and entrepreneurs to quickly build financial applications on top, which is creating a spinning flywheel effect rivaled only by Ethereum.
What is true for DeFi also counts for NFTs. In record-level fashion, Solana became the number two blockchain for NFT minting, trading, and community growth. Its two biggest marketplaces Magic Eden and Solanart are among the top 5 NFT marketplaces overall with regard to NFT sales volume. In the last week of March, MagicEden had 76% of OpenSea’s users, and is rapidly rising. Furthermore, the average Opensea user is transacting only 5x a month whereas the average MagicEden user is transacting 26x per month (Source).
Last but not least, the strength of the Solana ecosystem is also reflected by 1.5 million twitter followers, a buzzing Discord server, and vibrant Solana events around the world such as the Solana breakpoint conference or the Solana hacker houses. The Solana foundation does a remarkable job at building a strong brand and at supporting this entire ecosystem of developers and teams with advice, grants, and visibility.
Many teams around the world, both small startup teams and big corporate organizations, are currently assessing the blockchain landscape and deciding where to launch their Web3 product. And quite frankly, every solution has its own trade-offs. For us, Solana’s scalability, low fees, wide DeFi ecosystem, and its vibrant community were the main factors leading us to this decision.
And we are seeing how more and more projects, especially those with a strong tech/finance background, are picking Solana as their first or second step into crypto as well. As a few examples, serial entrepreneur Justin Kan is building his new gaming NFT marketplace Fractal on Solana, Coinbase wallet is now supporting Solana as the first non-EVM chain, the largest NFT Marketplace OpenSea has announced support for Solana NFTs and even Michael Jordan is launching his Web3 platform on Solana.
We believe that large institutions from Wall Street and Silicon Valley will soon have to make similar choices. The public blockchains leveraged by these companies will see a level of adoption and network effects (wallet infrastructure, DeFi protocols, NFT creators, DAOs, analytics etc.) unlike anything we have seen before. And we believe that a significant part of them will choose Solana.
Nonetheless, this is just a first step for us on a long road of supporting all of the most important blockchain ecosystems out there. The future is multichain and so will we. Multichain support and bridging is the number one feature request from non-custodial wallet users (see our wallet survey here). Therefore, we can’t wait to also support Ethereum by the end of this year, with more to come in 2023.
Unstoppable Finance is building a DeFi Super App with the mission to become the universal consumer gateway to Web3. A multi-chain, fully non-custodial wallet that makes investing into web3 truly mass-ready. Say goodbye to complexity. Say hi to DeFi. Launching soon.