Deep Tide Note: At the fifth anniversary of Solana's birth, Dragonfly Capital partner @hosseeb today released a tweet looking back on how he missed the opportunity to participate in Solana's seed round investment at a price of 0.04 USD in 2018, missing out on profits of over a thousand times. Also attached is the original investment memo to express nostalgia. In addition, we have excerpted the discussion between Solana co-founder Toly and Hosseeb under this tweet.
Here is the original text details:
I turned down the opportunity to participate in @solana's seed round investment at 0.04 USD in early 2018.
Based on the current price, it is equivalent to missing out on a return of 3250 times.
Solana is one of the first projects I evaluated as a junior VC. At that time, I was still cute, naive, and confident, writing memos for every project that I gave up investing in.
Rereading this memo now is like a 'peak junior VC cringe' moment. At that time, we were all obsessed with finding the 'Ethereum killer', researching consensus protocols, and what technology would replace EVM / eWASM.
So, this is the completely unedited original memo - the worst investment MISS of my career.
Happy birthday, Solana!🎂
Memo content
After reading the white paper, my shorthand is as follows:
Their major innovation is Proof of History (PoH). Essentially, this is a verifiable time-delay function that uses sequential hashing, similar to sequential proof of work. In other words, a timekeeper is selected to continuously iterate hash calculations on a value and publish all intermediate hash values. As this process must be executed serially on a single core and cannot be parallelized, nodes should be able to predict the amount of time between consecutive hashes (presumably based on their understanding of hardware performance?).
The PoH node will also incorporate any current state (e.g. transactions to be submitted) into these hashes. This allows for the creation of an event history that can be reliably timestamped.
If the PoH node encounters problems or cannot guarantee online, they have proposed a solution to periodically mix the states of multiple PoH nodes.
A group of validator nodes will replay and verify the operations of PoH nodes (the verification process can be more efficiently parallelized through the MapReduce architecture). These validators reach consensus using PoS through a protocol similar to Casper. If a Byzantine problem or improper behavior is found in a PoH node, validator nodes can elect a new PoH node to replace it.
It looks like they will develop payment and smart contract functionality.
They claim to achieve 71,000 TPS and have achieved 35,000 TPS on a single-node test network.
My idea:
Their numbers are completely nonsense. 710,000 TPS is ridiculous; even Google's search volume per second is less than 100,000. This data is placed in the most prominent position on their website, which makes me very alert.
Withdraw the previous praise for the good writing of the white paper. The high-level content is good, but the technical details are very lacking and vague. As a description of a consensus protocol, the rigor is disappointing.
The team is mainly composed of Qualcomm's low-level engineers. The CEO and CTO are mainly engaged in operating systems, embedded systems, GPU optimization, and compiler work. Their background in distributed systems and cryptography is clearly insufficient, which is evident in the paper. The handling of the Byzantine fault tolerance problem is very poor. It reminds me of the whitepaper of Raiblocks/Nano (they are also low-level engineers).
And the content like this in the white paper makes me doubtful:
[Solana Whitepaper Original Text, Section 5.12]
"PoH allows network validators to observe past events and their timing to some degree of determinism. As the PoH generator produces a stream of messages, all validators need to submit their signatures on the state within 500ms. This value can be further reduced based on network conditions. Since each validation is input into the stream, everyone on the network can verify whether all validators have submitted their votes within the specified timeout period without directly observing the voting process."
This is not a consensus protocol. Assuming that limiting 500ms for consensus on message delivery is quite problematic, and it does not make sense to achieve Byzantine fault tolerance. And how do they measure 500ms? Considering that they will estimate the passage of time based on the number of iterative hashes executed, how do other nodes in the system reach consensus on the passing of 500ms? In addition, how will they address the deviation in clock speed over time caused by hardware improvements, hardware failures, or noise? Time issues in distributed systems are very complex, and I don't think they realize how difficult it is.
Besides, who cares about time? Is this a big issue in the blockchain space? Are people not satisfied with the granularity of 15 seconds/1 second (such as DFINITY)? I don't think it's a problem. The complexity and confusion they introduced in the protocol don't seem to bring much value.
They have a section specifically discussing the issue of attacks and incentives not aligning. Their response to the attack is completely unconvincing and lacks rigor or detailed explanation.
They have a whole section discussing proof of replication, just like Filecoin. What's going on? Tell me about your consensus protocol and how transactions and accounts are implemented, what features your blockchain will have. I don't care about data storage proof.
There is another long section that begins to describe smart contracts, but only mentions that they will use LLVM as the backend to support multiple platforms. But nothing else is mentioned besides that.
A lot of content about GPUs and parallelism. This exposes a strange sense of focus — if they need to implement a BFT consensus protocol and an available smart contract platform, they should not be obsessed with parallel processing of their data packet format. I remember that this is also the case in the demos I have seen — spending most of the time discussing how to use these nodes for optimization, and almost no time actually describing their consensus protocol.
Conclusion: I will absolutely not invest in this project
Interestingly, 5 years later, when Haseeb @hosseeb tweeted his blessings for Solana's success in the crypto world and joked about how he missed a great opportunity when he was young and inexperienced, Solana co-founder Toly @aeyakovenko replied to this tweet: "All your concerns back then were indeed valid. Essentially, this is a bet - a bet on whether we can maintain underlying advantages that other teams lack while resolving these issues."
Then Haseeb replied to Toly: "I think this is the lesson. Your persistence in optimizing the underlying and unique attack angles is not possessed by other teams. It is most important to play to your strengths and avoid weaknesses to the extreme. I had no idea about this at that time."
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
Dragonfly Partners: How Did I Miss the Opportunity to Invest in Solana Seed Round?
