Solana Enhances Privacy Offerings As SOL’s Uptrend Persists With 4% Gains
October 06 2023 - 7:00PM
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Solana (SOL), a layer 1 proof-of-stake blockchain, has introduced
version 1.16, which enhances user privacy through “Confidential
Transfers.” This update includes encrypted Solana Program Library
(SPL) token transactions, ensuring confidentiality rather than
anonymity. The adoption of version 1.16 by Solana’s network
of validators has reached a majority after ten months of
development and an audit by Halborn, a blockchain security firm.
Solana Labs Rolls Out Privacy-Enhancing Update According to the
announcement made by Solana’s infrastructure provider Helius, The
update has undergone rigorous testing, with v1.16 running on
testnet since June 7, 2023. Volunteer and canary nodes have
reportedly played a crucial role in identifying and resolving
issues during the testing phase. Solana Labs has also deployed
canary nodes on mainnet-beta to monitor the stability of v1.16
under real-world conditions. Related Reading: Chainlink To Go
“Parabolic” After Breaking 28-Month Downtrend? Solana employs a
feature gate system to prevent consensus-breaking changes, ensuring
that validators running older versions do not fork off the
canonical chain. What’s more, Consensus-breaking changes now
require a Solana Improvement Document (SIMD) and greater
transparency through documentation. Confidential Transfers,
introduced by Token2022, utilize zero-knowledge proofs to encrypt
balances and transaction amounts of SPL tokens, prioritizing
user privacy. Looking ahead, Solana Labs plans to adopt a
more agile release cycle, targeting smaller releases approximately
every three months. Room For Growth According to a Nansen
report, Solana has witnessed a significant surge in its Total Value
Locked (TVL) throughout this year, nearly doubling since the
beginning of 2023, and currently boasting a TVL of 30.95 million
SOL. Monthly transactions on the Solana network have remained
relatively stable, with an increase in vote transactions,
encompassing both vote and non-vote transactions. Furthermore,
Nansen highlights that Solana has implemented innovative solutions
such as state compression and isolated fee markets to address
prominent issues within its tech stack. One notable solution, state
compression, has substantially reduced the cost of non-fungible
token (NFT) minting on Solana more than 2,000 times.
State Compression Unleashes Affordable NFT Minting For
instance, the cost of minting 1 million NFTs before the
introduction of state compression would have amounted to
approximately $253,000. In contrast, with state compression
enabled, the cost is significantly reduced to just $113. In
comparison, minting a similar collection size on Ethereum would
cost approximately $33.6 million, and on Polygon, it would amount
to around $32,800. Furthermore, the liquid staking landscape on
Solana is experiencing rapid growth, with leading platforms like
Marinade Finance, Lido Finance, and Jito taking the
forefront. Related Reading: Ripple Vs. SEC: Crypto CEO
Predicts SEC Will Drop Charges Against Executives However, despite
this growth, the current amount of staked SOL in Solana’s liquid
staking protocols accounts for less than 3% of the total staked
SOL, indicating substantial room for expansion. It is worth noting
that the report by Nansen raises concerns about the uncertainty
surrounding FTX/Alameda’s SOL holdings, as FTX holds over 71.8
million SOL, representing approximately 17% of the circulating
supply and 13% of the total supply. While this situation may
present temporary risks to Solana’s growth trajectory, it is
essential to monitor its impact closely. On the other hand, the
native token of the protocol, SOL, continues to exhibit substantial
gains across all timeframes. The token is trading at $23.68,
reflecting an increase of over 4% in the past 24 hours. Featured
image from Shutterstock, chart from TradingView.com
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