Hey Edge readers,

With the Solana Breakpoint Conference starting today, we’re focusing on a pivotal development in the Solana ecosystem: Firedancer, a new validator client that promises to bring Solana’s performance and resilience to new heights. We’re also highlighting the top yield opportunities on Solana, new Exponential.fi updates, and the latest news from the DeFi world.

In today’s edition:

• Firedancer: Solana’s new validator client 🔥 💃

  Learn what Firedancer is and how it works.

• Top DeFi yields on Solana 🌟

  The top yield opportunities on Solana.

• We’re live on Base! 🔵

  Fund your account now and try out our new Base pools.

• Crypto rallies after Fed cut rates by 50bps 🗞️

  Solana Breakpoint updates, BlackRock calls BTC a ‘unique diversifier’, and more WBTC debates.

Stay sharp. 🫡

-The Exponential team

Firedancer: Solana’s new validator client

In blockchain networks like Solana and Ethereum, validators play a critical role in maintaining the network’s security and operations. They process transactions, create new blocks, and validate the accuracy of the blockchain. Without validators, decentralized networks couldn’t function. Each validator uses a specific software, known as a validator client, to perform these tasks.

Why is validator client diversity important?

Validator clients are the backbone of blockchain networks, transforming computers into validators. Put differently, a blockchain is a set of computers that run its validator software. Having multiple different validator clients is essential for a blockchain’s resilience. If all validators rely on the same client, the network becomes vulnerable to a single point of failure. Software, written by humans, is inherently prone to bugs. If one client has a critical bug, it could potentially compromise the entire blockchain.

By distributing validators across multiple clients, the risk is significantly mitigated. A bug or exploit in one client is less likely to affect others, ensuring the network remains operational. Validator client diversity is measured by:

1. The percentage of stake being run on each client.

2. The total number of clients available for a blockchain.

Currently, Solana has two main validator clients: the Solana Labs client and Jito Labs client, which is a fork of the original Solana Labs client. According to the October 2023 Validator Health Report published by the Solana Foundation, around 69% and 31% of stakes ran through the Solana Labs and Jito Labs clients, respectively.

While Jito has improved client diversity, it shares much of its underlying code with the Solana Labs client. This ultimately leaves the network exposed to common vulnerabilities. A truly diverse client ecosystem (e.g. Ethereum has many clients), with each client being independently developed, is the ideal solution. Firedancer, developed by Jump Crypto, is designed to change that by being an entirely independent client, written from scratch in the C programming language.

What is Firedancer?

Firedancer is a new, independently developed validator client for Solana, built by Jump Crypto. It offers a complete rewrite of Solana’s current validator client, focusing on performance, reliability, and redundancy, aiming to boost Solana’s network performance while reducing centralization risks.

With Firedancer, Jump Crypto is leveraging its expertise in high-frequency trading to build a validator client that can operate with ultra-low latency and high throughput—both critical requirements for scaling a blockchain network like Solana.

How does Firedancer work?

Firedancer is built using a modular architecture that breaks down complex tasks into smaller, independent processes called tiles. Each tile handles a specific job, such as verifying signatures or processing network traffic, allowing Firedancer to operate more efficiently than the existing Solana Labs client. This architecture also makes the system more resilient—issues in one tile have minimal impact on the overall validator, reducing the risk of network-wide failures.

Another key advantage is that Firedancer is written in C programming, which provides more direct control over hardware. This enables Firedancer to fully optimize performance by managing memory and resources more efficiently than other clients. It also allows the client to scale easily with hardware improvements, such as faster CPUs and network cards, ensuring Firedancer remains adaptable as technology evolves.

In testing, Firedancer has demonstrated the ability to process over 1 million transactions per second (TPS)—a significant leap from Solana’s current theoretical limit of 50,000 TPS. This showcases its ability to handle massive transaction volumes, further enhancing Solana’s scalability and network performance.

Final thoughts

Firedancer represents a significant step forward for Solana, addressing both network performance and security through increased validator client diversity. By introducing an entirely independent client, Solana reduces its reliance on the existing Solana Labs client and builds a more robust network capable of handling high demand while minimizing the risk of downtime from software bugs.

Top DeFi yields on Solana

With Solana in the spotlight, we’re highlighting some of the top yield opportunities in the Solana ecosystem:

1. Vaultka SOL - 12% APY

2. Vaultka USDC - 11% APY

3. Kamino (Orca) PYUSD-USDC - 11% APY

4. Kamino (Raydium) mSOL-SOL - 10% APY

5. Kamino PYUSD - 9% APY

In the news

• Fed implemented a 50bps rate cut this week leading to a rally across markets. What’s next? - Read

• An early version of Jump’s Firedancer validator client, “Frankendancer”, is live on Solana mainnet - Read

• Solana-based Drift raises $25 million to build ‘SuperApp’ for DeFi trading - Read

• BlackRock calls Bitcoin a ‘unique diversifier’ that is “detached from traditional risk drivers” - Read

• Sky (formerly Maker) votes to offload WBTC collateral in multiple phases - Read

• Aave community opposes drastic offboarding of WBTC collateral, stating “WBTC users are legitimate users of the Aave protocol” - Read

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