Reassessing the Public Blockchain Ecosystem with the Logic of Governance: Solana's Ecosystem Transformation Through the Lens of Singapore's Prosperity and Costs

Author: danny

When we talk about public blockchains during a bear market, what are we discussing? Is it price? Community? Or governance? The more fundamental question is: operating a public blockchain is essentially governing a digital nation. Tokens are currency, developers are citizens, DApps are the industry, and on-chain governance is the government. If we re-examine Solana's development history from a governance perspective, many seemingly accidental decisions have clear underlying logic.

Introduction: No one is born strong-willed.

On August 9, 1965, Lee Kuan Yew shed tears on television. Singapore was "kicked out" of the Federation of Malaysia, becoming a tiny island nation with no hinterland, no resources, and no army. No one believed it could survive.

On November 11, 2022, FTX filed for bankruptcy. Solana's TVL evaporated by more than 75% within a week, and the price of SOL plummeted from $32 to $8. The entire crypto community's thought was: "Solana is finished."

The two stories begin strikingly similarly: a small, abandoned entity struggling to survive in a hostile environment. And the paths they take afterward—from dependence to a gray existence, to transformation and upgrading—are almost mirrored frame by frame.

This article doesn't explore price or community, but rather a more fundamental question: operating a public blockchain is essentially governing a digital nation. Tokens are currency, developers are citizens, DApps are the industry, and on-chain governance is the government. If we re-examine Solana's development history from a governance perspective, many seemingly accidental decisions have clear underlying logic.

Chapter 1: The British Military Era – The Umbrella of the SBF and FTX

British military economy in Singapore

In the early days of independence, one of the lifelines of Singapore's economy was the consumption and employment brought by the British military presence. British military bases contributed approximately 20% of the GDP at the time. Singapore was not unaware of the fragility of this dependence, but for a newly established nation, it had no right to choose its customers. Survival was the top priority.

In 1968, Britain announced it would withdraw all its troops east of the Suez Canal by 1971. This was tantamount to cutting off Singapore's lifeline. But it was precisely this "abandonment" that forced Singapore to seriously consider: if its protective umbrella disappeared, how would it survive?

Solana's SBF Era (2020-2022)

The Solana mainnet launched in March 2020, but what truly set it apart from other "Ethereum killers" was Sam Bankman-Fried and his empire. FTX and Alameda Research are not only the largest investors in the Solana ecosystem, but also its credit backers. Early core projects in the ecosystem, such as Serum, Raydium, and Maps.me, almost all had deep involvement from FTX-backed capital.

The Solana ecosystem at this time resembled Singapore during the British occupation: outwardly prosperous, with impressive data (TVL once exceeding $12 billion), but its foundation was fragile. A large amount of on-chain activity came from Alameda's market-making funds circulating within the ecosystem, and the real organic demand was far less healthy than the data suggested.

Singapore relied on British military spending, while Solana relied on SBF funding. Both shared the characteristic of real prosperity, but the sources of that prosperity were exogenous, concentrated, and potentially fleeting.

The collapse of the protective umbrella

In November 2022, FTX went from being the world's second-largest exchange to a pile of ruins in 72 hours. The impact on Solana was systemic: FTX gained control of Serum's governance keys, directly paralyzing the project; a large number of ecosystem projects' national treasury assets were frozen within FTX; Solana's staking concentration problem was exposed; market confidence plummeted, and developers began to leave.

This is Solana's "1968 moment." The protective umbrella wasn't withdrawn gradually; it was blown up overnight.

Chapter Two: How a Small Country Without Resources Survives—Solana's Underlying Nature

Singapore's "only resource": its geographical location

Singapore has no oil, no minerals, and even imports fresh water from Malaya. But it has one gift from nature: its strategic location at the choke point of the Strait of Malacca. Approximately 25% of global maritime trade passes through here. Lee Kuan Yew understood this early on: I don't need to own resources; I only need to be the optimal node for resource flow.