Original author: @hosseeb
Compiled by: DeepTech TechFlow
Deep Tide Note: At the fifth anniversary of Solana's birth, Dragonfly Capital partner @hosseeb today released a tweet looking back on how he missed the opportunity to participate in Solana's seed round investment at a price of 0.04 USD in 2018, missing out on profits of over a thousand times. Also attached is the original investment memo to express nostalgia. In addition, we have excerpted the discussion between Solana co-founder Toly and Hosseeb under this tweet.
Here is the original text details:
I turned down the opportunity to participate in @solana's seed round investment at 0.04 USD in early 2018.
Based on the current price, it is equivalent to missing out on a return of 3250 times.
Solana is one of the first projects I evaluated as a junior VC. At that time, I was still cute, naive, and confident, writing memos for every project that I gave up investing in.
Rereading this memo now is like a 'peak junior VC cringe' moment. At that time, we were all obsessed with finding the 'Ethereum killer', researching consensus protocols, and what technology would replace EVM / eWASM.
So, this is the completely unedited original memo - the worst investment MISS of my career.
Happy birthday, Solana!🎂
Memo content
After reading the white paper, my shorthand is as follows:
Their major innovation is Proof of History (PoH). Essentially, this is a verifiable time-delay function that uses sequential hashing, similar to sequential proof of work. In other words, a timekeeper is selected to continuously iterate hash calculations on a value and publish all intermediate hash values. As this process must be executed serially on a single core and cannot be parallelized, nodes should be able to predict the amount of time between consecutive hashes (presumably based on their understanding of hardware performance?).
The PoH node will also incorporate any current state (e.g. transactions to be submitted) into these hashes. This allows for the creation of an event history that can be reliably timestamped.
If the PoH node encounters problems or cannot guarantee online, they have proposed a solution to periodically mix the states of multiple PoH nodes.
A group of validator nodes will replay and verify the operations of PoH nodes (the verification process can be more efficiently parallelized through the MapReduce architecture). These validators reach consensus using PoS through a protocol similar to Casper. If a Byzantine problem or improper behavior is found in a PoH node, validator nodes can elect a new PoH node to replace it.
It looks like they will develop payment and smart contract functionality.
They claim to achieve 71,000 TPS and have achieved 35,000 TPS on a single-node test network.
My idea:
Their numbers are completely nonsense. 710,000 TPS is ridiculous; even Google's search volume per second is less than 100,000. This data is placed in the most prominent position on their website, which makes me very alert.
Withdraw the previous praise for the good writing of the white paper. The high-level content is good, but the technical details are very lacking and vague. As a description of a consensus protocol, the rigor is disappointing.
The team is mainly composed of Qualcomm's low-level engineers. The CEO and CTO are mainly engaged in operating systems, embedded systems, GPU optimization, and compiler work. Their background in distributed systems and cryptography is clearly insufficient, which is evident in the paper. The handling of the Byzantine fault tolerance problem is very poor. It reminds me of the whitepaper of Raiblocks/Nano (they are also low-level engineers).
And the content like this in the white paper makes me doubtful:
[Solana Whitepaper Original Text, Section 5.12]
"PoH allows network validators to observe past events and their timing to some degree of determinism. As the PoH generator produces a stream of messages, all validators need to submit their signatures on the state within 500ms. This value can be further reduced based on network conditions. Since each validation is input into the stream, everyone on the network can verify whether all validators have submitted their votes within the specified timeout period without directly observing the voting process."
This is not a consensus protocol. Assuming that limiting 500ms for consensus on message delivery is quite problematic, and it does not make sense to achieve Byzantine fault tolerance. And how do they measure 500ms? Considering that they will estimate the passage of time based on the number of iterative hashes executed, how do other nodes in the system reach consensus on the passing of 500ms? In addition, how will they address the deviation in clock speed over time caused by hardware improvements, hardware failures, or noise? Time issues in distributed systems are very complex, and I don't think they realize how difficult it is.
Besides, who cares about time? Is this a big issue in the blockchain space? Are people not satisfied with the granularity of 15 seconds/1 second (such as DFINITY)? I don't think it's a problem. The complexity and confusion they introduced in the protocol don't seem to bring much value.
They have a section specifically discussing the issue of attacks and incentives not aligning. Their response to the attack is completely unconvincing and lacks rigor or detailed explanation.
They have a whole section discussing proof of replication, just like Filecoin. What's going on? Tell me about your consensus protocol and how transactions and accounts are implemented, what features your blockchain will have. I don't care about data storage proof.
There is another long section that begins to describe smart contracts, but only mentions that they will use LLVM as the backend to support multiple platforms. But nothing else is mentioned besides that.
A lot of content about GPUs and parallelism. This exposes a strange sense of focus — if they need to implement a BFT consensus protocol and an available smart contract platform, they should not be obsessed with parallel processing of their data packet format. I remember that this is also the case in the demos I have seen — spending most of the time discussing how to use these nodes for optimization, and almost no time actually describing their consensus protocol.
Conclusion: I will absolutely not invest in this project
Interestingly, 5 years later, when Haseeb @hosseeb tweeted his blessings for Solana's success in the crypto world and joked about how he missed a great opportunity when he was young and inexperienced, Solana co-founder Toly @aeyakovenko replied to this tweet: "All your concerns back then were indeed valid. Essentially, this is a bet - a bet on whether we can maintain underlying advantages that other teams lack while resolving these issues."
Then Haseeb replied to Toly: "I think this is the lesson. Your persistence in optimizing the underlying and unique attack angles is not possessed by other teams. It is most important to play to your strengths and avoid weaknesses to the extreme. I had no idea about this at that time."