A month ago, Vibhu, the founder of DRiP, a consumer application on Solana that distributes free NFTs from top artists, sparked a necessary debate with his statement: Solana needs to introduce an L2 expansion layer or Rollups.
His dissatisfaction stems from the fact that DRiP has been losing a significant amount of value at a base level (roughly $20,000 per week) thanks to SOL price increases and network congestion.
Increased activity on Solana has resulted in:
Advantages — Enhanced liquidity, capital, and trading volume (due to composability)
Disadvantages – High infrastructure costs, poor user experience, and congestion issues
However, DRiP mainly uses Solana as infrastructure, distributing millions of NFTs from artists to thousands of wallets every week, and does not benefit from high composability. Solana's total locked value and capital inflows have less impact on DRiP, which mainly faces disadvantages such as high infrastructure costs.
“Composability has diminishing returns,” Vibhu noted, noting that Solana application developers have privately discussed their desire to introduce Rollups for reasons including:
Increased transaction throughput, reduced competition for block space, and reduced fees.
Have greater control over the economic value created by their business.
Solana has experienced multiple congestion events over the past few months, involving everything from JUP airdrops to ORE mining and peak Memecoin transactions . While one might think that Firedancer can solve all of these problems, let’s be realistic: the timeline remains uncertain and it cannot scale more than 10x at this time. Still, the fact is that Solana remains the last true monolith among all the tried and tested major chains.
Should Solana remain monolithic or become modular? Will Solana also develop decentralized L2 and L3 solutions like Ethereum? What is the current situation of application chains and Rollups on Solana? To answer these questions and summarize the whole debate, this article will explore all possibilities, discuss various projects, and evaluate their pros and cons.
This article will not delve into technical details, but will discuss various extension approaches from a market-oriented and practical perspective to provide an overview. We will discuss:
Solana and Congestion
Making Solana modular
Solana Application Chain — with Examples
Solana’s Layer-2 and Rollups (RollApps) — with examples
Infrastructure power to support Rollups and application chains
1. Solana and congestion issues
Let's first talk about the key point in the question: the Solana network has been having severe congestion issues recently (now mostly resolved) due to airdrops, large amounts of Memecoin trading activity, etc., resulting in high latency, a high percentage of transaction failures, and increased network fees due to higher priority fees. Despite these issues, Solana is still processing about 1-2k transactions per second, which is more than all Ethereum Virtual Machine (EVM) chains combined. I think this is a good problem for blockchains, and it also tests Solana's monolithic theory.
The Solana Foundation recently published a blog post urging the project to take immediate actions to improve network performance, including:
-Implementing priority fees — is critical to avoid delayed or lost transactions.
-Optimizes the usage of program compute units (CUs) — only the necessary ones are used.
- Implement stake-weighted Quality of Service (QoS) — allowing applications to prioritize transaction processing for their users.
While modularity advocates strongly advocate for Solana to adopt a “modular roadmap,” Solana Labs/Anza (the core maintainers of the Solana protocol) remains focused on optimizing throughput and latency at the base layer. Some potential improvements include:
- Overhaul of the fee market, increasing the base fee (currently set to 5,000 Lamports or 0.000005 SOL).
-Implement exponential write lock fees on accounts, i.e. fees that gradually increase over time to discourage spam.
-Optimized CU budget requests through penalty system.
-Improve the performance of the overall network architecture.
Even with these vertical scaling (single chain) improvements, we can’t rule out Solana adopting horizontal scaling (Rollups). The truth is, Solana could be a hybrid of both — it could serve as an excellent base layer for Rollups, with ultra-low latency block times (~400ms) that would greatly benefit Rollups, such as allowing super-fast soft confirmations from sequencers. The best part is that Solana has historically been very fast to implement changes, which could make it a more efficient Rollups layer than Ethereum.
Update: Anza has now rolled out some patches that have helped alleviate some of the ongoing network congestion issues, and will be making further enhancements in v1.18.