Solana's "sole resource": performance and cabal

In the world of public blockchains, Solana lacks Ethereum's first-mover advantage, Bitcoin's narrative myth, and Cosmos's modular flexibility. But it has one thing: extreme performance at the native layer. 400 milliseconds block time, a theoretical peak of 65,000 TPS, and extremely low transaction fees (typically below $0.001).

This is not a dispensable technical parameter. Just as the geographical location of the Strait of Malacca determined that Singapore could become a trade hub, Solana's performance characteristics make it naturally suitable for carrying high-frequency, small-amount, and massive on-chain activities.

For Singapore, geographical location is like block generation speed and transaction costs for Solana: it's the ticket that makes cabals willing to come here to compete.

Chapter 3: The Survival Wisdom of the Gray Area—From Money Laundering Ports to Meme Casinos

Singapore's "Less Glorious" Middle Phase

This is a period of history that is often downplayed in Singapore's official narrative. During its period of rapid development from the 1970s to the 1990s, Singapore's ability to become a regional financial center was not entirely due to its reputation for "cleanliness and efficiency."

A harsh reality was that during that era in Southeast Asia, neighboring countries—the Suharto regime in Indonesia, the Marcos family in the Philippines, and the military junta in Burma—generated vast amounts of capital that needed to be "cleaned." This money needed a safe haven, a place where its origins were not questioned, and where the legal system was predictable. Singapore provided just such an environment: strict bank secrecy laws, efficient financial infrastructure, and an unspoken, pragmatic attitude of "as long as you follow my rules, I won't investigate where your money came from."

Business has no moral judgments, only survival strategies. A small country without resources must accept some "imperfect money" in the early stages in order to accumulate enough capital stock to lay the foundation for future transformation.

The key is that Singapore has never let things run wild. While attracting investment, it has consistently maintained extremely high administrative efficiency and legal certainty (Temasek and GIC are among the world's top 10 sovereign wealth funds). You can bring in grey money, but you can't cause chaos on my turf. This "orderly grey" is an extremely delicate balancing act.

Solana's Meme Season with Pump.fun (2023-2024)

Solana, after FTX's collapse, faced survival pressures no less severe than Singapore's early days as an independent company. TVL (TVL) dwindled, developers left, and the narrative crumbled. At this point, what it needed wasn't "correct" growth, but "any form" of growth—survival first.

From the end of 2023 to 2024, the meme wave swept through Solana. The emergence of Pump.fun lowered the barrier to meme issuance to almost zero: anyone could create a token in minutes, without code or auditing. The wealth-creating myths of memes like BONK, WIF, and BOME attracted a large influx of speculative funds.

From the perspective of traditional finance or technological fundamentalism, this is nothing short of a disaster. The Solana chain is rife with Rug Pulls, Sniper Bots, and countless worthless tokens that have gone to zero. However, if we understand it through the historical framework of Singapore, we find striking similarities, and even a degree of plausibility:

Meme was to Solana what grey market funding was to early Singapore—it couldn't reach the mainstream tech geek scene, but it brought three key things:

• Capital inflow (foreign exchange reserves): Meme transactions brought a massive amount of on-chain transaction volume and fee revenue, which directly enriched the validators' economic model and stabilized the basic operation of the network.

• User base (population): Millions of new users were exposed to the Solana wallet for the first time (Phantom downloads surged during this period), even if they initially came to gamble.

• Infrastructure stress testing (city construction): The extreme transaction load during peak Meme periods exposed the true bottlenecks of the Solana network, forcing the accelerated development of critical infrastructure such as the Firedancer client.

Singapore's wisdom lies not in "accepting grey market funds," but in "never ceasing to build legitimate institutional infrastructure while accepting grey market funds." Similarly, the key to Solana lies not in the memes themselves, but in whether it simultaneously promoted truly valuable underlying infrastructure development under the cover of the meme craze.

Chapter Four: Money is Sovereignty – The Governing Logic of Token Economics

Singapore's monetary policy philosophy

The Monetary Authority of Singapore (MAS) employs a unique monetary policy among global central banks: instead of using interest rates as its primary tool, it regulates the economy by managing the Singapore dollar's exchange rate band. An appreciation band is used to curb inflation and attract capital; a depreciation band is used to stimulate exports and maintain competitiveness.

