Solana's Path To Decentralized Nasdaq | Max Resnick
🎯 Summary
Podcast Summary: Solana’s Path To Decentralized Nasdaq | Max Resnick
This 71-minute episode features Jack Cubanek interviewing Max Resnick, the Lead Economist at ANZA (the developer shop behind the Solana client), who previously worked in Ethereum research. The core discussion revolves around Solana’s technical evolution, its strategy for achieving high-performance internet capital markets, and the necessary shifts in market structure to support this vision.
1. Focus Area
The primary focus is on Solana’s core protocol development, network maturation, and the economics/market structure required to support high-frequency, deep-liquidity decentralized finance (DeFi), aiming to create a “Decentralized Nasdaq.” Key themes include the transition from initial “duct-taped” launch to robust engineering, the challenges of on-chain Central Limit Order Books (CLOBs), and the role of consensus upgrades like Alpine Glow.
2. Key Technical Insights
- Protocol Maturation: Solana is moving past “firefighting” mode (necessary for its 2020 launch) toward fundamental quality-of-life improvements, such as enforcing the Compute Unit (CU) limit on blocks and implementing explicit transaction/block headers, which enable long-term roadmapping.
- Performance Audits: ANZA is conducting deep “performance audits” where experts redesign critical components (like Turbine) from first principles using profiling tools to ensure they are built for significantly higher throughput, preventing future technical debt.
- Alpine Glow Progress: The major consensus upgrade, Alpine Glow, is progressing rapidly. Internal testing on devnet hooked up to g-vote is already running, with a target for Testnet deployment by December (Breakpoint) and a mainnet launch planned for early next year.
3. Market/Investment Angle
- CLOBs vs. Dark AMMs: Resnick argues that traditional CLOBs may not be the optimal market structure for a high-throughput L1 like Solana due to the cost of updating quotes and the impact of MEV extraction on market makers (MMs).
- MM Protection is Key: The primary goal is tight spreads and deep liquidity. This requires protecting market makers from adverse selection, often through mechanisms that give them a “head start” in the maker-taker race (e.g., prioritizing cancels).
- Emerging Success: Currently, proprietary Dark AMMs (like SolFi, ZeroFi, Orbic) are achieving surprisingly tight spreads, even tighter than centralized exchanges, suggesting that non-CLOB structures are currently better suited for managing adverse selection on-chain.
4. Notable Companies/People
- ANZA: The core developer shop responsible for maintaining and upgrading the Solana client, focusing purely on L1 performance.
- Max Resnick: Lead Economist at ANZA, specializing in game theory and MEV, driving economic design for upgrades like Alpine Glow.
- Anatoly Yakovenko: Co-founder of Solana, co-author of the recent blog post detailing internet capital markets vision.
- Dark AMMs (SolFi, ZeroFi, Orbic): Highlighted as current leaders in achieving tight spreads on Solana spot markets.
5. Regulatory/Policy Discussion
No explicit regulatory discussion was noted, but the focus on building robust, high-performance financial infrastructure implies a long-term goal of competing directly with traditional finance (TradFi) market structures.
6. Future Implications
The conversation suggests Solana is moving toward a sophisticated, multi-faceted market structure that leverages protocol changes (like Multi-Leader Consensus/ACE) alongside innovative application-layer designs (like the successful Dark AMMs). The future vision is a system where liquidity is deep, spreads are tight, and the network can handle the demands of global price discovery, potentially eclipsing current CLOB models. The concept of multiple concurrent leaders is proposed as a key mechanism to enforce quality of service and protect market makers by ensuring transaction inclusion/ordering rules are respected across different block producers.
7. Target Audience
This episode is highly valuable for Solana core developers, DeFi architects, quantitative traders, and crypto investment professionals focused on L1 scaling solutions and advanced market microstructure design.
🏢 Companies Mentioned
💬 Key Insights
"The healthiest way for the chain to make money is to charge per transaction. So I want us to be 1 million TPS, as Dan Smith put in his tweet, point two cents per transaction or something like that, and that's $60 billion a year."
"And so sandwich tips are really low, and the sandwicher keeps all of it. They don't give it to the validator. Which is very different. Like on the ETH sandwiching game, it's in the mempool. 10 sandwich bots see it, you all bid, and the bid goes up super high."
"No, I mean, if we turn on sandwiching for every validator, actually rewards will go way up. Yeah. And the thing about this dynamic where there's only 10% sandwiching is that Jito, like an auction, you only need two bidders to run an auction, but you need two bidders. If there's only one, then the equilibrium bid is zero."
"But on ETH, it's so socially accepted to sandwich. Nobody even talks about it on ETH. Everybody even runs PBS to sandwiching on ETH."
"We're sending a few and fewer validators. And so a 10% stake that's sandwiching is able to see only 10% of the transactions, which is what it should be. But before it was 10% of the stake sandwiching was able to see 90% of the transactions or whatever."
"I think part of why Solana is going to win long-term because there's no ego, no sacred cows. CLOBs are not a sacred cow for us. Liquid markets, that's the sacred cow. That's the goal, and whatever tools we need to achieve that."