Introduction

As the blockchain ecosystem matures, companies developing financial products on Solana and emerging Solana Virtual Machine (SVM) blockchains, such as the new FOGO chain, face increasingly complex challenges. These challenges are not just technical but also regulatory, as recent U.S. Treasury and IRS regulations place higher demands on digital asset reporting and compliance.

Solana’s architectural characteristics, including its parallel processing capabilities, non-EVM structure, and massive transaction throughput, are at the heart of the problem. Similarly, SVM chains, designed to push blockchain performance to its limits, introduce even greater complexities. As these networks evolve, developers aiming to create TradFi-like experiences on them must contend with massive data volume and complexity. The need for precise, TradFi-grade record-keeping is no longer optional but essential for survival in this space.

This report examines the architectural challenges of Solana and other SVM chains, the rising expectations for financial reporting, the implications of new regulatory frameworks, and how NODE40’s capabilities address these pain points.

Solana’s Architectural Challenges

One of Solana’s defining features is its high-speed performance. Blocks are produced approximately every 400 milliseconds, handling thousands of transactions per second. This design choice, while boosting efficiency, results in an enormous volume of data. In just its first 5 years, Solana had processed over 408 billion transactions, with the blockchain size on disk over 300 TB. In comparison, Bitcoin’s entire blockchain, accumulated over 15 years, is under 1 TB. Managing this immense data volume manually is impractical, and even automated systems often require significant engineering effort. Operating a full Solana archive node can cost around tens of thousands of dollars per month just in cloud storage fees.

But it’s not just the sheer amount of data that poses challenges; it’s also how the data is structured and processed. Unlike  EVM models, which handle smart contracts in a linear, single-threaded fashion, Solana’s Sealevel runtime executes tens of thousands of instructions in parallel. This means a single transaction on Solana can trigger multiple smart contract / program interactions simultaneously. For example, a DeFi trade might involve liquidity pool adjustments, fee payments, and token swaps, all bundled into one atomic operation. Parsing and categorizing such multi-part transactions into traditional accounting formats is a formidable challenge.

Further complicating matters is Solana’s use of Program Derived Accounts (PDAs). These accounts are dynamically generated to store state or hold assets. Tracking these linked accounts is essential for complete financial reporting. Relying on a single wallet address to represent a user’s financial activities inevitably leads to incomplete and inaccurate records.

Another challenge lies in Solana’s slot and block structure. Due to the network’s ultrafast consensus, some slots are skipped when validators do not produce a block. This results in irregular block heights, making it difficult for systems that expect a continuous block sequence. Accurate timestamp mapping and consistent transaction retrieval become more complex, especially when reconciling financial data.

Solana’s performance also creates a proliferation of microtransactions. Validators, for instance, cast thousands of votes per day, each incurring a small fee. Delegators, who stake with validators, also receive frequent, tiny reward payments. For high-volume participants, this means processing hundreds of thousands of small transactions daily, each of which must be recorded and categorized. Managing these streams of micro-events is far beyond the capacity of traditional accounting methods.

FOGO and the Next Wave of SVM Chains

Emerging SVM-based chains, like FOGO, aim to enhance Solana’s performance by addressing some of its latency and coordination challenges. FOGO’s architecture is purpose-built for high-frequency trading (HFT) and institutional finance. By utilizing the Firedancer client, a highly optimized version of Solana’s core software, FOGO aims to achieve block times of just 20–40 milliseconds and transaction throughputs exceeding 54,000 TPS. These performance metrics make it an attractive platform for trading desks and financial institutions looking for blockchain-based real-time finance.

FOGO’s approach to validator coordination also sets it apart. The network uses multi-local consensus with a curated set of high-performance validators, geographically clustered to minimize network latency. Unlike Solana’s more open validator model, FOGO’s design prioritizes speed and consistency, essentially creating a more controlled environment suited for institutional-grade applications.

While these optimizations push blockchain performance to new heights, they also exacerbate the data management problem. The volume and velocity of transactions on FOGO mean that financial data must be captured and processed in near real-time to maintain operational transparency and regulatory compliance. Without purpose-built analytics and reporting tools, companies risk data loss or misreporting.

The Regulatory Landscape

In 2025, regulatory developments around DeFi reporting took a surprising turn when the Trump administration rolled back previously proposed IRS requirements targeting DeFi platforms. While this shift temporarily eases direct reporting obligations for decentralized applications, it does not eliminate the broader need for robust financial reporting and compliance.

For companies launching products on Solana or supporting clients who interact with Solana and other SVM-based chains, the rollback does not mean compliance can be ignored. Businesses operating in this space must still maintain rigorous internal reporting standards to manage risk, ensure financial accuracy, and meet potential external compliance requirements.

Even without direct IRS mandates targeting DeFi, there is an increasing expectation from stakeholders, partners, and institutional clients to provide transparent and auditable transaction data. High-frequency finance on Solana and SVM chains like FOGO generates massive volumes of transactions, often involving complex multi-step interactions. These data points need to be systematically captured, categorized, and stored for both internal and external reporting purposes.

For instance, companies offering financial products built on Solana may need to:

• Generate Detailed Internal Reports: To monitor liquidity, asset movements, and revenue streams in real time, particularly given the complexity of parallel transaction processing on SVM chains.
• Support Client Reporting Needs: Enterprises and institutional clients interacting with these products will require accurate statements reflecting their on-chain activities. This is especially true for institutional validators and financial entities that need to reconcile on-chain data with off-chain accounting systems.
• Prepare for Audits and Reviews: Even in the absence of strict IRS reporting requirements for DeFi, businesses must be prepared for internal audits, investor scrutiny, and potential future regulatory changes that could retroactively impact data reporting obligations.
• Capture Transaction Data for Financial Reporting: Organizations must maintain comprehensive transaction logs that accurately reflect gains, losses, and movements of digital assets, ensuring these records can be easily converted into standardized financial reports when needed.

By proactively investing in systems that capture, categorize, and analyze blockchain transactions, companies can safeguard against compliance risks and build a strong foundation for transparent financial reporting. Tools like NODE40 are essential in this context, as they can seamlessly ingest high-volume blockchain data, parse complex transaction types, and deliver structured financial insights.

How NODE40 Bridges the Gap

NODE40 is uniquely positioned to address these reporting challenges. Its platform is designed to handle high-volume blockchain data efficiently while ensuring accuracy and compliance. By integrating with Solana’s architecture, NODE40 offers:

• High-Volume Data Processing: Capable of ingesting Solana’s vast data sets and decoding complex multi-part transactions.
• Automated Transaction Parsing: Distinguishes between revenue, expenses, and microtransaction fees, categorizing each entry correctly.
• Comprehensive Account Linking: Tracks all associated PDAs, ensuring complete financial data.
• Comprehensive Reporting: Provides dashboards that offer insights into financial performance and regulatory compliance.
• Tax and Compliance Integration: Automates the generation data that can be used for  Form 1099-DA.
  

Conclusion

As blockchain networks evolve to support institutional-grade finance, the need for robust reporting and compliance systems becomes ever more pressing. High-performance chains like Solana and FOGO promise unprecedented speed and throughput but demand equally advanced financial tracking tools. NODE40 meets this demand by offering tailored solutions that transform blockchain data into clear, actionable financial reports. Companies that leverage NODE40’s capabilities can navigate the complexities of modern blockchain finance while maintaining compliance and operational transparency.