Solana Introduces Update for Enhanced User Privacy
Solana, a layer 1 proof-of-stake blockchain, has released version 1.16, which includes a feature called “Confidential Transfers” that enhances user privacy. This update introduces encrypted Solana Program Library (SPL) token transactions, ensuring confidentiality without compromising anonymity.
The adoption of version 1.16 by Solana’s network of validators has reached a majority after ten months of development and a security audit by Halborn, a blockchain security firm.
Solana Labs Rolls Out Privacy-Enhancing Update
According to an announcement by Solana’s infrastructure provider Helius, the update has undergone rigorous testing since June 7, 2023, running on testnet. Volunteer and canary nodes have played a crucial role in identifying and resolving issues during the testing phase. Canary nodes have also been deployed on mainnet-beta to monitor the stability of v1.16 under real-world conditions.
Solana employs a feature gate system to prevent consensus-breaking changes and ensure validators running older versions do not fork off the canonical chain. Consensus-breaking changes now require a Solana Improvement Document (SIMD) and greater transparency through documentation.
Confidential Transfers use zero-knowledge proofs to encrypt balances and transaction amounts of SPL tokens, prioritizing user privacy. Solana Labs plans to adopt a more agile release cycle with smaller releases approximately every three months.
Room For Growth
According to a report by Nansen, Solana has experienced significant growth in its Total Value Locked (TVL) 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.
Solana has implemented innovative solutions such as state compression and isolated fee markets to address issues within its tech stack. State compression has reduced the cost of NFT minting on Solana more than 2,000 times. For example, minting 1 million NFTs on Solana would cost approximately $113, compared to $33.6 million on Ethereum and $32,800 on Polygon.
The liquid staking landscape on Solana is also growing rapidly, with platforms like Marinade Finance, Lido Finance, and Jito leading the way. However, the current amount of staked SOL in Solana’s liquid staking protocols accounts for less than 3% of the total staked SOL, indicating room for expansion.
There are concerns about the uncertainty surrounding FTX/Alameda’s SOL holdings, as FTX holds a significant amount of SOL. Monitoring its impact closely is essential for Solana’s growth trajectory.
Hot Take: SOL Continues to Gain Momentum
The SOL token continues to experience substantial gains across all timeframes, currently trading at $23.68 with a more than 4% increase in the past 24 hours.
Featured image from Shutterstock, chart from TradingView.com
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