TL;DR
A million transactions per second on a monolithic blockchain might sound like a stretch. But with the upcoming Firedancer client, Solana’s end goal of ‘synchronizing the world at the speed of light’ is getting a tad closer. If successful, this upgrade will not only reduce the downtime troubles that Solana suffered but also make consumer applications like on-chain social media within reach. Not to mention coin swaps without noticeable latency on your favorite Solana defi app.

Solana, like any other chain, has to choose their spot on the blockchain trilemma. That is the balance a chain has to pick between scalability, security, and decentralization. Ideally, a blockchain is super scalable, secure, and decentralized. In practice, you can’t have it all. For example, Web2 – the old-fashioned internet – doesn’t care about decentralization. A centralized server and database system can scale to millions of users without problems. In blockchain terms: they only need to keep one node synchronized: easy peasy.

Web3 has taken on the challenge of replicating that scalability across distributed servers and decentralized databases. There are two main approaches to achieve this: a modular and a monolithic approach. Ethereum’s rollup approach, for example, scales by separating transaction execution from transaction settlement. Transactions are executed on Layer-2s. 

So, modularity means a division of labor. Solana, on the other hand, takes the monolithic approach: it doesn’t outsource but tries to take on more and more transactions per second on the base layer.

How does Solana pull it off? They are working on several optimizations. The biggest of which is a new validator client: Firedancer. Solana believes that a combination of design choices and hardware and software optimizations can achieve a 10x to 20x boost of transaction throughput. The current maximum throughput is 50,000 transactions per second. The upper limit of the Firedancer upgrade would bring a million transactions per second within reach. This is not pie in the sky. Jump Crypto already demoed these feats last year at Solana’s Breakpoint conference.

What Are Firedancer’s Improvements?

Firedancer, in development within Jump Crypto, revolves around validator client software. A validator is a special kind of full node that participates in consensus. According to the Solana website, there are currently 1800 validators online.

Being a Solana validator is not an easy task. A validator not only verifies transactions and updates that account state but also propagates and broadcasts transactions to validators across the network. The network is only as fast as you can propagate transactions. 

The first technical breakthrough of Firedancer is that it implements the QUIC transaction propagation protocol. QUIC replaced Solana’s earlier and plagued transaction propagation protocol. This suffered from downtime issues resulting from a lack of proper spam filtration.

A second breakthrough comes from new ways to load balance: splitting up the processing of transaction propagation across several CPU cores within one validator, for example. Without going into details – which, frankly, your author doesn’t grasp – Firedancer uses both hardware and software-based improvements to scale load balancing to the 1 million transactions-per-second mark. In the mentioned demo, Jump Crypto showed transactions coming through at 1.08 million per second, using just four CPU cores (impressive, as Solana validators are recommended to run 12 cores or more).

The Advantage of Having a Second Client 

There is another advantage besides pure volume. With Firedancer, Solana will be only the second chain after Ethereum with more than one client. Having a second set of code that can “run” the chain from scratch decreases the risk of a bug causing damage to the network. After all, it’s unlikely that the second client has the same bug.

New Possible Use Cases

Speed is nice, it’s cool. One… milliooonnn transactions… But what does it mean in terms of use cases? Well, two big ones come to mind.

• Faster DeFi: currently, making a coin swap on your typical dex takes many seconds. while centralized exchanges are ten times faster. With Firedancer, a trade could be executed in a few tenths of a second, finally making Solana defi competitive with centralized exchanges.
• New Application Possibilities: Web2 applications become feasible on chain via 1+ million transactions per second throughput enabled by Firedancer scaling. Think social media and gaming. These require high transaction throughput (and low costs). Chains like Ethereum will use Layer 2’s and apps on Layer 3’s. But this comes with its own risk of composability: stacking complexity on complexity can result in unforeseen errors.

Overview of the Solana Ecosystem

Let’s take a step back and look at the broad Solana ecosystem. How is it doing after the horrendous year of 2022? It’s no secret that Solana suffered a lot of price and image damage from the fall of FTX.  The chain also struggled with maintaining uptime, particularly in June 2022. Block times fell to one second between blocks on average. This is slow compared to Solana’s typical performance. Solana struggled with spam on the network – which Firedancer is supposed to solve – as mentioned.

But now that the dust has settled it looks like Solana is pulling trough ok. It has become clear that Solana doesn’t outright depend on FTX’s former CEO – whose name we don’t even wish to utter…

Some vital signs that Solana is looking good:

• Solana validators are distributed across more than 25 countries and 138 data centers.
• The price seems to have bottomed. Despite the bad news of Robinhood delisting SOL (among other projects deemed a security by the SEC in a lawsuit against Binance) SOL didn’t make a new low.
• Developer count is lower than in 2022 but not catastrophic. It’s still in the top 10.

Upcoming Technical Innovations

According to Solana Labs CEO Anatoly Yakovenko, Solana’s biggest challenge ahead is how to have multiple block producers operate at the same time. Should this be solved, it would let the network operate much faster.

Yakovenko also said he would also like to see the block production process become separated from the transaction execution process. This should let users of the Solana blockchain know their transaction has been processed more quickly.

Another major technical milestone was recently deployed: Jito-Solana. It is a validator client optimized for facilitating MEV. It creates more efficient MEV markets and is like Flashbots’ MEV Boost on Ethereum.

Conclusion

Jump Crypto isn’t done with Firedancer. They want to rewrite each validator component to scale it. Next on the list at some point will be the scaling of the consensus and execution layers. The upper transactions-per-second limit is unknown but immense.

If successful, Firedancer could unlock new markets for the Solana ecosystem that were previously not realistic to be built on blockchain. The combo of high throughput, composability, and low costs will make applications such as Social media and gaming possible.