Actions, Blinks, and ZK Compression, and Their Significant Innovations

On June 24, Mert Mumtaz, CEO of Helius, developed by the Solana ecosystem, announced on the X platform that ZK Compression was being introduced to Solana. On June 25, the Solana Foundation announced the launch of two new features: Solana Actions (Transactions) and Solana Blinks (Blockchain Links). With the release of a series of new features, Solana once again sparked market discussions. So, what are the technical innovations of Actions, Blinks, and ZK Compression?

Solana Actions is an API designed to allow websites to interact with the Solana blockchain, enabling on-chain activities such as transfers, voting, and donations. It is a compliant API that returns transactions on the Solana blockchain, which can be previewed, signed, and sent in various contexts, including QR codes, buttons, widgets, and websites on the internet. Users can send various transaction commands through Actions, such as on-chain asset transfers and token purchases. Additionally, developers can use Actions to call and execute smart contracts, enabling complex on-chain logic. Actions are characterized by high performance, low latency, and high flexibility, making Solana network application development and user transactions more convenient. They also support the execution of on-chain smart contracts and lay a solid foundation for Solana’s entry into the SocialFi field.

Blinks is a concrete representation of Actions. This concrete representation can be a QR code, a URL, a clickable button, etc. Blinks can convert any Solana Actions into any dissemination method on any information platform, allowing clients that can detect Actions (such as browser extension wallets, bots, etc.) to show additional features to users. When using Blinks, users can operate specific tasks on the current platform page without entering the Dapp behind this concrete representation (which can be a QR code, URL, etc.), making the interaction extremely convenient and straightforward.

What is ZK Compression? ZK Compression uses a process called state compression, enabling developers to use Solana’s ledger space more economically instead of the more expensive account space to store certain types of data. ZK Compression stores the hash value of off-chain data on-chain, keeps the actual data off-chain, and uses state trees for verification. This technique effectively reduces the demand for on-chain storage space, thereby lowering costs and improving overall scalability. By adopting ZK Compression technology, the Solana ecosystem can handle large amounts of data more efficiently and provide developers with more flexible storage options, promoting the development and innovation of blockchain applications. Solana’s official documentation defines ZK Compression as a new fundamental feature built on Solana that helps developers and users build applications at scale.

Technically speaking, Actions and Blinks are a set of development tools that make it easier for developers to integrate applications, helping blockchain applications to be as user-friendly as Web2 applications. ZK Compression, from a technical perspective, mainly aims to reduce developers’ development costs. Overall, Actions, Blinks, and ZK Compression are all dedicated to driving Solana towards large-scale applications. However, there are still many shortcomings in Solana’s aforementioned innovations. For example, currently, the use of Blinks is limited to desktop computers.

Crypto influencer Haotian wrote that the introduction of Blinks and other features faces many practical challenges. For instance, embedding interactive links on Twitter for payment interaction can bring certain experience upgrades, but issues such as mobile and desktop compatibility, cognitive trust issues when users click links, and potential security risks behind the links all fundamentally affect the deep application of this interaction method in the short term. He believes that what Blinks can bring to Solana and how many platforms and users can accept it still lacks a “rigid” driving factor. Imagine, users use Bots on Telegram to grab funds faster, but what would be the motivation for users to use Blinks? Voting, mini-games, tipping, etc., are obviously not powerful driving scenarios.

Solana’s Strong Performance in Q2: Which Ecosystem Protocols Played a Key Role

The overall performance of the crypto market in the second quarter was lackluster, but the MEME frenzy on Solana became one of the few highlights, making the Solana ecosystem stand out in Q2. The most notable protocol in this regard is pump.fun. Benefiting from the MEME frenzy it ignited, pump.fun further fueled the DeFi ecosystem on Solana.

pump.fun Drives MEME Coin Craze on Solana. pump.fun is a MEME coin launch platform on Solana, allowing users to easily create MEME tokens without providing liquidity. In May, several celebrities launched their own tokens on pump.fun, sparking a celebrity MEME coin craze on Solana. According to DefiLlama, pump.fun generated $48 million in revenue in the second quarter, with an average daily income of $525,000.

pump.fun indirectly boosted activity on the Solana chain. According to Dune data, over 1 million transactions were made on the pump.fun platform for deploying MEME coins in Q2. The number of active addresses and new addresses on the platform also showed a growth trend throughout the second quarter, with an average of over 60,000 daily active addresses by June. Correspondingly, the proportion of fees from non-voting transactions in Solana network transaction fees significantly increased in Q2.

With the increase in on-chain transactions on Solana, the DeFi ecosystem on Solana also showed strong performance. In Q2, DEX trading volume on Solana surged, with the average daily trading volume of spot DEXs increasing by 32% month-on-month, reaching $1.6 billion. Notably, Raydium has been the biggest beneficiary of the pump.fun on which MEME coin is launched because once a token reaches the market cap threshold of $69,000, all the liquidity of the pump.fun joint curve is transferred to Raydium.

Jupiter saw significant increases in its spot trading volume and derivatives TVL amid Solana’s MEME frenzy. From Q1 to mid-Q2, Jupiter accounted for over 50% of DEX trading volume. Besides spot trading, the derivatives trading volume on Solana also grew noticeably. Zeta Markets, a perpetual DEX in the Solana ecosystem, saw its average daily perpetual contract trading volume increase by 212% month-on-month in Q2, reaching $82 million.

How will Solana develop in the future?

Throughout this bull market, Solana has exhibited remarkable performance, continually emerging as a market standout with regular significant advancements. In the early stages, the DePIN (Decentralized Physical Infrastructure Networks) sector within the Solana ecosystem was highly anticipated, producing leading projects like Render and Helium. Subsequently, leading projects emerged in sectors such as blockchain gaming and AI within the Solana ecosystem. Recently, despite the overall weak performance of the crypto market, the MEME sector once again made Solana a focal point, with projects like WIF and BONK gaining attention.

Solana has recently announced a 2.0 upgrade, indicating significant future potential. From the perspective of the Solana ecosystem, the introduction of Solana Mobile highlights its commitment to mobile integration. Currently, Solana Mobile 1 has 20,000 users, and Solana Mobile 2 has over 50,000 pre-orders. This provides DePIN projects with a direct distribution channel to address initial user acquisition challenges. DePIN will continue to be a crucial pillar for Solana’s future development.

Beyond DePIN, Solana’s key strategy is undoubtedly to advance into Web2. In December 2023, the launch of the Firedancer validator paved the way for Solana’s large-scale adoption; earlier, Solana integrated with Paypal, facilitating payment channels. With the emergence of new technologies like Actions, Blinks, and ZK Compression, Solana is further progressing towards large-scale adoption.

Overall, Solana boasts technical advantages such as high performance. As its technology matures, Solana’s next step is primarily focused on achieving large-scale applications. Currently, Solana’s series of actions are aimed at continuously lowering the development barriers for developers and the usage threshold for users.

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