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Solana Squeeze: Zeta Markets CEO Discusses Congestion, Security, and the Road Ahead

Last Updated March 20, 2024 9:33 AM
Teuta Franjkovic
Last Updated March 20, 2024 9:33 AM
By Teuta Franjkovic
Verified by Peter Henn

Key Takeaways

  • DeFi expert Tristan Frizza dives into Solana’s growth, highs, and user activity.
  • Frizza discusses ongoing efforts to address congestion, including fee adjustments and upcoming updates.
  • Solana’s vision for real-world DeFi includes scaling solutions on the horizon.

At a time when the cryptocurrency market is reaching new heights, Solana stands out. SOL’s price has risen, propelled by the excitement surrounding BTC spot ETFs and the anticipation of the Bitcoin halving event.

This offers us a unique opportunity to delve into the dynamics driving Solana’s ascent and its broader impact on the crypto landscape.

Solana Soars: Record Highs, Scaling Solutions, and the Road Ahead

CCN spoke with Tristan Frizza , CEO of Zeta Markets and DeFi enthusiast, to help shed light on these developments. With Solana topping Ethereum in trading volume and the DeFi sector flourishing, Frizza’s insights into wallet activity, DEX volume, and the technological prowess of Solana promise to unravel the nuances of this blockchain’s journey and its implications for scalability, efficiency, and the future of digital finance.

Frizza expressed confidence in Solana’s trajectory, saying it could surpass its all-time high of $260. He highlighted the blockchain’s growth, noting the surge in new wallet creations and the significant daily volume on Solana DEXes. Frizza pointed out Solana’s stability even during broader market downturns, attributing it to strong buyer demand. He believes the continuous influx of users and capital into Solana’s ecosystem will accelerate its climb to new highs.

He said:

“I think it’s a case of when not if at this stage. Looking at the recent runup, the appreciation in the price of Solana is nothing short of staggering and isn’t showing clear signs of slowing down. Even when the larger crypto market pulled back over the weekend, Solana held very steady despite the bloodshed which indicates very strong buyer demand.”

Frizza also discussed the recent congestion on the Solana blockchain, attributing the increased user activity to positive sentiment around Solana and the price action of the SOL coin. He highlighted that eagerly awaited token launches and the popularity of on-chain memecoin trading contributed significantly to this surge.

While Solana has managed to process a far greater number of transactions compared to other blockchains, even amidst this heightened activity, Frizza acknowledged that the congestion has led to a decline in the user experience, particularly affecting the reliability of DApp transactions.

Solana Stutters: Fixes for Network Slowdown on the Horizon

Discussing the congestion on Solana’s network with CCN, Frizza addressed concerns about vulnerabilities to malicious actors. He clarified that the current blockspace saturation acts more like a network DDoS, hindering genuine user transactions rather than being a direct vulnerability.

Highlighting potential threats, Frizza mentioned the risk to critical infrastructure, like oracles failing to submit price updates, which could affect DApps. He noted improvements, such as Pyth’s priority fee adjustment  and a move to a model that reduces congestion impact, as measures to mitigate these risks.

Frizza furthermore shared insights on optimizing order books  to enhance Solana’s network efficiency. He explained that many DApps are refining their smart contracts to lessen the load on Solana’s runtime.

Additionally, he said Solana’s potential writelock fees could improve both the network’s performance and user experience.

He stated:

“We’re also conscious that Solana core development is contemplating rolling out exponential writelock  fees, which essentially heavily penalize transactions that hog specific blockchain state – which would very well be the case for an exchange smart contract.”

When speaking about the expected improvements from Solana’s 1.18 release , focusing on local fee markets, Frizza highlighted that the update aims to bring more predictability and determinism to transaction fees, addressing inconsistencies in transaction prioritization due to Solana’s block scheduling algorithm.

By adjusting the way transactions are scheduled and executed, the update seeks to ensure that transactions with higher fees are more reliably included in blocks, thereby enhancing the network’s stability and scalability.

Solana Rollups and Scaling Solutions on the Horizon

Frizza touched also on the potential of roll-up solutions  for easing congestion on Solana, saying such solutions are still emerging within the ecosystem.

The current emphasis remains on enhancing Solana’s base layer for speed and efficiency. He pointed out several significant advancements. These included the QUIC network protocol for filtering packet spam, local fee markets that penalize frequent interactions with busy accounts, and the Firedancer client, which aims to increase throughput. All of these changes could reshape transaction and smart contract processing on Solana in terms of speed and cost.

Frizza went on to speak about the impact of initiatives like Firedancer on Solana’s future scalability, especially in DeFi. He believes such efforts will significantly enhance Solana’s capability. Frizza said it could allow it to process over one million transactions per second. This wouls surpass traditional payment networks and help Solana compete with major financial infrastructures.

He elaborated:

“Being able to process upwards of one million transactions per second far outcompetes existing large scale payments networks like Mastercard and Visa. It even begins to compete on a similar footing to financial infrastructure like the NASDAQ. The beauty of Solana, as Anatoly [Yakovenko, Solana co-founder] has articulated many times, is that due to its modern and parallelised architecture will allow the network to continue to scale and improve with improvements in modern hardware (Moore’s Law).”

Solana’s Vision – Beyond the Squeeze, Scaling for Real-World DeFi

Frizza highlighted the approach of Solana’s founders in addressing real-world issues at a scale comparable to web2 technologies. This, he suggested, distinguishes Solana within the competitive blockchain landscape.

Solana’s DeFi ecosystem, exemplified by platforms like Jupiter and Zeta, has, according to him, successfully managed millions of users and billions of transactions. Frizza emphasizes the importance of maintaining low gas fees, prioritizing block space efficiently, and combating spam to ensure long-term success and widespread adoption.

Finally, Frizza concluded with an advice to those navigating the Solana ecosystem amid its upcoming network enhancements. He suggests familiarizing with how priority fees work and exploring wallet settings to adjust them. This is because many DApps have integrated priority fee options to streamline user experience. For developers, especially those from other ecosystems, he recommends exploring Solana development. He claimed there were the exciting opportunities and novel designs possible in Solana’s rapidly evolving environment.

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