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US hedge fund recognizes Solana as the “Mac OS” of blockchains
In a new report, US hedge fund Pantera Capital has posited Solana as the “Mac OS” of blockchains, paralleling its development strategy and potential impact to that of Apple’s renowned operating system. Written by Franklin Bi, Cosmo Jiang and Eric Wallach, the relationship delves into the structural dynamics and strategic positioning of blockchains within the technology sector.
The report begins by answering a common question about the future landscape of blockchain technology: “How many blockchains need to exist?” Rather than focus on the number, the Pantera team suggests a different perspective: “What is the minimum number of blockchains needed to reach the full potential of the technology?” This approach aims to understand the essential characteristics that will allow some blockchains to dominate the market.
The analogy with historical technological oligopolies is strong. “Historically, developer-facing technologies converge around a small number of dominant players – typically oligopolies of two or three, each with a distinct approach that caters to different developer preferences.” It draws on examples from the evolution of operating systems, game 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 contender in the blockchain space, similar to Apple during the rise of personal computing. “This shift 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, monolithic architecture could give it a similar approach . competitive advantage.
The report delves into several benefits of the SOL architecture. First, Solana’s cohesive blockchain design avoids the complexities of connecting multiple chains, simplifying both development and user interaction.
By controlling the entire stack, the project can iterate and deploy updates quickly, a crucial factor in the fast-paced blockchain environment. Third, reduced dependence on external components and a simplified architecture reduce potential points of failure, improving the overall stability and security of the platform.
The authors also highlight specific applications that showcase Solana’s capabilities and its impact on both developers and end users. DRiP, a platform for distributing free collectibles, exemplifies how Solana high performance and low transaction costs facilitate massive, cost-effective distributions of NFTs.
Similarly, Hivemapper leverages Solana’s efficiency to process large volumes of geographic data collected by drones and dashcams, providing real-time decentralized mapping solutions that could challenge established services like Google Maps.
The report also highlights blockchain growth metrics: “Solana is unique active addresses they have skyrocketed […] demonstrating the platform’s incredible growth in user activity,” further supported by data illustrating an increase in transaction fees and decentralized trading volumes, indicating robust and growing demand for SOL’s offerings.
Concluding their analysis, the Pantera team expresses strong confidence in Solana’s future trajectory. “As more developers recognize the benefits of building on Solana, we can expect to see an increasing number of innovative projects capitalizing on its high-performance blockchain,” they predict. This sentiment is strengthened by a robust developer ecosystem and vibrant community, considered critical to the ability to outperform the competition and achieve sustained growth and relevance.
At the time of writing, SOL was trading at $123.90.
Featured image from Bitget, chart from TradingView.com