“Wisdom” AMM has achieved continuous liquidity for event betting. The protocol supports various on-chain betting markets for games, sports betting, cryptocurrencies, and other activity markets.
With the emergence of several billion-dollar DeFi protocols on Solana, now is the perfect time to build infrastructure and tools for these DeFi protocols.
Alpha recommendations for builders:
OEV: A subset of MEV, Oracle Extractable Value (OEV) refers to the state inconsistency that applications rely on Oracle updates for arbitrageurs or liquidators to exploit. As multicoin described, there is an opportunity for applications to capture OEV.
DeFi Infrastructure as a Service: Several protocols like Aave/Compound have been forked multiple times; Solana has also been forked, with the protocol forking Solana Lab’s reference implementation. There are significant costs in development, auditing, and maintenance. A standardized and sustainable development company can be established to provide “plug-and-play DeFi protocols” – it can also be seen as the “Metaplex of DeFi”. Rari Capital (now defunct) had a similar vision and built treasury infrastructure. One of the achievements was building equivalent infrastructure for Solana like ERC-4626 and leveraging Solana’s yield farming by providing services to DeFi projects.
Risk Management Organization: This can be built as a risk DAO or advisory committee to conduct research and risk analysis for DeFi protocols. These entities can release publicly available “risk analysis dashboards” with key metrics of the Solana ecosystem and provide paid research, risk assessment frameworks, and risk rating services to DeFi projects.
Bribe Aggregator or Market: In the EVM, Curve Finance allows its token holders to decide how much token incentive to allocate to each pool they hold. This creates a dynamic where projects “bribe” token holders to vote for pools that include their tokens. Votium Protocol aggregates these bribes and automatically represents the voting power of token holders to maximize the incentives received. Having an aggregator makes it more convenient to coordinate activities between bribers and voters and leads to greater market efficiency. On Solana, this can be applied to:
– LST by giving governance rights directly to validators
– Jupiter LFG Launchpad, where projects can bribe their voters and provide token allocations as rewards.
Privacy in DeFi: Privacy has found market fit in unexpected places in the crypto space, such as airdrops. For example, centralized exchanges are also used by whales to anonymize their trades, hence protocols like Elusiv have gained significant usage.
Meme coins are financial-cultural. Their value comes purely from attention and social consensus. We may be in a meme coin supercycle with Solana as the front end.
Additionally, DeFi applications will become more social. We have already seen some early trends:
– Purchasing through Telegram bots, such as Bonkbot with daily trading volume of $250 million!
– Projects like Zeta or Kamino with public leaderboards.
– The next front end for DEXes is likely to be a live streaming platform where creators and viewers can bet together, a social source with integrated trading, or other networked forms.
UI Layer Composability: Telegram bots make DEX UI composable. Previously, people would consume information from somewhere on the internet (X, Reddit, news, Telegram groups, etc.) and then navigate to a separate UI for trading (e.g., Drift, Binance, Coinbase). Telegram bots bring trading onto Telegram, where people are already congregating, socializing, and exchanging information.
Alpha recommendations for builders:
– Continuous prediction markets supported by meme coins: Existing prediction markets like Polymarket are binary and discrete, hence the upside is limited. Most people want continuous and unlimited upside. A native crypto prediction market can actually be meme coins (e.g., $BIDEN, $TRUMP). People can create a niche platform dedicated to trading meme coins (e.g., a political platform that allows trading of all political meme coins and predicts who will win). MetaDAO is an example of a vertical and continuous prediction market, but limited to governance.
Meme coin front ends: The user experience for trading meme coins is still not optimal – people need to discover meme coins, check all the details on Birdeye or DEXscreener, and then trade on Jupiter, and for many early meme coins, wallets don’t even have basic support. People can simply create a website like Birdeye but specifically for meme coins, more social, where big V bloggers can hype and copy trades from each other. Pump.fun is another interesting platform where people can join meme coins very early (up to $69,000 market cap). Another adjacent idea worth exploring is a DEX specifically designed for meme coins (currently Raydium, but the experience is not optimal).
Vertical DEXes: More experimentation in designing DEXes targeting specific use cases (like meme coins or LST). For example, Sanctum’s Infinity is essentially an automated market maker for LST.
Platforms enable the creation of new products. Amazon is a platform, and a brand on Amazon is a product. The launch of Uniswap v4 hooks marks the first platform moment in DeFi, allowing builders to launch their products on these protocols. Not just Uniswap, all flagship DeFi protocols like Jupiter are starting to build ecosystems on top of their protocols.
Project Serum (now Openbook) serves as a platform showcasing ecosystem construction with over 30 projects being developed on it. The platformization of Solana DeFi projects is still in its early stages but is expected to increase significantly in the coming months. For builders, identifying such protocols, strategizing positioning, and becoming early participants in the ecosystem is advantageous.
Alpha recommendations for builders:
– Jupiter: Initially an aggregator, Jupiter is rapidly evolving into an ecosystem. Adrastea is a good example, providing leverage benefits on JLP.
– Drift: The largest sustainable DEX on Solana. Circuit trade provides market-making treasury functionality for the Drift DEX and can develop similar products around DLP.
– Phoenix: Although still in its early stages, Phoenix has the potential to develop into a comprehensive ecosystem as an order book. For example, Root Exchange built on Phoenix offers enhanced limit orders.
Structured products and strategy treasuries provide clear opportunities for developing more products on these platforms. While transitioning to a platform is a long-term effort, it greatly benefits value accrual (which is why Layer 1/Layer 2 solutions have significantly higher value than applications) and shifts the responsibility for revenue generation to the applications built on top. This also benefits token holders of platform protocols.
Attention is scarce in the crypto space, and aggregators command it. Whether it’s DEX aggregators (like Jupiter/1inch), bridge aggregators (like Jumper/Bungee), or chain aggregators (like Polygon), they have become new and attractive narratives.
The principle is simple: aggregators control demand and capture user attention. Although they currently haven’t accumulated much value (most are not charging fees), it is likely that the abstract underlying protocols will soon provide them with fees or revenue sharing to gain priority or maintain uniqueness (similar to brands paying Amazon for advertising).
Interfaces add additional value on top of the protocols they facilitate. Through additional tools like UniswapX or Jupiter’s DCA tool, interfaces can win the battle for customer acquisition and capture value.
In fact, Solana has one of the most powerful aggregators, with Jupiter leading the way and other aggregators like Flexlend aggregating yield.
Alpha recommendations for builders:
Aggregation opportunities include:
– Yield aggregators
– Perpetual aggregators
– Meme coin aggregators
– DeFi aggregators like Instadapp for leverage, refinancing, and position migration
While there seems to be a blurry line between “platforms” and “aggregators,” the difference is that aggregators are frontends, while platforms are the foundation on which products are built. A protocol can be both, and Jupiter is an example.
Now is the time to build new protocols on Solana. While the EVM can serve as inspiration, protocols should focus on core design innovation, participate in research discussions, and build true OPOS like Sanctum or Phoenix. We will make Solana DeFi different from Ethereum, drawing inspiration from TradFi and exploring what can be built on-chain with high capital turnover and speculation.
Infrastructure has finally reached a point where it can handle large-scale activity. Many DeFi projects that previously failed due to being too early are now becoming viable again. It is exciting to see how this will develop in the coming years.
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