Is the Solana Smartphone Really the “Apple of Web3” and a Direct Threat to Ethereum?

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This is not investment advice. The author has no position in any of the stocks mentioned. WCCF TECH INC has a disclosure and ethics policy.

As the entire crypto world continues to rock and shudder under the near-constant strain of plunging token prices and a cascade of liquidations, Solana stole the proverbial spotlight yesterday, at least temporarily, when it announced a dedicated Android-based smartphone.

To wit, Solana is now betting on the Android smartphone – dubbed Saga – to revive its mojo. The device will be paired with the Solana Mobile Stack, which will allow native Android-based Web3 apps to work seamlessly with the Solana network. Its other key features include:

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  • Seed Vault – a secure custody protocol that would allow users to sign transactions while retaining private keys' privacy
  • Solana dApp Store
  • Saga Pass – an NFT that will serve as the gateway, allowing its holder to participate in community governance of the Solana Mobile Stack

As far as device specifications are concerned, Saga will feature a "6.67" OLED display, 12 GB RAM, 512 GB storage, and the latest flagship Snapdragon® 8+ Gen 1 Mobile Platform." The $1,000 smartphone can be pre-ordered via a $100 fully-refundable deposit.

By pairing Saga with a Web3 stack for developers, Solana is billing the offering as the "secure, biometric-integrated custody solutions we've been dreaming of, that have somehow failed to materialize on the roadmaps of the mobile giants."

This bold move by Solana has predictably garnered a mixed reaction. For instance, David Ticzon, the VC Investment Director at Matrixport, termed Saga an "Apple of Web3" moment:

Moreover, Twitter user Nathanweb3 termed Solana's Saga a direct threat to Ethereum as it greatly simplifies the process of interacting with Web3 apps, an arena where Ethereum is usually found sorely lacking due to its complicated UX.

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However, this move by Solana is not an all-encompassing elixir to the platform's stability woes.

Before going further, let's recap how transactions are processed on the Solana blockchain. Here, a pre-selected leader receives incoming transactions and generates Proof of History (POH). For context, POH is simply a distinct hash that encodes the passage of time. This allows the entire network to keep track of time, including the order in which transactions are received, without communicating with other nodes and expending precious network bandwidth in the process. The leader node then sequences these transactions and executes them. These executed transactions are then published along with final state signatures. The verifier or replication nodes execute similar transactions on their respective copies of the state and then publish state signatures. These published signatures then serve as votes in the consensus process.

Is Solana's Saga a Threat to Ethereum?

This brings us to the crux of the matter. Solana suffered its fifth network-wide outage of the year a few days back. These frequent outages are currently seriously undermining the network's credibility. While we had noted in our previous post on Solana that these outages reflected teething problems that should become less frequent with the passage of time, we have yet to see any evidence for this hypothesis. It is precisely due to this chronic instability that some crypto community members have outrightly rejected Saga as a gimmick.

At the other end of the spectrum, readers should note that Vitalik Buterin, the co-founder of Ethereum, recently expressed displeasure at the direction that Web3 is headed toward:

While noting the contradictions in his own thesis for Web3, Buterin noted in a tweet:

"Contradiction between my desire for crypto to grow beyond finance and my realization that finance (incl payments+SoV) is still by far the most successful category of crypto apps, *especially* among third-world residents, human rights activists and vulnerable people generally."

In fact, Buterin is increasingly betting on Soulbound Tokens (SBTs) as the future of Web3. For the uninitiated, SBTs are non-transferrable NFTs held by unique crypto wallets called Souls.

Consequently, with so much uncertainty prevailing over the form and direction that Web3 will take, Solana's Saga can be a shrewd attempt at capturing the narrative, so to say. If the project proves popular, Solana can dictate the terms of Web3's future, placing it at the apex of the "new internet".

To conclude, Saga can pose a sizable challenge to Ethereum's dominance over Web3. But only if the network is able to sort out the issue of frequent outages and verifiably improve the stability of the network.

Do you think Solana's Saga initiative is a game-changer? Let us know your thoughts in the comments section below.

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