The Success of Solana

Currently #5 among cryptocurrencies by market cap, the success of Solana has exploded over the past few weeks, riding a suddenly-revived crypto market.

How big has Solana’s move been? After reaching nearly $200 in 2022, SOL crashed to $10 in 2023. Now, the token is riding high again, cresting $100.

So what’s driving Solana’s success? What’s going on behind the scenes in the Solana ecosystem, and what does it say about the future of Solana? We’ll cover all that and more in this breakdown.

Solana’s Performance in 2024

Solana’s 2024 performance began in 2023. In the last quarter of the year, the crypto market rebounded. A rising crypto tide lifted Solana’s boat, but that wasn’t all.

That quarter, memecoins based on the Solana ecosystem went absolutely crazy. Pyth Network ($PYTH) and Jito both arrived as airdrops in November, and both prompted a memecoin feeding frenzy.

And then, of course, there was bonk.

A memecoin worth basically nothing, bonk built momentum throughout 2023, generating huge returns (up to 7,307%!!) for enthusiasts. Bonk’s success fed back through to Solana, pushing daily transactions on the Solana blockchain higher; on the list included at the link, Solana ranked sixth, with over 900% gains for 2023.

The memecoin rush and SOL’s performance had a couple of curious side-effects.

Bonk coins could be airdropped to Solana Mobile phones. This drove a surge of interest in the mobile devices, resulting in fantastic demand for a product that otherwise had been largely overlooked. Saga mobile phones were originally priced at $1,000, and struggled to sell, even with a limited run of only 20,000.

But once bonk went nuclear, investors discovered a loophole; all Solana Mobile Saga phones came with 30 million bonk tokens. Those tokens could be worth more than the phone itself, given how many of the remaining Saga phones had been heavily discounted.

Once that fact became public, the remaining Saga supply vanished, nearly overnight. And with demand now peaking, Solana Mobile announced a new, improved, and cheaper version of the Saga for 2024.

Fad or fact?

So far, so good – but is Solana built on anything more than memecoins and low-production Android phones?

There’s certainly room for concern. The crypto market rebounded in 2023, particularly in the final quarter, largely because of the intense focus on a potential Bitcoin-based ETF. Once that ETF was approved, the market promptly cooled, at least slightly.

Solana’s performance, buoyed as it was by a memecoin feeding frenzy, could follow suit. Memecoins are notoriously volatile, even by crypto standards. And there’s no way to accurately predict what will happen with broader market trends. Some of the recent wins for Solana might not continue. The new Saga phones, as an example, might not sell better than the first ones did initially.

But a closer look at the Solana ecosystem, and a different picture emerges.

Solana: Developers Rust-ing Away

The market downturn drove away hordes of developers from the booming crypto scene; according to one report, open-source developers working in crypto declined to just over 22,000 by the end of 2023. That number was down nearly a quarter from the year before, when there were over 29,000 developers in the field.

But at the same time, the number of active developers who’d been working in crypto for two years or more increased, by almost a third.

Why the seeming contradiction?

One answer is that the bear market forced a lot of projects to close, decreasing demand. At the same time, some devs started looking for greener pastures. The ones who remained tended to believe strongly in the future of crypto, as evidenced by their greater experience.

Back to Solana. Underneath the memecoin frenzy, there’s a growing number of Solana developers steadily working away. The 2023 year-end report from the Solana Foundation found that three-month developer retention increased significantly over the course of the year, from roughly 30% to over 50%. That increase reflected better onboarding, increased opportunities, and a positive outlook for the Solana ecosystem.

The Plexus Viewpoint

Here at Plexus, we’re seeing something similar. In 2022, the Rust programming language, a core language for the Solana ecosystem, accounted for only 4% of languages hired. But in 2023, Rust programmers featured in over 10% of our hires.

Memecoins factor prominently in Solana’s rebound. But a strong developer community, steady developer retention, and the growth of Rust all point to a promising future for one of 2023’s best-performing crypto ecosystems.

Interested in getting involved? Want to put your Rust skills to work in a fast-growing ecosystem? Check out our crypto jobs board to see our vacancies as a Rust engineer.