Solana Growth Hack, SOL dApp Store, DeFi Velocity & More

We’re back!

In this week's newsletter we explore how teams building on Solana can grow their user base, the Solana dApp Store and DeFi velocity — a new KPI which might better illustrate the liveliness of a DeFi ecosystem.

To recap, here are our most read stories of January:

• The Backpack wallet will go live with xNFTs, wallet to wallet messaging, Ledger-only onboarding, multi-mnemonic wallets and a combined interface for both Ethereum and Solana wallets. More here.

• BYOB, a web application submitted to the Sandstorm Hackathon, allows developers to combine multiple actions into one atomic transaction — making advanced DeFi services such as flash loans possible. More here.

• Frictionless Capital, a private equity firm run by Logan Jastremski and Solana Legend, released a Solana handbook that addresses the most persistent criticism of the network. More here.

Now, let’s get the show on the road!

Click on any underlined heading / hyperlink to learn more.

Spotlight

Growth Hacking Solana

User growth — one of the most complex challenges DeFi teams are grappling with.

In this context, Twitter is currently seen as the main onboarding channel.

Having said that, users that are on Twitter, and specifically Crypto Twitter, are already “crypto native” — winning them over doesn’t significantly increase the total addressable market (TAM) of DeFi as a whole.

So, what to do?

We looked at the data.

What we found is that CEXs such as Coinbase, Binance and Kraken are doing a better job of onboarding new users i.e. “normies” than DeFi teams.

Unsurprisingly, this has turned CEXs into the go-to on ramp for crypto.

How exactly do CEXs onboard new users, though?

By not only focusing on Twitter, but also on easy to understand content that is highly accessible on search engines such as Google, Bing, DuckDuckGo, and Naver.

The reason why CEXs also focus on search engines is simple:

• Google: ~ 4.3 billion users worldwide

• Twitter: ~ 238 million monetisable daily active users (mDAU)

Let’s look at the absolute numbers.

Findings

• Coinbase receives the most organic website traffic per month, followed by Binance and Kraken.

• Ethereum brands generate more organic website traffic per month than Solana brands, and widely utilise Google Ads — compared to Solana brands.

• Further, 1Inch receives ~58x more organic website traffic per month than Jupiter, Uniswap ~34x more than Orca, and dydx ~15x more than Mango.

• Most organic website traffic comes from the US — regardless whether we look at Ethereum or Solana — with India and Turkey often rounding off the top 3.

• Interestingly, most organic traffic to the Uniswap websites comes from Brazil, and Aave seems to have a strong foothold in Europe.

Absolute numbers, however, are not really that helpful, so let’s put them into context.

A Twitter/Search ratio of <1 = more unique monthly user visits from Google Search to the website than the number of Twitter followers; >1 = larger Twitter following than unique monthly user visits from Google Search to the website.

Or: Brands that have a Twitter/Search ratio of <1 overindex on acquiring users through search engines, and brands that have a Twitter/Search ratio of >1 overindex on acquiring users through Twitter.

When a brand has a Twitter/Search ratio that ranges between -2 and +2, its user acquisition strategy is mostly balanced, as both Twitter and search engines (incl. Google Ads) seem to play an important strategic role.

Everything outside this range would, therefore, mean that one of the platforms — Twitter or search engines — underperforms or doesn’t play a significant enough role in the respective growth strategy.

Findings

• Coinbase, Binance, Kraken, MetaMask and Uniswap are all doing a good job bringing in not only “crypto natives” from Twitter, but also “normies” from search engines to their respective websites.

• Having said that, most Ethereum brands have lower Twitter/Search ratios than Solana brands, which might imply that they are pursuing both a Twitter and a search engine strategy.

• Solend has the lowest Twitter/Search ratio among its Solana peers, i.e. the protocol's Twitter following and monthly organic website traffic are more in balance. Mango, Jupiter and Cega have the highest Twitter/Search ratios, i.e. their Twitter following far outweighs their monthly organic website traffic.

• Conversely, this indicates that Solana brands still have a massive opportunity to further grow their discoverability through Twitter in general, and search engines in particular.

Disclaimer: a) We’re using third-party tools, the data might not be as precise as proprietary data from Google Analytics or Google Search Console, b) Organic website traffic is defined as 1 count = 1 unique user (IP address) / month coming from a search engine, not a session or a page view — no double counting, c) Also, this excludes e.g. direct, referral, or social traffic — as we assume that these users are already “crypto native” / existing users.

If you’d like to discuss these findings in more detail, please reach out!

Chart Of The Week

News Bites

DeFi Velocity: Ben Sparango, Head of Strategic Business Development at the Solana Foundation, introduced a new KPI: DeFi Velocity. It measures liquidity in comparison to volume (volume per dollar of TVL), which helps highlight which blockchains offer valuable services and tools, and subsequently, have real usage. The DeFi Velocity of Solana is 1.83 (on 7-day volume) — the highest among major blockchains — which implies that on a weekly basis, every dollar in Solana DeFi is being transacted twice. DeFi Llama already measures this on a DEX-basis, with OpenBook ranking in 8th place, Lifinity in 11, GooseFX in 18, Orca in 21 and Raydium in 30 — all way ahead of Curve, Uniswap, PancakeSwap, Balancer, GMX and SushiSwap.

Solana dApp Store: The first screens of the Solana dApp Store have been made public. Also, it was disclosed that the publisher policies of the Solana dApp Store are intended to mirror those of the Google Play Store, except where those policies conflict with the Solana dApp Store mission.

Web3 Payments: Helio Play now allows creators to monetise their content with any SPL token, which not only allows for greater privacy but also direct, instant and micro payments.

Keep Movin': The VM team of Solana Labs continues to build out a Move compiler for Solana — which might be ready in Q3/2023. This would allow developers more flexibility to move (*wink*) between Aptos, Sui and Solana.

Enhanced Security: OtterSec presented a novel framework for formally verifying Solana smart contracts, based on a Squads Protocol case study. Main takeaway: Formal verification dramatically reduces the attack surface of smart contracts.

Sealed Wallet: Until now, Phantom has prevented more than 18,000 unique instances of wallet draining transactions — protecting the digital assets of more than 3,000 unique users in the last 30 days alone.

Lunar Uprising: Hallo Moon launched their developer platform, which helps builders to easily integrate real-time data into their product and services in just a few minutes.

Solana's Truffle: Michael Petch released Bokken, which allows developers to test Solana programmes faster with instant-confirmation transactions — just as Truffle does with Ethereum programmes.

Sleuth Snack: Gelato, another interesting project initiated by the Sandstorm Hackathon, unveiled an on-exchange balance tracker and a major inflow/outflow event log, allowing for better sleuthing on Solana.

AMD Booster: AMD introduced 4th generation EPYC server CPUs which allow for an increased rack density (power delivery permitting) and potentially more speed for Solana.

Decentralisation Transparency: Solana Compass launched a new dashboard, with multiple charts and KPIs which make the decentralisation of Solana more transparent.

Sandstrom Sequel: After Sandstorm, the Solana Foundation is gearing up for the next online hackathon. No details have been released just yet, but developers can sign up here to get notified as soon as details become available.

Weekly Take

Keks & Giggles

And that's a wrap!

If you'd like to reach us, respond to this newsletter or reach out to me on Twitter.

Talk to you soon!

@J264G