From Singapore to Solana: Rebalancing Efficiency, Prosperity, and Cost

Author: danny

Title: Reassessing Public Chain Ecosystems with Governance Logic: Lessons from Singapore’s Prosperity and Costs in Solana’s Ecosystem Transformation

When we talk about public chains during a bear market, what are we discussing? Price? Community? Governance? At a deeper level, the core issue is: operating a public chain is essentially governing a digital nation. Tokens are currency, developers are citizens, DApps are industries, and on-chain governance is government. If we re-examine Solana’s development from a governance perspective, many seemingly accidental decisions reveal clear logic behind them.

Introduction: No One Is Born Strong

On August 9, 1965, Lee Kuan Yew cried on television. Singapore was expelled from Malaysia, becoming a tiny island nation without hinterland, resources, or military. No one believed it could survive.

On November 11, 2022, FTX filed for bankruptcy. Solana’s TVL evaporated over 75% in a week, and SOL’s price plummeted from $32 to $8. The entire crypto community’s consensus: “Solana is finished.”

The beginnings of these two stories are astonishingly similar: a discarded small entity struggling in an hostile environment. Their subsequent paths—dependent, then surviving in gray areas, then transforming and upgrading—are almost mirror images.

This article aims to explore not price or community, but a deeper question: operating a public chain is fundamentally governing a digital nation. Tokens are currency, developers are citizens, DApps are industries, and on-chain governance is government. Viewing Solana’s history through a governance lens reveals that many seemingly random decisions are actually driven by clear logic.

Chapter 1: The British Army Era—SBF and FTX’s Protective Umbrella

Singapore’s British Army Economy

In its early independence, Singapore’s economy relied heavily on the consumption and employment generated by the British military presence. The British bases contributed about 20% of GDP at the time. Singapore was aware of this dependency’s fragility, but as a nascent state, it had no qualification to choose its clients. Survival was the top priority.

In 1968, Britain announced it would withdraw all troops east of the Suez Canal by 1971. This was a death blow for Singapore’s economy. Yet, it was precisely this “abandonment” that forced Singapore to seriously consider: if the protective umbrella disappears, what can I rely on to survive?

Solana’s SBF Era (2020-2022)

Solana’s mainnet launched in March 2020, but what truly made it stand out among many “Ethereum killers” was Sam Bankman-Fried and his empire. FTX and Alameda Research were not only the largest funders of the Solana ecosystem but also its credit backers. Early core projects like Serum, Raydium, Maps.me involved deep FTX capital.

During this period, Solana’s ecosystem resembled Singapore under British military occupation: seemingly prosperous, with impressive data (TVL once exceeded $12 billion), but its foundation was fragile. Much of the on-chain activity was driven by Alameda’s market-making funds circulating within the ecosystem; genuine organic demand was far less healthy than the data suggested.

Singapore depended on British consumption; Solana depended on SBF’s capital. Both share a common trait: the prosperity was real, but its source was external, centralized, and potentially fleeting.

The Collapse of the Protective Umbrella

In November 2022, FTX collapsed from the world’s second-largest exchange into ruins within 72 hours. The impact on Solana was systemic: Serum’s governance keys were controlled by FTX, causing project paralysis; many ecosystem projects’ treasury assets were frozen within FTX; SOL staking concentration issues surfaced; market confidence evaporated, and developers began to flee.

This was Solana’s “1968 moment.” The protective umbrella was not gradually withdrawn but was blown apart overnight.

Chapter 2: How a Small Country Survives Without Resources—Solana’s Innate Endowments

Singapore’s “Unique Resource”: Geographical Location

Singapore has no oil, no minerals, even freshwater must be imported from Malaysia. But it has one gift from heaven: the strategic choke point at the Malacca Strait. About 25% of global maritime trade passes through here. Lee Kuan Yew understood early: I don’t need resources; I just need to become the best node for resource flow.

Solana’s “Unique Resource”: Performance and Cabal

In the public chain world, Solana lacks Ethereum’s first-mover advantage, Bitcoin’s mythic narrative, or Cosmos’s modular flexibility. But it has one thing: native-layer extreme performance. 400ms block time, theoretical peak 65,000 TPS, very low transaction fees (usually below $0.001).

This is not an insignificant technical parameter. Just as Malacca Strait’s geography made Singapore a trade hub, Solana’s performance characteristics make it naturally suited for high-frequency, small-value, massive on-chain activity.