2. Make Solana modular
Efforts to make Solana modular have already begun. As shown in the Anza DevRel post, Solana validators and SVM (the execution environment that handles transactions and smart contracts/programs) are tightly coupled and maintained by Anza (a forked entity of Solana Labs). However, the validator client and SVM runtime will be separated in the next few months. This separation will help separate the SVM and easily create "Solana Application Chains".
For Rollups, the advantage may come from optimizing Solana’s data availability (DA) / blob layer, although this may come at a later stage.
Source: Anza DevRel
Joe C (Anza engineer) also announced plans to make SVM modular, where the transaction processing will be separated from the validator and put into the SVM. This will enable developers to run an implementation of SVM and operate it independently of any validator.
The standalone SVM will consist of completely independent modules. Any SVM implementation can drive these modules through well-defined interfaces, further lowering the barrier to SVM-compatible projects and significantly reducing the overhead required to build custom solutions. Teams can implement only the modules they are interested in while leveraging other partially established implementations, such as those from Agave or Firedancer.
In short, Solana will be more pluggable, making Solana's application chains and Rollups easier to implement.
Broadly speaking, this development can go in two directions: Layer-2/Rollups and Application Chains. We will look at each of these directions separately.
3. Solana Application Chain
Also known as SVM forks, these are essentially forks of the Solana chain dedicated to specific applications . Python was the first Solana AppChain, but the concept really gained traction when Rune, the founder of DeFi protocol Maker, proposed developing a Maker AppChain (for governance) based on the Solana (SVM) codebase. He chose SVM because of its strong developer community and technical advantages, aiming to fork out the highest-performing chain to better meet user needs. Although nothing has been implemented yet, the move has sparked an urgent discussion about Solana AppChains.
Broadly speaking, it can be divided into two types:
- Permissionless: Anyone can join the network, similar to the current Solana mainnet.
-Permissioned: The Solana Foundation packages it into “Solana Permissioned Environments (SPEs)” for institutions, allowing entities to build and maintain their own chain instances, driven by the SVM.
Pyth — Solana’s original application chain:
At one point, Pyth accounted for 10-20% of all transactions on the Solana mainnet. However, it did not require any composability, so they simply forked Solana's codebase. This allowed them to take advantage of Solana's fast 400 millisecond block time for high-frequency price updates. Pythnet is the first webappchain to adopt SVM.
The Pythnet application chain is an authoritative proof-of-authority fork of the Solana mainnet, serving as a computing base layer for processing and aggregating data provided by the Pyth data publisher network.
Why is Python migrating?
- It does not require composability and is therefore immune to mainnet congestion.
-It requires a permissioned environment to publish data.
Cube Exchange is another example, a hybrid centralized exchange deployed as a sovereign SVM application chain (with a fully off-chain order book and settlement on its SVM application chain).
Some examples of Solana Lisks might include:
Perp DEX: Like Hyperliquid, Perp DEX can run as an independent L1 network. In addition, for trading use cases, the number of transactions per block can be customized, or conditional logic can be implemented, such as integrating the execution of stop-loss orders directly into L1, ensuring that it is executed as a state transition, or introducing application-specific atomic logic.
AI and DePIN: These application chains can have a controlled list of service providers like Pyth. For example, Akash operates as a computing market through the Cosmos application chain.
Governance application chains: Sovereign governance application chains may be attractive, as validated by MakerDAO’s interest in the SVM application chain. The governance of cryptocurrencies is still evolving, and having a dedicated chain to fork can be a useful coordination mechanism.
Future enterprise application chains: Potential applications include funds (such as BlackRock) or payment systems (such as Visa or CBDC).
Game Application Chain: A casino game project on Solana is considering its application chain.
Modified Solana Fork: Similar to how Monad or Sei provide an optimized EVM (parallelization), someone could build a more optimized version of Solana. This trend is likely to become more common in the coming years, especially as the Solana mainnet begins exploring new design architectures.
4. Envisioning the Solana Application Chain Stack
While building an application chain may be relatively simple, ensuring connectivity between all application chains is critical for interoperability . Drawing on the work of Avalanche subnets (connected via native Avalanche Warp Messaging) and Cosmos application chains (connected via IBC), Solana can also create a native messaging framework to connect these application chains.
