Jack Kubinec

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As Solana continues to cement itself as the most performant layer-1 blockchain by speed and cost, some crypto developers have gained an interest in using the technology underpinning Solana to launch new blockchains of their own.



To wit, there are around two dozen of these Solana Virtual Machine chains — counting layer-1s, layer-2s built on various other blockchains, and application-specific chains. But for simplicity’s sake, here are the layer-1s trying to out-Solana Solana:



<h2 class="wp-block-heading">Fogo</h2>



Fogo is a <a href="https://blockworks.co/news/solana-chain-running-pure-firedancer">forthcoming layer-1</a> that says it wants to push the SVM’s performance to its limits by only running the Firedancer validator client on a permissioned validator set with multi-local consensus.



If that sounds like word salad, just know that Fogo’s bet is that with a fork of Jump’s open-source Firedancer code and a couple tradeoffs around decentralization, Solana’s software can be even more performant.



The layer-1 raised $8 million at a $100 million valuation via the crypto crowdfunding platform Echo.



<h2 class="wp-block-heading">Pythnet</h2>



The popular Solana oracle Pyth runs an SVM app chain where Pyth operators who provide price data run validators, and the protocol aggregates prices.&nbsp;



Pythnet is the oldest on the list: Remarkably, Pyth shipped its SVM chain in August of 2022.



Since it’s a blockchain for data, this chain is less consumer-facing than others, but it’s an interesting decentralized way to stream price data — and the product has been live for nearly three years.&nbsp;



<h2 class="wp-block-heading">Solayer</h2>



Solayer initially fundraised and launched as a Solana restaking protocol, but after Jito entered the <a href="https://blockworks.co/news/jito-releases-code-for-solana-restaking-network">restaking race</a> — and as restaking became less buzzy, to put it bluntly — Solayer pivoted to launching its own layer-1 powered by its InfiniSVM.



Solayer’s documentation and leadership have claimed that it can achieve one million transactions per second at points, although some Solana developers <a href="https://x.com/trentdotsol/status/1917328407878328470">dispute</a> Solayer’s performance figures.



<h2 class="wp-block-heading">JupNet</h2>



The Solana DeFi giant Jupiter began teasing JupNet in January as an “omnichain network that aims to aggregate all of crypto in one single decentralized ledger.”



Little is yet known about JupNet, but Jupiter co-founder meow said in a blog <a href="https://meow.bio/jupnet.html">post</a> that its so-called Jupiter SVM has validators come to agreement on both internal Solana transactions and external transactions from other blockchains.



Jupiter has greatly expanded its business via acquisitions in recent months, but JupNet may be its most ambitious venture yet.



<h2 class="wp-block-heading">Cube</h2>



Cube Exchange is building an SVM L1, co-founder Bartosz Lipinski confirmed to me in a Telegram message.



Lipinski and co. <a href="https://www.youtube.com/watch?v=vo3nhdIra6M">forked the SVM</a> as part of a product they’ve <a href="https://blockworks.co/news/cube-exchange-crypto-mpc">described as</a> a hybrid centralized-decentralized exchange.



<h2 class="wp-block-heading">Thru</h2>



This one barely counts since Thru will be built on a new virtual machine called the ThruVM, but a <a href="https://blockworks.co/news/unto-vc-raise-thru-blockchain-l1">lot of the intrigue</a> around this brand new project comes from the fact that its co-founder, Liam Heeger, was previously a core engineer working on Solana’s Firedancer client.



So with the Firedancer credentials, Thru ekes out a spot on the list.



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Solana’s software underpins these layer-1s

Donovan Choy

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/0xresearch" target="_blank" rel="noreferrer noopener">subscribe</a>.



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We call this industry the “blockchain” industry. But people are fed up with too many chains.



If you’re launching a new chain in 2025, expect plenty of skepticism on Twitter. It’s what all the L1 blockchain raises in the last week had to confront.



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<li><a href="https://x.com/campnetworkxyz/status/1917227468458443116">Camp Network</a>, an intellectual property-focused L1, raised $30 million at a valuation of $400 million.</li>



<li><a href="https://blockworks.co/news/unto-vc-raise-thru-blockchain-l1">Unto</a>, an SVM-based L1, raised $14.4 million at a valuation of $140 million.</li>



<li><a href="https://x.com/0xMiden/status/1917202501910098321">Miden</a>, a zk rollup, raised $25 million (undisclosed valuation).</li>
</ul>



“Another chain, why?”



The easiest explanation is “greed.” It&#8217;s the fabled L1 premium!



Look at SUI’s price performance lately — what explains a $6.8 billion-market-cap token almost doubling in half a month?



We can all agree that it’s not based on fundamentals. Fees generated on Sui are at paltry lows compared to its highs last December.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeSyUs7NQcpRz3N6u0THgnme2_QFYBGECH_RZmZrs1yvW8AV4QEQ6I8LEJqXqmakL2Xj_Jw6ZE2Y4VadW_rO1MCH8hqBNbL2iM9_WgUqsOtUspa_JPvT6bRaLAs8Vh4pH5hTmMV-w?key=t1odmGaVblT5NpC6JTUK0g" alt=""/></figure>



Maybe I’m cherry-picking, and SUI is an anomaly. Maybe the L1 premium is dying, but it’s not quite dead yet.