The core logic is that currency is not static; it must be dynamic and responsive. How much money is printed, and whether it appreciates or depreciates, depends on the needs of the current economic cycle. Excessive money printing dilutes national wealth and triggers inflation; excessive tightening stifles economic vitality. Good monetary policy is a continuous balancing act.

SOL's Token Economics: A Dynamic Game from Inflation to Deflation

Solana's token economics has also undergone a similar evolution.

Initial inflation phase (quantitative easing): When the Solana mainnet launched, an annual inflation rate of approximately 8% was set, decreasing at a rate of 15% per year, with a long-term target converging to 1.5%. These newly issued SOL tokens are used to pay staking rewards, essentially a form of "fiscal expenditure" to subsidize validators—similar to how emerging countries invest heavily in infrastructure in their early stages, you must first incur costs to attract "citizens" (validators) to stay and maintain cybersecurity.

Introducing a burning mechanism (deflationary policy): In 2023, Solana introduced a partial burning mechanism for transaction fees—50% of the base fee for each transaction is permanently burned. When on-chain activity is sufficiently high, the amount of SOL burned may approach or even exceed the amount newly issued, putting SOL into a de facto deflationary state.

This is like a country's central bank finally having the ability to "raise interest rates": when the economy (on-chain activity) is prosperous enough, it maintains the value of the currency by withdrawing the money supply.

The problem is that Solana currently lacks a truly dynamic, responsive monetary policy framework. Its inflation rate decreases mechanically along a pre-defined curve, and its burn rate depends entirely on market activity; there is no "smart adjustment mechanism" like the MAS between the two.

This is a deep-seated governance issue that Solana (and almost all public blockchains) has yet to resolve: the issuance and burning of tokens should not be a fixed curve, but rather dynamically adjusted according to the network's "economic cycle," much like the monetary policy of a sovereign nation. When the network is congested (overheated economy), the fee burning ratio should be increased to curb speculation; when the network is sluggish (economic recession), perhaps the staking threshold for validators should be lowered to increase incentives.

A truly mature public blockchain economy does not need an inflation curve hard-coded into the code, but rather an on-chain "central bank" governance mechanism.

Few understand that tokens do not only appreciate in value when they are destroyed.

Chapter 5: HDB Politics – "Only those with assets can protect the nation"

The real crisis in Singapore's early years was not poverty, but the sense of division between its various ethnic groups.

When most people talk about the Singapore miracle, they focus on economic growth. But Lee Kuan Yew himself repeatedly emphasized that the most dangerous enemy in the early days of nation-building was not poverty, but racial division.

In 1965 Singapore, Chinese comprised approximately 75% of the population, Malays about 15%, and Indians about 7%. These three groups spoke different languages, held different faiths, and harbored mutual suspicion. One of the triggers for Singapore's expulsion from the Federation of Malaysia was the irreconcilable racial tensions between the Chinese and Malays—the racial riots of 1964 resulted in 23 deaths and hundreds of injuries.

Post-independence Singapore faced a harsh reality: the island's inhabitants didn't consider themselves "Singaporeans." Chinese identified with Chinese culture, Malays identified with the Malay Commonwealth, and Indians were attached to India. No one felt a sense of belonging to the concept of "Singapore," let alone a willingness to sacrifice for it.

The fundamental problem Lee Kuan Yew needed to solve was: how to get a group of people who distrust each other to voluntarily stay under the same roof and be willing to make sacrifices to maintain that roof?

HDB flats: More than just houses, they are a national ties mechanism

The answer is HDB flats—possibly one of the most ingenious social engineering projects in human history.

On the surface, public housing (HDB flats) solves the housing problem. In 1960s Singapore, a large number of people lived in shantytowns and slums. The government built public housing on a large scale, selling it to citizens at prices far below market value, and allowing them to use their Central Provident Fund (CPF) to pay for mortgages. Today, more than 80% of Singaporeans live in HDB flats.