Geography for Singapore is like block time and transaction cost for Solana: they are the entry tickets that make cabal participants willing to compete here.

Chapter 3: Survival Wisdom in the Gray Zone—From Money Laundering Port to Meme Casino

Singapore’s “Not-So-Glorious” Middle Stage

This is often glossed over in official narratives. During Singapore’s rapid development from the 1970s to the 1990s, its rise as a regional financial center was not solely due to the “clean and efficient” reputation.

A harsh reality was: in Southeast Asia at that time, neighboring countries—Indonesia under Suharto, the Marcos family in the Philippines, Myanmar’s military government—generated large amounts of “dirty” money needing a safe, untraceable, predictable legal environment to park. Singapore provided exactly that: strict banking secrecy laws, efficient financial infrastructure, and a tacit attitude of “as long as you follow our rules, we won’t ask where your money comes from.”

Business has no moral judgment, only survival strategies. A resource-scarce small country, in its early stages, had to accept some “imperfect money” to accumulate enough capital for future transformation.

The key is: Singapore never laissez-faire. While attracting funds, it maintained high administrative efficiency and legal certainty (Temasek and GIC are among the top 10 sovereign funds globally). You can bring in gray money, but you cannot disrupt my territory. This “orderly gray” is a delicate balancing act.

Solana’s Meme Season and Pump.fun (2023-2024)

After FTX’s collapse, Solana faced survival pressure comparable to Singapore’s early independence. TVL dried up, developers fled, narratives collapsed. At this point, what it needed was not “correct” growth but “any form” of growth—just to survive.

From late 2023 to 2024, Meme wave swept Solana. Pump.fun lowered Meme creation barriers to nearly zero: anyone could create a token in minutes, no coding or auditing needed. Tokens like BONK, WIF, BOME sparked wealth myths, attracting massive speculative capital.

From a traditional finance or hardcore tech perspective, this was disastrous: the chain was flooded with Rug Pulls (project founders fleeing), Sniper Bots (front-running bots), and countless zeroed-out junk tokens. But if viewed through Singapore’s historical lens, it’s eerily similar and rational:

Meme for Solana is like gray capital for early Singapore—it can’t appear on the tech geek’s grand stage, but it brings three key things:

• Capital inflow (foreign exchange reserves): Meme trading generates huge on-chain transaction volume and fee income, directly supporting validator economics and stabilizing the network.
• User base (population): Millions of new users first encounter Solana wallets (Phantom downloads surged), even if initially just for gambling.
• Infrastructure stress testing (urban development): The extreme transaction load during Meme peak exposed real bottlenecks in Solana’s network, accelerating development of critical infrastructure like Firedancer.

Singapore’s wisdom isn’t in “accepting gray capital,” but in “accepting gray capital while never stopping to build legitimate institutional infrastructure.” Similarly, Solana’s core isn’t Meme itself but whether it can, under Meme frenzy, simultaneously advance genuine foundational development.

Chapter 4: Currency as Sovereignty—Governance Logic of Token Economics

Singapore’s Monetary Policy Philosophy

The Monetary Authority of Singapore (MAS) employs a unique approach: instead of interest rates, it manages the exchange rate band of the Singapore dollar to regulate the economy. An appreciation path suppresses inflation and attracts capital; a depreciation path stimulates exports and maintains competitiveness.

The core logic: currency isn’t static; it must be dynamic and responsive. Printing money, appreciating or depreciating, depends on current economic needs. Excessive issuance dilutes wealth and causes inflation; excessive tightening stifles vitality. Good monetary policy is a continuous balancing act.

SOL’s Token Economics: From Inflation to Deflation in a Dynamic Game

Solana’s token economics has undergone a similar evolution.

Initial inflation phase (quantitative easing): When Solana launched, it set an annual inflation rate of about 8%, decreasing by 15% annually, converging to 1.5%. These newly issued SOLs paid staking rewards, essentially subsidizing validators—like a developing country investing heavily in infrastructure early on, paying a cost to attract “citizens” (validators) to secure the network.

Introducing Burn Mechanism (Contraction Policy): In 2023, Solana introduced a partial burn of transaction fees—50% of the base fee is permanently destroyed. When on-chain activity is high enough, the amount of SOL burned can approach or exceed new issuance, making SOL effectively deflationary.

It’s like a central bank finally having the ability to “raise interest”: when the economy (on-chain activity) is thriving, it can tighten monetary supply by burning tokens to maintain value.