It is also possible to create middleware similar to Cosmos-SDK to provide a one-stop solution for creating application chains, with built-in support for oracles (such as Pyth or Switchboard), RPC (such as Helius), and message connectivity (such as Wormhole).
Polygon’s AggLayer is also an interesting approach where developers can connect any L1 or L2 chain to the AggLayer, which aggregates ZK proofs from all connected chains.
Does the application chain have a positive impact on the Solana ecosystem?
While appchains do not accrue value to SOL directly, as they do not pay SOL fees or use SOL as a fuel token unless the re-pledged SOL is used for economic security, they do greatly benefit the SVM ecosystem. Just as there is an "EVM network effect", more SVM forks and appchains will strengthen the SVM network effect. Even though Eclipse (SVM L2 based on Ethereum) is a direct competitor to the Solana mainnet, the logic that applies to SVM still applies, as it will also strengthen the prospects of SVM.
5. Solana Layer2 (L2):
Solana Layer2, or Rollup, is a logically independent chain that publishes data to the data availability (DA) layer of the chain to which they belong and reuses the consensus mechanism of the chain to which they belong. They can also use other DA layers, such as Celestia, but then they are no longer true Rollups. "RollApp" is a term generally used for application-specific Rollups (which most Solana applications are exploring).
1) Is Solana’s Rollup the same as Ethereum’s Rollup?
Obviously not. For Solana, Rollup is mostly abstract to end users. Ideologically, Ethereum's Rollup was top-down, with the Ethereum Foundation and leadership deciding to achieve scaling through Rollup and starting to support various L2s after the CryptoKitties incident. On Solana, demand is bottom-up, coming from application developers with significant user adoption. Therefore, most current Rollup implementations are more market-driven and more narrative-driven than consumer demand-driven. This is an important distinction that may lead to a different future for Rollup on Solana than on Ethereum.
Are Compression and Rollup the same?
L2 scales the base layer blockchain (L1) by executing transactions on L2, batching transaction data, and compressing it. The compressed data is then sent to L1 and used in fraud proofs (optimistic Rollup) or validity proofs (zk Rollup). This proof process is called "settlement". Similarly, compression can offload transactions from the mainnet and reduce contention for the base layer state. Notably, Grass L2 will utilize state compression for its Rollup.
Rollup landscape on Solana:
There are currently two “partial rollup” applications running:
A. GetCode: This is a payment application with a micropayment SDK that allows anyone to instantly pay and accept payments, and also uses a pseudo-Rollup for its application. It creates intents for all transactions and uses a Rollup-like sequencer to settle on Solana after N intervals.
Using a Rollup-like structure brings the following benefits:
Flexibility: Intents can represent a variety of future activities, not just payment transactions. Also, Solana as a chain can be replaced if needed.
Instant and Private: Due to the soft finality of the sequencer, payments are instant even when Solana is congested. While transactions are visible on-chain, the exact value and intent remain hidden, ensuring user privacy.
B. MagicBlocks' Ephermal Rollups MagicBlocks is a Web3 gaming infrastructure that developed the Ephermal (or temporary) Rollup specifically for gaming. It leverages the SVM account structure and splits the game state into multiple clusters. It temporarily transfers the state to an auxiliary layer or a configurable dedicated layer called "temporary Rollup". The temporary Rollup acts as a specialized SVM runtime or Rollup to facilitate transaction processing with increased throughput.
Using a Rollup-like structure brings the following benefits:
- Customizable specialized runs, including gas-free transactions, faster block times, and integrated timing mechanisms (e.g., integrated transaction scheduling systems like clockwork, which run without fees).
- Developers can deploy programs to the base layer (such as Solana) instead of a separate chain or Rollup. Temporary Rollups do not split the existing ecosystem and allow for the acceleration of targeted operations without creating isolated environments. This means that all existing Solana infrastructure can be leveraged.
