Interpretation of Solana’s latest technology roadmap: Anchoring the “Internet capital market” and building an on-chain Wall Street

The Internet capital market, as the name suggests, is to create a borderless, all-weather financial market where various assets - such as stocks, bonds, currencies, and real-world assets (RWA) - are tokenized and traded seamlessly on the chain.

This thing is equivalent to a general program, so in order to achieve this general program, it is necessary to do task decomposition.

The Solana roadmap this time is, more precisely, the roadmap of the technical department, which wants to help the concept of "Internet capital market" land, so you can't see the efforts of Solana's business and compliance departments.

You can think of it as the technical roadmap of Solana's technical department.

Image source: https://www.anza.xyz/blog/the-internet-capital-markets-roadmap

And Solana's technical department is not only the core developer of Solana Labs, but also has several important roles, such as:

1. Anza, the big brother level. This is a low-key Solana development company founded by former Solana Labs team members. I personally think its role is similar to that of ConsenSys/Ethereum, or Blockstream/Bitcoin.
2. Jito, the second brother. This is the Solana version of Lido, but it has more power than Lido because Jito also controls the life and death of almost all Solana MEVs.
3. Multicoin, this is at least the third brother. Although it belongs to capital, it holds many SOL and SOL ecological projects, so it definitely has a say in the field of technology.
4. DoubleZero, this is the younger brother level, focusing on speeding up the Internet.
5. Drift, also a younger brother level, it is a perpetual contract, but it also participates in the development of some functions of Solana.

The official Solana Labs, plus the three big kings and two small warriors, formed the six-member team of this roadmap, which is actually equivalent to the real Solana Technical Reform Committee.

Next, let's take a look at what efforts the Solana technical department needs to make in order to realize the [Internet Capital Market]?

The Internet Capital Market is a slogan because it doesn't say what everyone should do.

So, in order to make it easier for developers to "work together", the technical department translated the entire slogan into technical language, which is "Application-Controlled Execution (ACE)".

Here is where the difficulty starts. What exactly is this difficult-to-pronounce Application Controlled Execution (ACE)?

That is, Solana believes that an Internet financial market (especially comparable to Web2) must meet one condition, that is, financial applications must [millisecond-level control over their own transaction ordering].

Note: both ordering rights, millisecond-level control, and control rights are required.

Therefore, in order to achieve Application Control Execution (ACE), Solana's technology still lacks a lot of things. What exactly is missing, please see the roadmap:

Short-term goal (January-March): Be more friendly to the order book, suppress malicious MEV clamps, and reduce transaction delays.

Medium-term goal (March-September): Reduce latency through dedicated fiber optic networks; make major changes to the Solana consensus algorithm to greatly shorten the finalization time of transactions; reduce transaction delays. Long-term goal (9-30 months): Let the Solana consensus algorithm change from a single leader to multiple leaders to increase the system's resistance to extreme risks and censorship, and give applications greater sorting rights.

Next, let's talk about how to achieve short-term, medium-term, and long-term goals respectively?

Short-term goal (January-March): Be more friendly to the order book, suppress malicious MEV clamps, and reduce transaction delays.

The responsible persons are Jito and Anza.

First, the order book. Solana really loves the order book. I remember that in the SBF era, Solana wanted to promote the order book model DEX. Today, Jito and Drift are developing a tool called BAM, which is a new way to build transactions. The specific details are not expanded here.

Image source: bam.dev

Here, but you only need to know that in this way, the order book can be played more smoothly without relying on the traditional DEX model similar to Uniswap, and in the future, an order book comparable to CEX can be made. After all, if a chain does not have an order book, how can it be an Internet financial market?

Suppressing malicious MEV clamps is also a routine for Jito. Of course, this is also part of further strengthening Jito's power. All blocks must go through Jito and the entire BAM to be built, which is equivalent to the cabinet ministers of the Ming Dynasty.

Anza contributed a new TPU client to reduce the delay in sending transactions.

Medium-term goal (March-September): Reduce latency through dedicated fiber networks; make major changes to the Solana consensus algorithm to greatly shorten the time for transaction finalization; reduce transaction latency.

The responsible persons are: DoubleZero and Anza.

Because everyone knows that the main cause of Solana node jams is insufficient bandwidth. The younger project just mentioned, DoubleZero, hopes to increase the bandwidth available to ordinary Solana validators by multiple times by building a dedicated fiber network.

Of course, it is not only DoubleZero that is focusing on dealing with bandwidth issues, but also protocols like Optimum. It's just that what DoubleZero sells is essentially hardware, and what Optimum sells is essentially a better algorithm.

In addition, we should focus on the issue of Solana consensus algorithm, but the space is limited, so let's make it short.

Solana consensus algorithm, as we all know, is Proof of History (PoH) + Tower BFT.

The essence of this consensus is to first create an internal clock through Proof of History, and then select a leader each time according to the time. The leader is responsible for producing blocks, and other nodes are only responsible for voting, which is the so-called single leadership system.

The advantage of a single leader is that it is fast, and the disadvantage is that it is single, so Solana has also been down several times.

I believe that everyone who has worked in a company knows the difference in efficiency between a leader being one person and a leader being a group of people, so there is no need to elaborate here.

Of course, Solana itself believes that the main contradiction of the single leadership system is that the final confirmation time is not fast enough.

Solana now takes 12.8 seconds to finalize, while Solana's competitors, such as Sui, only take 0.5 seconds.

The so-called finalization has been mentioned many times before. Before the finalization, the blockchain *theoretically* has the possibility of rollback; and after the finalization, even the gods cannot change it, which means that the blockchain will never be tampered with.

A more intuitive example is that when you top up an exchange, you have to wait for several blocks to be credited to your account, which is the precaution taken by the exchange to prevent the blockchain from rolling back.

Although in 99.9% of cases, the blockchain will never roll over due to insufficient finalization time, there have indeed been such cases in history, such as when someone used ETC or BTC fork coins to cheat exchanges.

But, remember, Solana wants to be the Internet capital market - the financial market has very high requirements for finality, and it can't tolerate any sand in its eyes, so 12.8 seconds is not enough, so Solana is determined to develop a new consensus mechanism.

You know, the consensus mechanism is the foundation of a blockchain and its soul. And the task of development was given to Anza, so now you know why I call Anza the big brother of Solana's technology.

Although Anza is not a regular, he is definitely a regular.

Image source: danbaileyphoto

Solana's new consensus mechanism is called Alpenglow, which means "The Glory of the Alps", symbolizing the Swiss origin of the protocol.

This Alpine consensus mechanism, in a nutshell, has three features:

(1) Final confirmation is reduced to 150 milliseconds (3x faster than competitors)

(2) No more voting (off-chain signature, saving money for small nodes)

(3) More elegant (eliminating technical debt, preparing for multiple leaders)

Under the new Alpine consensus, there is still a single leader, but:

1. Propagation layer: Relay nodes are introduced to help forward transactions, so the delay is greatly reduced.

2. Voting layer: Although the fault tolerance is reduced from 33% to 20%, the security is slightly sacrificed, but the time to reach final confirmation is greatly shortened. In addition, cryptography is used to ensure that voting is turned off-chain.

Sketch of the new propagation layer. Image source: Helius

Sketch of the new voting layer. Image source: Helius  
In this way, it is expected that the final confirmation time will be shortened to 150 milliseconds. 
 
Finally, the long-term goal (9-30 months) is to change the Solana consensus algorithm from a single leader to multiple leaders to increase the system's resistance to extreme risks and censorship, and give applications greater sorting rights.