Author: Alejandra Martinez, Foundation Capital
Original Title: The era of opinionated L1s is here and Solana will win it on mobile
Compiled and Edited: BitpushNews
The era of blockchains competing on TPS and attracting developers with long-term technical roadmaps is over.
High performance has become the entry ticket for any L1 to gain adoption.
Therefore, the competition among L1s is increasingly shifting to the top of the "application stack"—the focus is now on applications and users, rather than underlying infrastructure and whitepapers.
Solana is in an excellent position to leverage this shift. We have been closely watching Solana since our investment in 2018. Today, this chain and its ecosystem are mature enough that its founder Toly, and Solana Labs, no longer need to focus excessively on performance optimization.
Solana's focus on the "Internet Capital Market" (ICM), and the team's efforts on the Seeker project, provide a natural path for it to implement a clear technical proposition from hardware to application layer. Solana will ultimately win in the field of capital formation because it is best positioned to win where billions of people and institutions interact: on mobile.
Blockchains Need to Have a Clear Stance
In the past, it was valid for blockchains to create immense value by providing neutral backend infrastructure for third-party developers. But aside from the notable exception of Bitcoin, things have changed now. L1s now face regulatory clarity, high-performance technology, and competition from financial giants. It is no longer enough for blockchain teams to simply issue ecosystem grants, invest in core infrastructure development, and then expect significant growth to follow.
The basis of competition has moved up to the top of the application stack.
In recent market cycles, centralized crypto applications began building their own infrastructure, excluding L1s from the value equation. Binance built BNB Chain, and Coinbase built Base (although it's an L2, it captures more value for itself than it passes to Ethereum).
New chains like Stripe's Tempo and Circle's Arc are natively designed to support a specialized blockchain tech stack and benefit from the parent company's existing distribution channels. Hyperliquid made opinionated L1 design decisions to build a perpetual contracts product superior to centralized exchanges.
Reasonable people can debate how good these chains can become from a technical perspective, but it's clear that "distribution capability" is now king.
Established blockchains need to form a clear proposition about how their tech stack is used, or they will struggle to acquire new users. We are already seeing this trend: Polygon just acquired Coinme and Sequence, transforming into a US-regulated payments platform; and Vitalik's recently announced Kohaku project is pushing a privacy tech stack for Ethereum.
For Solana, given its defensible technology, revenue, and ecosystem, it is not a matter of life and death for its core team to compete at the top of the application stack. But competing at the application and design layer is an offensive strategy against those specialized L1s and can leverage the distribution advantages of a large chain.
First, we need to think about what is hindering the realization of the ICM vision.
ICM Needs Mobile
Currently, the on-chain experience is still clunky, fragmented, and browser-based. Although many ecosystem teams are working on improving Solana's blockchain performance and attracting liquidity, we have not yet built the right product that goes directly to where the users are—their phones.
The Internet Capital Market (ICM) envisions a future where anyone, with just an internet connection, can create or join a market anytime, anywhere. This will give rise to entirely new assets, as capital forms from both top-down and bottom-up directions. But for ICM to breakthrough, the market must capture people's fickle attention—and attention starts on their phones.
Solana's performance and underlying building blocks can make it the default operating system for any mobile crypto application. It just needs the right liquidity and applications to demonstrate how large-scale capital formation can happen.
In realizing mobile ICM, few teams are more advantaged than Solana Labs itself. Our optimism starts with Toly, who, after creating a top-tier chain, could have rested on his laurels but decided to return to the front lines through Solana Mobile, returning to his roots in mobile development. Labs has the distribution capability and leadership's firm support for mobile to build a vertically integrated application that can scale to millions of users.
Solana Labs has already solved half the problem: building mobile hardware and a mobile ecosystem natively supporting Solana. Solana Mobile just launched the SKR token, the native asset for the crypto mobile era. But the scope shouldn't stop there: Solana Labs should leverage its technology to unlock new branches of ICM, expanding mobile efforts to the application layer.
Construction shouldn't stop until every mobile crypto application is running Solana in the background. Imagine a frontend with Toly's design imprint: integrated DEX, perpetual contracts, and payment functions. Give him two more coffees and a beer, and we fully support it.
Implications for the Ecosystem
An unavoidable question is: What does Solana Labs creating mobile applications mean for ecosystem developers?
On any closed platform, developers live in fear that Meta or OpenAI will suddenly build their version of the most successful app and exclude competitors from the platform. But a vertically integrated app by the Solana team can demonstrate a completely different approach to this competitive dynamic.
Solana is permissionless, so no one can shut down a competitor—not even Solana Labs itself. Healthy competition can make both Solana Labs and Solana ecosystem developers stronger.
More importantly, the fundamental purpose of Solana Labs expanding its scope should not be to highlight its own products or business at the expense of others. Applications designed by Solana Labs will reflect its clear design propositions, which should benefit the long-term health of the network, not maximize short-term value capture. These applications will highlight and integrate other parts of its ecosystem in ways that standalone apps or new chains might not be able to. This could be beneficial for the ecosystem: Solana Labs can take risks and provide low-margin utility tools that independent companies might struggle to justify.
Of course, Solana Labs building applications also means that if a developer's project lacks distribution or technical advantages, they might find it harder to acquire users. Ultimately, this will force entrepreneurs to be more strategic in choosing their ideas, looking for their unique advantages.
Since our initial investment in 2018, we have invested in Solana ecosystem projects almost every year. For us, Solana Mobile represents an opportunity to transcend the duopoly of Apple and Google app stores: it is the infrastructure Solana is laying to dominate the next phase of crypto adoption. Our view is that Solana should build at the application layer to leverage its own distribution network—building, collaborating, and acquiring across the entire ecosystem, like any other major player. This will ultimately make the ecosystem more competitive, and we are excited to continue investing in entrepreneurs building on Solana.
The winners and losers in crypto over the next five years will no longer be determined by speculation or regulatory arbitrage.
It will depend on which core teams can make the right, opinionated decisions to win the top of the application stack.
We have already seen more opinionated strategies taking root in other L1s and centralized crypto exchanges, and we look forward to Solana moving in this direction as it becomes the go-to place for the Internet Capital Market.
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