Solana’s Firedancer Compute Unit Challenge - Could This Unlock Block Limits?
Solana tackles its biggest scalability hurdle head-on with Firedancer's compute unit limitations.
The Network Bottleneck Breakthrough
Firedancer's current compute unit restrictions represent Solana's most significant technical barrier - but also its greatest potential breakthrough. The team's working to push these limits beyond current constraints, potentially unlocking unprecedented transaction throughput.
Blockchain Without Boundaries
If successful, this could eliminate Solana's primary scaling bottleneck entirely. We're talking about removing artificial caps that have constrained network performance since inception. The development team's racing against network demand that grows faster than traditional blockchain architecture can handle.
Meanwhile, traditional finance keeps building taller skyscrapers while crypto builds faster elevators - one actually moves people where they need to go.
Image source: Getty Images.
A major overreaction
After it released second-quarter earnings,(TTD 0.83%) dropped like a rock. And after falling nearly 40% the day after earnings, the stock has continued to decline. In fact, as of this writing, The Trade Desk is 67% below its 52-week high.
There were a few things that spooked investors about The Trade Desk's second-quarter earnings:
- The company issued weaker-than-expected guidance for the third quarter.
- The CFO abruptly left the company.
- Reports indicate that Amazon's adtech platform could take market share from The Trade Desk.
To put it mildly, none of these are worthy of a massive drop in the stock price. The third-quarter guidance called for 14% year-over-year growth, a significant deceleration from 19% in the second quarter. But excluding the positive tailwinds The Trade Desk got from election-focused advertising in 2024, the guidance WOULD represent 18% growth, just 1 percentage point lower than the previous quarter.
As far as the Amazon threat is concerned, there's not much evidence to show that the e-commerce giant is successfully stealing customers. CEO Jeff Green clarified in the company's conference call, claiming that the overlap between the two companies' business is small, and The Trade Desk views Amazon as more of a partner. Finally, the CFO departure doesn't appear connected to any major issues with the business.
In short, this was a massive overreaction in the stock of a great business. I've been on the fence with The Trade Desk for some time, but at the current price I'm about ready to pull the trigger.
An amazing track record
Specialty insurance company(KNSL 1.01%) has an excellent history of delivering strong results for investors. In fact, since it went public about a decade ago, Kinsale has generated positive returns in every single year and has handily beaten the S&P 500. It's tough to overstate how rarely investors get a chance to buy it after a 20% pullback, but that's exactly what is happening right now.
The second quarter's numbers show that this specialty insurer's growth story is still intact. Earnings per share (EPS) grew by 45% year over year, thanks to a combination of 30% growth in net investment income and a 5% increase in gross written premiums, plus the expansion of Kinsale's underwriting margin by 190 basis points compared with a year ago.
To be sure, there are some concerns. For example, gross written premiums in the commercial property division declined by 17% year over year due to "lower rates and increased competition." But Kinsale still has a massive market opportunity, an impressive technology advantage, and a laser-focus on specialty insurance for smaller businesses.
There could be rough seas ahead
To be perfectly clear, I think both The Trade Desk and Kinsale Capital are fantastic businesses and that investors who buy at these levels will be handsomely rewarded over the long run. But I have no idea what these two stocks will do over the coming weeks or months, and there could be significant volatility ahead. So, if you buy, buy for the long term.