-This approach enables a highly scalable system that can spin up Rollups on demand and auto-scale horizontally to accommodate users performing millions of transactions without the tradeoffs of traditional L2. While MagicBlocks focuses on the gaming space, this approach can also be applied to other applications such as payments.
2) Upcoming Solana Rollups
Grass: The DePIN project aims to solve the AI data problem by verifying crawling. When a Grass node crawls AI training data from the network, the verifier will store the data on the chain, accurately track the source of the data and the node responsible for crawling the data, and reward them proportionally.
Grass requires 1 million network requests per second, which is not feasible on Solana mainnet. Therefore, they plan to make ZK proofs of the original data for all datasets and settle them in batches on Solana L1. They are considering using state compression from another cluster and doing the settlement root on mainnet-beta.
This development will allow Grass to become the base layer for a variety of applications that can only be implemented on top of it (note that platforms and infrastructure generally have higher valuations, and Grass is about to launch a token haha).
Zeta: One of the earliest perpetual contract decentralized trading platforms on Solana, it has a complete on-chain perpetual contract order book and also plans to move its matching off-chain through Solana Rollup.
For perpetual swaps, Rollups have immediate market adaptability because they greatly improve the user experience. Just ask anyone who has traded on Hyperliquid or Aevo vs Solana perpetual swaps, where each transaction requires a signature, a wallet pop-up, and a wait of about 10-20 seconds. Additionally, perpetual swaps do not require synchronous execution and are highly composable with other aspects of DeFi, especially trade matching.
Interestingly, Armani, the co-founder of Backpack, tweeted that they are now leaning towards L2 (second layer scaling solutions) as well.
Sonic is also building a modular SVM chain (Hypergrid) that enables games to deploy their own chains on Solana. There are also SVM-based Ethereum Rollups, such as Eclipse and NitroVM, which use SVM as an execution engine. Neon acts as a second-layer scaling solution compatible with EVM on Solana. In addition, there are some projects in the conception stage, such as Molecule (an SVM Bitcoin second-layer solution).
Sovereign SDK is another Node.js-like framework for building Rollups. Users can bring their Rust code, and we convert it into an optimistic or ZK Rollup that can be deployed on any blockchain. The Rust code can be your specific application logic or any virtual machine.
3) Several views on Rollups:
A. Rollups = Alignment with SOL
The term “aligned with Ethereum”, or better yet “Ethereum bag bias”, has become a popular meme. Why do you think Layer 2 and restaking/feature layers have become the hottest narrative? It’s because they increase the “moneyness of ETH”, ETH being used as a core asset everywhere.
The same principle applies to Solana. The Solana community will rally around any solution that increases the value of their SOL holdings , it's that simple. As the Solana ecosystem expands, the once-overlooked "monetary nature of SOL" will become important. Remember that most Rollups are actually "marketing strategies" and since the market still values infrastructure more than applications, they provide better token value accumulation.
B. Rollups will feel like an extension of Solana
In addition to the security benefits (i.e., inherited from the base layer), easy access to Solana users and assets will be a significant advantage. As Jon Charbonneau points out, Ethereum Rollups (like Base, Optimism, and Arbitrum) are more like extensions of Ethereum. Users keep the same wallets and addresses, the native fuel token is a unique version of ETH, ETH dominates DeFi, all trading pairs are denominated in ETH, social applications price NFTs in ETH and pay ETH to creators (e.g. friend.tech), deposits to L2 are instant, and so on.
The same will happen on Solana. Taking a page from Ethereum’s playbook, most Solana Rollapps will not make users feel like they are using a separate chain (e.g. Getcode).
C. Solana will see more “RollApps” instead of “Rollups”
Solana does not have scaling issues like Ethereum, where the Ethereum mainnet is unusable due to high gas fees, while Solana is highly optimized. However, some applications that require dedicated block space will create their own Rollups. While it does not make much sense for me to use general-purpose Rollups on Solana, it makes sense for the project from an economic perspective. For example, Base users generated $2 million in revenue for Coinbase in just one day! The incentives for developers to build L2 are very biased. However, as observed, every EVM Rollup seems to be a normal Rollup, and many projects like Linea, Scroll, or zkSync have become ghost chains with only farmers making small transactions for token airdrops.