But the true brilliance of HDB flats lies in the political logic behind them. Lee Kuan Yew once said something extremely frank (paraphrased): "A person who owns assets in a place is more willing to defend them."

The public housing system has achieved at least three strategic goals simultaneously:

First, create "stakeholders." When you're just a tenant, the rise and fall of a city doesn't really affect you—you can simply move away. But when you own a house, your wealth is tied to the fate of the country. Rising property prices increase your net worth; national turmoil reduces your assets. Every HDB owner becomes a "shareholder" in Singapore's destiny.

Second, mandatory racial integration. This is the most underestimated design element of the HDB (Housing and Development Board) system. HDB implements a strict ethnic integration policy: there are caps on the proportion of Chinese, Malays, and Indians in each HDB community, ensuring that no single-race area is created. Your neighbors will definitely be different from yours. Children play downstairs in the same building and attend the same school. After a generation, racial barriers are slowly dissolved by the forced mixing of physical spaces.

Third, it links personal wealth to the quality of national governance. The appreciation of public housing (HDB flats) depends on Singapore's continued prosperity and good governance. Good government governance, developed locations, and comprehensive amenities lead to increased property value. This creates a powerful positive feedback loop: citizens are incentivized to support good governance because it directly enhances their asset value.

A single public housing unit simultaneously accomplishes three tasks: "aligning interests, eliminating barriers, and incentivizing governance." This is not merely a housing policy, but a cornerstone of the nation. Lee Kuan Yew understood the principle that "internal stability must precede external defense."

Solana's "Race Issues": A Divided Community

Let's shift our focus back to Solana. The Solana community after the collapse of FTX faced a level of division comparable to that of Singapore in 1965.

There are at least three "groups" on the blockchain, each with drastically different interests:

Speculative traders and meme enthusiasts are the biggest contributors to activity on the Solana chain, driving trading volume, fees, and buzz. However, they lack loyalty to Solana, switching to whichever chain is trending, essentially making them a transient population.

Native developers and builders. They've invested significant time and technical capital in Solana, building DeFi protocols, infrastructure tools, and DePIN projects. Their relationship with meme speculators is delicate and tense—they both need (users and traffic) and dislike (they lower the seriousness of the ecosystem).

Validators and stakers are the cornerstone of cybersecurity, investing real money in hardware and staking capital. They care about network stability, staking yield, and the long-term value of SOL, and neither participate in nor care about short-term speculation.

The competitive tensions among these three groups are fractured. Meme players complain that priority queues are unfair to retail players during network congestion; developers complain that memes are siphoning off all attention and funds; and validators complain about the lack of transparency in the MEV allocation mechanism. Without a mechanism to align the interests of these three parties, the centrifugal force within the Solana community will only intensify.

Where are the HDB flats in Solana?

What lessons can Solana learn from Lee Kuan Yew's wisdom—allowing citizens to own assets and tying individual interests to the collective destiny? While some mechanisms similar to "HDB flats" already exist within the Solana ecosystem, they are far from being systematic.

Staking is the closest design to "HDB flats." When you stake Solana (SOL), you lock your assets in the network, and your returns directly depend on the network's healthy operation. Stakers naturally become "shareholders" of the network's security. However, currently, Solana's staking is mainly concentrated in the hands of large investors and institutions, with insufficient participation and engagement from ordinary users—this is like if HDB flats are only sold to the rich, while the poor remain tenants, then the effect of "shared interests" will be greatly reduced.

Governance tokens and airdrops are a form of "housing allocation." When ecosystem projects airdrop governance tokens to early users and developers (such as JTO and JUP airdrops), they are essentially "distributing assets"—turning participants from bystanders into stakeholders. Jupiter's JUP token airdrop covered nearly a million active wallets, creating a large number of "owners" with a sense of belonging to the Jupiter protocol in a short period of time. If designed properly, this mechanism can be as effective as public housing.