Until then, the incentives to launch new L1s still exist.



The second (and charitable) explanation is simply that founders launching chains have competing visions of how a chain should be optimized.



How should the execution environment be designed? How is MEV captured? What data availability layer to use? Should there be a standardized oracle or gas token?



These things aren’t trivial. They determine where application developers go to build, and make or break the long-term success of a chain.



Expecting protocol builders to agree is like getting a hundred people to agree on a buffet’s menu.



It’s not all technical, either — there are social layer considerations. Take for example <a href="https://x.com/fede_intern/status/1846035499799978475">Rogue</a>, @fede_intern’s upcoming zk rollup that wants to have zero VCs, insider allocation, and a completely fair launch like Bitcoin did.



Builders have different opinions. They launch their own chains. It’s as simple as that. That’s economic freedom. We should celebrate it.



<h2 class="wp-block-heading">A solution?</h2>



Yet, there may be some consolation in the fact that L1 valuations are already compressing.



One of the highest profile L1 raises last year <a href="https://blockworks.co/news/evm-compatible-layer-1-blockchain-vc-interest">was Monad</a>. Valuations were undisclosed, but it was rumored to be at unicorn status <a href="https://pitchbook.com/news/articles/monad-labs-225m-paradigm-series-a-unicorn">according to</a> Pitchbook, so that puts Monad in the range of a billion.



Or consider <a href="https://blockworks.co/news/initia-mainnet-launch-appchain-l1">the Initia L1</a>, which was <a href="https://x.com/Xangle_official/status/1839198484152635649">valued</a> at $350 million last year.



These raises are nothing like what was seen in the last cycle.&nbsp;



Contrast this to when Avalanche reportedly <a href="https://coincheckup.com/blog/avalanche-developer-ava-labs-to-raise-350m-at-5-25b-valuation/?utm_source=chatgpt.com">raised</a> at a valuation of $5.25 billion in 2022. Or Flow, which <a href="https://www.coindesk.com/business/2021/09/22/dapper-labs-said-to-reach-76b-valuation-in-250m-funding-round">raised</a> at a valuation of $7.6 billion.



These numbers are dramatically down for L1s.



Public markets have responded to the distaste for more chains, and private markets are correcting overtime. The free market is <a href="https://x.com/MikeIppolito_/status/1919053350990934323">working</a>.



The data checks out when we zoom out. The below chart shows a downward trajectory for total funding raised for blockchains.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeFnfCgcQw9HlPAeqXDU-PXFk44jC1ULXaEmdYe3ZDQPoRBM6GbJv0aI7WX4j0t6FwdY8tKv38SdMv-9wdwXKIY1lqcrvrq9ObWIQiZEQ3HX2A8wdSCLYcxWijGXSUpDC7lt0Zg?key=t1odmGaVblT5NpC6JTUK0g" alt=""/></figure>



For those frustrated with “too many chains” who would like to see none at all, it’s probably not a satisfying answer.



Tied to that frustration is also an underlying desire to see more applications.



Fun fact: Consumer apps ironically received the lion’s share of venture funding vs. infrastructure back in 2013-2017 (Joel Monegro’s <a href="https://www.usv.com/writing/2016/08/fat-protocols/">Fat Protocol thesis</a> was written in 2016).&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdE_6rt6n3rOD8TrPoX_FvhrPeX-ygfofNuFVExWc0VmU5W77YyAXvI5QzKHCJ9_onfFw47g2x7rxK3jitq7jObQFm4cOnX4cnX5HSAr4pIvmfz9umAYam81ZpLU5n9uC9TYrsTIQ?key=t1odmGaVblT5NpC6JTUK0g" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://cheekyrolo.substack.com/p/web3-fundraising-in-focus-the-truth">Outlier Ventures</a></figcaption></figure>



That has, of course, flipped today. Is there some reason why application funding has fallen out of favor with VCs?



Take it from 1kx, which <a href="https://x.com/pet3rpan_/status/1917288546324697325">claims</a> to be one of the most active investors in consumer apps.



1kx partner Peter Pan told me: “Applications live and die by their traction and follow through — it’s an immediate feedback loop. Whereas with infrastructure, you can continue to find funding in a pre-launch state based off existing market comps, and push reality further and further out.”



Pudgy Penguins, Axie Infinity, Off The Grid, Rodeo and Layer3 are some examples of apps that have surmounted that feedback loop, Peter said.



Application revenues are also collectively outpacing the underlying protocol’s revenue (measured by REV) on most chains today.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc6FqIKnaLBnQV1HMDRg0dbAyerrBZ8vugrzGtTyJgQDFGU2xUoK1lX3zL5OAd8_KDCRzsr9mXkVrMJMqhVi9Quu-eEt6s2kY7cDD9j0UK5Pxq0GHemhb4SpsPj4Bp0ROzKKEC2?key=t1odmGaVblT5NpC6JTUK0g" alt=""/></figure>



If free markets worked to correct L1 overvaluations, maybe the reverse can happen for application funding, too.



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