Additionally, I think using a general L2 on Solana could lead to the same problems as Ethereum, namely centralized Rollups, congestion, and liquidity fragmentation.
6. Why do some apps want to move to Rollapps/appchain?
Each application will initially launch on the Solana mainnet because hosting more applications on shared infrastructure can significantly reduce complexity for developers and users. However, as these applications grow, they may seek benefits in the following areas:
Value Capture : Internalizing value is more challenging on a shared Solana layer that is not designed for just one application. MEV (Maximum Ethereum Value) capture could be another lucrative option for decentralized exchanges.
Dedicated block space
Customizability for the following use cases:
-Privacy: For example, Getcode uses a sequencer to provide private payment capabilities to its users.
-Expense market experiment
- Encrypted mempool to minimize MEV
-Custom Order Books However, not all applications will want to launch their own Rollup, especially those that have not yet reached a certain escape velocity (e.g., sufficient total locked value, users, trading volume) . Launching your own chain today involves painful and unnecessary trade-offs (complexity, cost, poor user experience, liquidity fragmentation, etc.), and most applications, especially those in the early stages, cannot justify the incremental benefits. Solana remains at the core of SVM development, and it is likely that many new applications will be deployed.
For application builders: Solana mainnet, Appchain, or Rollup depends on the specific situation. It makes sense to put some different components off-chain (whether appchain or rollup) if they don’t need to be combined with all other applications. Users don’t even need to know that they are using a rollup or appchain. Applications such as Grass, Zeta, and Getcode all abstract away any rollup type infrastructure they use for their users.
For use cases that require permissions and customization, Token Extension can also meet most requirements, such as KYC/transfer logic, while maintaining composability.
Infrastructure supporting Rollups and Appchains:
If the RollApp/AppChain thesis is extended, existing infrastructure providers will benefit from entering new markets:
Existing Rollup as a Service (RaaS) providers like Caldera can easily enter the SVM market when the demand arises. SVM Ethereum Rollups like Eclipse and NitroVM are also keeping an eye on this opportunity. In addition, Sovereign Labs offers a Sovereign SDK Solana adapter that enables Rollups on Solana (not yet production-ready). Helius is another company that is well suited to build infrastructure for Solana L2, as Mert has hinted at multiple times.
Shared sequencers, like Rome Protocol, and the need for light clients like Tinydancer. Shared sequencers are very interesting for Rollups because they enable activities like atomic arbitrage, MEV, and seamless bridging, reducing liquidity fragmentation.
Wallets like Phantom, Backpack, and Solflare, as well as multi-signature and smart contract wallet infrastructure like Squads, which has been positioned as “the definitive smart contract wallet infrastructure layer for Solana and SVM.”
SOL Re-hypothecation: The modularity argument also promotes re-hypothecation, as these Rollups/appchains may require SOL to share security and be more coordinated with Solana. This leads to:
Early adopters like Cambrian, Picaso, and Solayer are staking through Stakenet and Jito validators of LSTs like Sanctum - increasing their income.
7. Summary: Can Solana handle global demand?
Definitely not. Let’s be realistic: even taking into account Moore’s Law (hardware performance will continue to improve, and Solana is optimized for these hardware advances), this is impractical. I believe that all less critical transactions (such as DRiP sending NFTs) will eventually move to their own chains, while the most valuable transactions will remain on the main chain, where true composability is critical (e.g. spot decentralized exchanges).
This doesn’t mean Solana loses the race to monolithic and composability; it will manage better than other chains in situations that rely on composability and low latency. Also, Sui/Aptos/Sei/Monad etc. are not currently better options because we don’t know if they have been tested with high levels of real user activity.
Unlike Ethereum, the goal of Solana Mainnet is not to become a "B2B chain", it has always been a consumer chain. There are huge challenges in building distributed systems at scale, and Solana has the greatest potential to become a shared ledger for the world's most valuable transactions.
Solana needs a soulmate: are Appchains and Rollups its perfect match? Comments welcome.
