What does the chairman of the Solana Foundation think of a16z's industry report on encryption, which says "a16z is biased towards EVM"?

Editor’s note: This article reveals the bias in the a16z report, overlooking Solana’s outstanding performance in the Money Laundering, Non-fungible Token, and Decentralized Finance markets. Despite Solana’s leading position in Non-fungible Token address and volume in the past year, the report fails to mention the significant innovations of DePIN, such as helium and Hivemapper. These groundbreaking projects demonstrate the real-world applications of the Decentralization network, especially the thriving development within the Solana ecosystem, which is full of anticipation for the future.

The following is the original content (for ease of reading comprehension, the original content has been reorganized):

I have read the “encryption industry status” report from a16z, and gained a lot! Although I mainly follow areas outside of EVM, I always cherish the opportunity to understand other innovations in the self-custody field. However, I noticed some implicit EVM bias in the report. Here are some of my observations:

Related reading: ‘a16z Annual Encryption Report’

The author sets the world framework as a dichotomy between EVM and non-EVM, creating a binary opposition that sees the ecosystem and developers who do not choose to develop within the EVM as ‘others’. For example, the visualization of active addresses is misleading. Solana has reached 100 million monthly active addresses, surpassing the base of 22 million. However, the chart almost equates the two. A more accurate approach would be to use a single bar graph, distinguishing the EVM and non-EVM bars with different colors (if necessary). In addition, the slide claims that ‘Base and Solana’ have the highest number of monthly active addresses, but attentive readers will notice that NEAR Protocol has 31 million active addresses, surpassing the base. Therefore, the title should be changed to ‘…Solana and NEAR are the most active’.

Now let’s discuss the selection of indicators. In our industry, we usually use active Address and Total Value Locked (TVL) as the standard benchmark for the ecosystem. However, I suggest measuring the activity, demand, and overall health of the ecosystem in a more meaningful way: Money Laundering. Money Laundering directly reflects the level of user participation in valuable economic activities, their willingness to make payments, and the ability of validators to profit.

With the introduction of the fee market, Solana now allows us to differentiate the economic value of different types of activities within the ecosystem and apply this approach to other ecosystems.

In the field of Money Laundering, Solana has made significant progress. Prior to December 2023, Solana’s monthly Money Laundering market share never exceeded 1.5%. Since April 2024, this proportion has consistently remained above 10% and peaked at 25% in July. When we consider MEV fees to measure ‘Real Economic Value’ (REV), Solana is narrowing the gap! The chart from blockworksres highlights the narrowing gap between Solana and Ethereum in terms of REV.

This is another EVM-centric perspective, involving the gaming sector. Using mgas/s as a metric to evaluate gaming infrastructure would exclude Solana and other non-EVM networks, resulting in meaningless comparisons, allowing us to see only a partial picture of the blockchain gaming ecosystem.

Another example related to Decentralized Finance, TVL is not sufficient as a metric for comparing Decentralized Finance activities, especially in key categories such as DEX, Derivatives, and bridge, where volume has more correlation. Although the report emphasizes overall DEX volume, it only provides protocol breakdown based on TVL, ignoring key aspects of Liquidity activities.

TVL tends to favor ecosystems with a large asset base but limited Liquidity, such as the Ethereum network. Although Solana’s TVL accounts for only 10% of Ethereum’s, its monthly DEX volume in 2024 fluctuates between 50% and occasionally surpasses Ethereum’s Fluctuation. In order to accurately reflect on-chain economic activity, it is necessary to follow the economic value of transactions, not just the held value. In this context, ecosystems with higher capital efficiency and superior on-chain performance stand out.

In comparable metrics across ecosystems, the report still mainly follows Ethereum and EVM L2. It sees the implementation of EIP-4844 as an important milestone in dropping industry costs. However, it is worth noting that since its launch in March 2020, Solana’s Transaction Cost has also remained at a lower level. In addition, in terms of transaction affordability, Solana’s median fees have always been lower and more stable than Base.

Despite ranking first in Non-fungible Token Address count, second in volume, and fourth in unique collectibles according to data from nftpulse.org in the past year, Solana is once again excluded from this Non-fungible Token comparison.

The presentation mentioned that low Transaction Cost drives new consumer behaviors, which can be well illustrated by the example of drip haus. Since March 2023, the platform has minted a total of 182 million Non-fungible Tokens, with a total cost of only 1600 SOL (calculated at a price of 150 USD per SOL, each Non-fungible Token only costs 0.001 USD), as pointed out by ledger top.

The lack of DePIN is very obvious, helium is completely changing the cellular network and currently has over 1 million active hotspots in 182 countries. Hivemapper uses the Decentralization network to draw global maps and has recorded over 7.5 million kilometers of street data in more than 50 countries. Rendernetwork provides Decentralization GPU rendering services, providing critical computing power for industries such as games and artificial intelligence. This is an upgraded version of SETI@home that demonstrates practical application value.

More importantly, most of these innovations occur in Solana rather than the EVM ecosystem. Is this the reason why DePIN is not mentioned in the report at all?

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