March 13, 2024

Part 1: The Next Generation of Blockchains

Justin Strubel
Share this post:

The Solana Renaissance

Just over a year ago, in late 2022, many were worried about the health of the Solana ecosystem following the collapse of FTX in November and all of the ramifications that event would bring to Solana. Not only was Sam Bankman Fried one of the main champions of Solana, but both FTX the exchange and FTX Ventures were very intertwined in the ecosystem. FTX Ventures was on the cap table of many of the early Solana projects, and these projects were known for their predatory token economics which launched with a low circulating supply of tokens and a high valuation, many of which struggled to achieve any meaningful price discovery. The collapse of FTX sent shock waves through the whole market, but the Solana ecosystem in particular took the brunt of that, and many began to question the longevity of the chain.

Back in 2021, Solana’s native token, SOL, was a top performer. During that time, Ethereum gas fees began to spike as the price of ETH skyrocketed and block space on Ethereum was in high demand. This dynamic began to price users out over time, as the fee to make a simple trade on a DEX rose to $20, $50, sometimes even $100 or more. The “alternative Layer 1” trade began to really catch momentum as the industry looked for alternatives to transacting on Ethereum, and Ethereum’s scaling roadmap via Layer 2 chains was far from coming to fruition. This narrative, coupled with the immense backing of one of the industry’s strongest voices at the time (FTX’s Sam Bankman Fried), led to very strong price action to the upside for SOL.

Fast forward to early 2023 post-FTX, sentiment was at an all-time low for Solana, the chain had been experiencing issues with downtime, and uncertainty about Solana’s future was ringing throughout the entire industry. For those paying attention, there were very important upgrades happening in the background in late 2022 that would help Solana to overcome some of the technical challenges it faced. For example, to address the downtime issues, one upgrade brought local fee markets to Solana, meaning if an NFT mint was happening and spamming the network, it would not affect a different part of the chain like a decentralized exchange trying to process swaps. It essentially isolates each activity so that one specific activity does not affect the rest of the chain. More details on the upgrades can be found here.

The Solana community continued to build despite the depressed sentiment, and SOL bottomed at roughly $8 in late 2022. Following that, SOL price ranged from $10 to $30 for almost a year, until fall of 2023 where it broke out of that range in a big way.

SOL price chart (2020-2023)  - source : TradingView

In a period of less than three months, the price of SOL went from $20 to roughly $125 at the local top. This explosion in price turned many heads and got people to pay attention to the Solana ecosystem again. Decentralized exchange (DEX) volume and NFT volume subsequently skyrocketed, surpassing Ethereum volume for periods of time in December 2023. 

Solana and Ethereum DEX volume (snapshot 12/27/23) - source : DeFi Llama

Furthermore, the new wave of ecosystem projects have begun to launch their tokens. Jito, a Solana liquid staking protocol that also runs a validator client that reduces some of the friction caused by MEV on Solana, recently launched its governance token, JTO. This event marked a symbolic “passing of the torch” from the old Solana to the new and further fueled capital flight from other ecosystems to Solana.

The future of the Solana ecosystem looks much brighter than it did just a short year ago. Similar to how Ethereum went through hiccups during 2018 after the ICO bubble collapse and went on to foster the birth of Decentralized Finance and NFTs, Solana could prove to emerge from the same growing pains stronger than ever. With continued upgrades such as Firedancer set to come over the next year or so, and with continued momentum in DeFi and NFTs and other newer sectors such as DePIN, Solana is set to continue its trajectory of explosive growth.

Fast & Cheap Competitors

The last few years, the industry has seen an acceleration in new blockchains launching to address the scaling issues we face today. In order to usher in the next wave of adoption, we need fully functioning highly performant blockchain ecosystems to accommodate millions (and hopefully someday billions) of users. Throughout 2018-2022 we saw lots of EVM-compatible chains launch, as well as a few non-EVM ones. Chains such as Avalanche, Fantom, and Polygon experienced an impressive growth in usage, and non-EVM ecosystems such as Solana, Cosmos, and Polkadot also gained traction. It has become fairly clear that there is adequate demand for other execution environments, so teams began innovating and building the next generation of blockchains.

Move-based Blockchains

Born from the now defunct Diem project by Meta (formerly called “Libra”), Aptos and Sui are both high performance blockchains based on the Move programming language, which is derived from Rust. Aptos launched in Q4 2022, and Sui launched in Q2 of 2023. Both were seen as potential “Solana killers”, similar to how chains in previous years have been described as “Ethereum killers”, due to Aptos’s and Sui’s similar goal of being a high throughput, low cost blockchain. However, as seen below, Aptos and Sui have a lot of catching up to do in terms of users. 

Daily Active Addresses - source :

Networks that Leverage the Cosmos SDK


Partially fueled by the success of chains such as Solana that have achieved some level of higher throughput in practice, there are now many chains experimenting with different designs to accommodate specific applications that require higher throughput. Injective is one such blockchain that optimizes for speed and throughput, built with the Cosmos SDK and focused on execution. The chain has seen a lot of adoption recently and its native token, INJ, was a top performer in 2023. 

INJ price 2020-2023 - source : TradingView

INJ has broken above its all-time high from 2021, being one of the first tokens to do so. The recent move in tokens such as SOL and INJ has renewed interest in alternative blockchains, and momentum has picked up. Lots of projects and tokens in the Injective ecosystem are expected to launch in Q1 2024 (backed by a $150M Injective ecosystem fund), which should continue to fuel momentum and further drive adoption of the chain. Additionally, Injective just underwent its major network upgrade, “Volan”, which includes many enhancements such as introducing a Real-world Asset (RWA) module and improvements in interoperability, among others. Injective has a lot of momentum, and the move in price is potentially foreshadowing an explosion in growth for the ecosystem.



Perhaps one of the most hyped ecosystems of all to end 2023 was Sei, a general purpose L1 whose main focus is optimizing the trading of all kinds of digital assets. Sei was built for all types of assets, as they see trading to be more than just DeFi, with many other use cases such as gaming, NFTs, and social applications. They claim to have the fastest time to finality at 380ms, and one of their main selling points (and a huge theme going into 2024) is their parallelized processing.

Source : 

Similar to Injective and other new generation blockchains, it is still very early days. However, dapps and users are likely to move to where their cost, speed, and security tradeoff needs are met. If speed and cost are what they’re optimizing for, Sei could be a great option. 

The Cosmos ecosystem as a whole has seen a revival in 2023, as the focus has shifted to Celestia and newer chains. As interoperability improves, and as projects like Dymension launch, the application-specific rollup, aka “RollApp” ecosystem is likely to grow substantially, similar to how Ethereum and its rollups have. We will dive into more detail on Celestia, Dymension, and the RollApp ecosystem in Part 2, but the Cosmos ecosystem has really started to gain traction toward the end of 2023, and the whole ecosystem, including Injective and Sei, will be one to watch in 2024.

Monolithic vs Modular

Most of what was discussed here was monolithic in nature, as these ecosystems largely handle execution, settlement, and data availability all on their own. Ethereum’s architecture has evolved to more of a modular approach, with execution being outsourced to rollups. There is a similar system being built on the Cosmos side with Celestia, Dymension, and the system of RollApps. Part 2 will feature the modular ecosystems and their recent progress, as well as a look ahead to what to expect in 2024 with those ecosystems. We will wrap up with some thoughts on how the space will evolve and how these blockchain systems could communicate in the future, paving the way for the mass adoption we have all been anticipating for years. We are closer than we have ever been, and we are extremely excited for the next few years to realize that vision.