Superteam DAO's global community is an attempt at "ethnic integration." Superteam establishes localized communities in different countries and regions, allowing developers from India, content creators from Turkey, and DeFi users from Nigeria to collaborate within the same organizational framework. This is somewhat similar to HDB's ethnic quota system—reducing cliques and factions through structured mixing.

However, what Solana lacks is a truly systematic "asset-bonding-benefit alignment" mechanism. Imagine a more complete version: if the Solana ecosystem could establish a system that allows developers to receive continuous protocol-level revenue sharing for successfully deploying applications on-chain; allow active users to accumulate some kind of non-transferable "on-chain credit" or "citizenship" through long-term use; and link validator rewards to the reliability of their services and their decentralized contributions—then the personal wealth of every participant would be closely tied to the overall prosperity of Solana.

When speculators, developers, and validators all become "owners" rather than just "tenants," they will be truly willing to fight for the long-term interests of the blockchain. This is the most profound lesson Lee Kuan Yew taught us with a set of HDB flats: people won't risk their lives for abstract ideals, but they will fight tooth and nail for their assets.

Chapter Six: At the Crossroads of Transformation – "What's Next?"

Singapore's Three Leaps

Singapore's economic transformation can be roughly divided into three stages:

Phase 1 (1960s-1970s): Labor-intensive manufacturing. Utilizing low-cost labor to attract multinational corporations to set up factories, earning foreign exchange, and creating jobs. This was the "survival" phase.

The second phase (1980s-1990s): Financial and trade hub. Leveraging its geographical location and institutional advantages, it became a regional center for capital distribution and shipping logistics. Gray market capital played an indispensable role in this phase. This was the stage of "establishing a foothold."

The third stage (2000s to present): Knowledge economy and high-end manufacturing. Significant investment in education, talent acquisition (global talent programs), and development of high-value-added industries such as biomedicine, semiconductor design, and fintech. Simultaneously, tightening anti-money laundering regulations to gradually "launder" the financial system. This is the stage of "defining oneself."

Every leap forward doesn't happen naturally; rather, it's a proactive shift to a new model before the profits from the old one have been exhausted. This requires extremely strong strategic resolve and political will—because transformation means voluntarily giving up some current benefits.

Solana's current location: the end of stage two

If we use Singapore's framework for positioning, Solana is currently in the late stage of its second phase. The funding and user dividends brought by the meme wave are still there, but the marginal effect has begun to diminish. Market fatigue with the "next 100x meme" is increasing, and if Solana cannot complete its transformation before this wave of hype fades, it may become a "casino chain"—just as if Singapore had remained in the gray finance stage, it might just be another Cayman Islands today.

What might Solana's third phase be?

I don't know either, but it's definitely not some kind of AI agent.

In conclusion: The fate of public blockchains ultimately depends on the fate of their governance.

Looking back at Singapore's story, its success was not due to good luck, but because at every crucial juncture, it made counterintuitive yet logical and common-sense decisions: opening up when it should have opened up (even if it accepted illicit funds), controlling when it should have controlled (using strict laws and regulations to maintain order), and transforming when it should have transformed (even if it meant sacrificing current interests).

Solana stands at a similar crossroads. The meme craze has given it the ammunition to survive and a large active user base, but if it cannot accomplish three things before this wave of dividends fades—establishing a dynamic token economic governance mechanism, achieving true decentralization to win institutional trust, and cultivating a core industrial ecosystem beyond memes—then it may, like countless small countries in history that "almost succeeded," hesitate during the window of opportunity for transformation and ultimately be eliminated by the times.

Competition among public blockchains depends on narrative in the short term, technology in the medium term, and governance in the long term.

Tokens are not just price symbols; they are the currencies of digital nations. And monetary policy is never a fixed curve, but an art of balance, timing, and restraint.

postscript:

This article uses Singapore's development history as an analogy to analyze the Solana public blockchain ecosystem, aiming to provide a new perspective on public blockchain governance. The historical narrative of Singapore has been simplified to serve the analogy and does not constitute a comprehensive evaluation of Singapore's policies.

Also, you asked if the same comparison framework is used for other public chains. Sure, why not?