But the problem is: Solana currently lacks a truly dynamic, responsive monetary policy framework. Its inflation rate decreases mechanically along a preset curve, and burn rate depends entirely on market activity—there’s no “smart regulation” like MAS.

This is a deep governance issue unresolved in Solana (and almost all public chains): token issuance and destruction shouldn’t follow a fixed curve but should be dynamically adjusted like a sovereign nation’s monetary policy, based on the network’s “economic cycle.” During congestion (economic overheating), fees should be increased, and tokens burned to curb speculation; during downturns, perhaps staking thresholds should be lowered, and incentives increased.

A truly mature public chain economy needs not a fixed inflation curve but a “central bank” governance mechanism on-chain.

Few understand: tokens don’t only appreciate through destruction.

Chapter 5: Housing Politics—“Only Asset Holders Will Defend the Nation”

Singapore’s Early Crisis: Not Poverty, but Ethnic Divisions

Most discussions of Singapore’s miracle focus on economic growth. But Lee Kuan Yew repeatedly emphasized that the most dangerous enemies at independence weren’t poverty but ethnic rifts.

In 1965, Singapore’s population was about 75% Chinese, 15% Malay, 7% Indian. The three groups spoke different languages, held different beliefs, and mistrusted each other. One trigger for expulsion from Malaysia was the irreconcilable ethnic conflict—during the 1964 racial riots, 23 people died, hundreds injured.

Post-independence, Singapore faced a harsh reality: its people didn’t see themselves as “Singaporeans.” Chinese identified with Chinese culture, Malays with the Malay federation, Indians with India. There was no sense of belonging to “Singapore,” let alone willingness to sacrifice for it.

Lee Kuan Yew’s fundamental challenge was: how to make a group of distrustful people voluntarily stay under one roof and be willing to defend it?

HDB Housing: More Than Just Homes, a Nation-Binding Mechanism

The answer was HDB flats—arguably one of the most ingenious social engineering feats in history.

On the surface, public housing solved a housing shortage. In the 1960s, many Singaporeans lived in shantytowns and slums. The government built large-scale public housing, selling units at well below market prices, and allowed CPF payments for mortgages. Today, over 80% of Singaporeans live in HDB flats.

But the real genius lies in the political logic behind it. Lee Kuan Yew once said frankly (roughly): “When a person owns an asset in a place, they are more willing to defend it.”

HDB’s system achieved at least three strategic goals:

First, creating “stakeholders.” As a tenant, your connection to the city’s fate is weak—you can just move out. But owning a home ties your wealth to the nation’s destiny. When property prices rise, your net worth increases; when the country falters, your assets shrink. Every HDB owner becomes a “shareholder” in Singapore’s future.

Second, enforced ethnic integration. This is the least appreciated design of HDB. The Ethnic Integration Policy (EIP) sets quotas for Chinese, Malay, and Indian residents in each community, preventing ethnic enclaves. Your neighbors are diverse. Children play together in the same buildings, attend the same schools. Over generations, physical mixing dissolves racial barriers.

Third, linking personal wealth to governance quality. The appreciation of HDB flats depends on Singapore’s continued prosperity and good governance. Well-managed development and infrastructure lead to rising property values. This creates a powerful positive feedback loop: citizens support good governance because it directly enhances their assets.

A set of HDB flats accomplishes “binding interests—eliminating divides—motivating governance” in one stroke. It’s not just housing policy but a cornerstone of the nation. To defend the country externally, internal stability must be secured first—Lee Kuan Yew understood this deeply.

Solana’s “Ethnic Problem”: Divided Communities

Turning back to Solana, the community after FTX’s collapse faces divisions comparable to Singapore in 1965.

At least three “ethnic groups” exist on-chain, with sharply different interests:

Speculators and Meme players. They are the largest contributors to Solana’s on-chain activity, bringing volume, fees, and buzz. But they lack loyalty; they chase hot topics across chains—essentially a mobile population.

Native developers and builders. They invest significant time and technical capital into DeFi protocols, infrastructure tools, DePIN projects. They need Meme speculation for user traffic but also dislike it for lowering ecosystem seriousness—relationships are delicate and tense.

Validators and stakers. They are the backbone of network security, investing hardware and staking capital. They care about network stability, staking yields, and long-term SOL value. They are indifferent or even opposed to short-term hype.

The tension among these groups is divisive. Meme players complain about prioritization queues during congestion; developers complain Meme siphons attention and funds; validators complain about opaque MEV distribution. Without a mechanism to align these interests, Solana’s community risks further fragmentation.

Where is Solana’s “Housing”?

Lee Kuan Yew’s wisdom—making citizens own assets, binding personal interests to collective destiny—offers lessons for Solana. Some mechanisms resembling “housing” already exist but are far from systemic:

Staking is closest to “housing.” When you stake SOL, your assets are locked, and your rewards depend on network health. Stakers become de facto “shareholders.” But currently, staking is concentrated among whales and institutions; ordinary users’ participation is low—like if HDB flats were only sold to the rich, and the poor remained tenants, the “interest binding” effect diminishes.

Governance tokens and airdrops are a form of “dividing property.” Ecosystem projects airdrop governance tokens (e.g., JTO, JUP) to early users and developers—essentially “distributing assets,” turning spectators into stakeholders. Jupiter’s JUP airdrop reached nearly a million active wallets, creating a large sense of ownership. If designed well, this mechanism can be as effective as housing.

Superteam DAO’s global community is an attempt at “ethnic integration.” Superteam establishes localized communities in different countries, enabling developers from India, content creators from Turkey, DeFi users from Nigeria to collaborate under one framework. It’s akin to EIP quotas—structured mixing to reduce factionalism.

What Solana still lacks is a truly systemic “asset binding—interest alignment” mechanism. Imagine a refined system where:

• Validators earn ongoing protocol revenue from deployed applications, aligning their interests with long-term success.
• Active users accumulate on-chain “citizenship” or “trust” through long-term engagement.
• Rewards for validators are tied to their service reliability and decentralization contribution.

In such a system, every participant’s personal wealth would be tightly linked to Solana’s overall prosperity.

When speculators, developers, and validators become “owners” rather than “renters,” they will genuinely fight for the chain’s long-term interests. This is the deepest lesson Lee Kuan Yew taught us with housing: people won’t fight for abstract ideals but will for their assets.

Chapter 6: The Crossroads of Transformation—“What’s Next?”

Singapore’s Three Transitions

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

First (1960s-1970s): Labor-intensive manufacturing. Attracting multinationals with low-cost labor, earning foreign exchange, solving employment. The “survival” phase.

Second (1980s-1990s): Financial and trade hub. Leveraging location and制度优势，成为区域资金集散地和航运枢纽。灰色资金在此扮演重要角色。这是“站稳脚跟”的阶段。

Third (2000s onward): Knowledge economy and high-end manufacturing. Heavy investment in education, talent attraction (Global Talent Scheme), biotech, semiconductors, fintech. Tightening AML regulations, gradually “cleaning” the financial system. This is the “self-definition” phase.

Each leap is not natural but occurs before old profits are exhausted, proactively shifting to new models. It requires strong strategic resolve and political will—because transformation means sacrificing some current benefits.

Solana’s Current Position: Near the End of the Second Stage

Using Singapore’s framework, Solana is currently in the late middle of the second stage. The capital and user benefits from Meme wave still persist, but marginal returns are declining. Fatigue over “next 100x Meme” grows. If Solana cannot complete its transformation before this heat dissipates, it risks becoming just a “casino chain”—like if Singapore remained stuck in gray finance, today it might be just another Cayman.

What could Solana’s third stage look like?

I don’t know, but it definitely won’t be AI Agents.

Conclusion: The Fate of Public Chains Is Ultimately Governance

Looking back at Singapore’s story, its success wasn’t luck but consistent, sometimes counterintuitive, decisions aligned with logic and common sense: opening up when needed (even accepting gray capital), regulating when necessary (strict laws to maintain order), transforming when appropriate (even at the cost of current interests).

Solana faces a similar crossroads. Meme hype has provided it with life support and active users, but if it cannot do three things before this wave recedes—establish a dynamic token economic governance mechanism, achieve genuine decentralization to gain institutional trust, and cultivate core industries beyond Meme—it may, like countless “almost succeeded” small nations, hesitate at the window of transformation and be left behind.

The competition among public chains: short-term narrative, medium-term technology, long-term governance.

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

Postscript:

This article uses Singapore’s development as an analogy framework to analyze the Solana ecosystem, aiming to offer a new perspective on public chain governance. The narrative of Singapore is simplified to serve the analogy and does not constitute a comprehensive evaluation of Singapore’s policies.

And yes, you can apply the same comparative framework to other public chains—sure, why not?