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In a tale of two fledgling blockchain phones, one, the Solana Saga, has slashed its selling price while the other, the Ethereum Phone, is preparing to begin shipping.

Both devices are generally aimed at fusing mobility with Web3, the third iteration of the internet that incorporates open-source software, blockchain transaction ledgers, decentralized governance, and native payments based on token-based economics.

The saga of the Saga

Saga is a creation of Solana Labs, which created the Solana blockchain platform in 2020, and in June 2022 announced Solana Mobile as a subsidiary aimed at creating a Web3-focused smartphone, Saga, which debuted in the US market during April 2023.

Saga is a flagship Android handset, created and built by development company OSOM, and is tightly integrated with the Solana blockchain in order to make cryptocurrency transactions and management of digital assets such as tokens and non-fungible tokens (NFTs) easily accessible via phone rather than computer, which is the more typical method. Saga represents an attempt to not only compete with established smartphone brands like Apple and Samsung but also to extend the influence of Solana, which competes with larger blockchains such as Ethereum. Both Solana and Ethereum also have their own cryptocurrencies – Solana (SOL) and ether (ETH), respectively.

Solana Labs and its Solana blockchain platform are known primarily within the cryptocurrency community. Solana Mobile and the Saga phone have even less mass market name recognition. It seemed probable that Solana’s Saga would struggle to attract buyers, so it wasn’t a surprise that after launching at a cost of $1,000, Saga’s price was slashed to $599 in August 2023. Some Saga buyers who paid the original price only to see it slashed by 40% just four months after the phone’s debut have publicly expressed their displeasure, not exactly a good sign for a nascent product that needs to build goodwill.

Blockchain and a Web3 ethOS

Some observers attribute Saga’s price reduction to the impending arrival of new competition from a company based in Delaware (US), Freedom Factory. Like many blockchain and cryptocurrency projects, Freedom Factory is a community-led effort with global reach. Its small team developed both ethOS, a free, open-source native mobile operating (OS) system, and the new Ethereum Phone, also called ethOS.

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By GlobalData

Plans for the Ethereum mobile OS and accompanying ethOS-based smartphone were both disclosed in a December 2021 manifesto posted on Discord, which contended that Google’s Android and Apple’s iOS cannot serve Web3 needs due to their centralized platforms. Its backers assert that ethOS, designed to be decentralized and permissionless like the Ethereum blockchain, will foster novel economics and experiences through new apps, tokens based on ERC20 (the technical standard for fungible tokens created using the Ethereum blockchain), and NFTs.

People can already load ethOS onto select unlocked Google Pixel 3, 3XL, or 5a smartphones, but the Ethereum Phone is designed to provide a turnkey option for side-loading ethOS onto a device. The Ethereum Phone is actually a flashed version of Google’s Pixel 7a using GrapheneOS 13, which is an Android fork with hardened security.

Preorders for the first 50 Ethereum Phones began on August 22, 2023, and sold out in 24 hours. Particular NFTs worth 0.39 Ethers (ETH), or nearly $650, had to be minted to qualify for a preorder, which means the phone was selling at a premium, given that a regular Google Pixel 7A retails for $499 in the US. After preorders begin shipping, regular orders are slated to open in fall 2023.

Looking ahead with blockchain

The promise of blockchain phones to fuse mobility and Web3 is captivating. Though it’s unclear whether there will ever be a substantial market for these niche devices, their Web3-oriented features and functionalities could migrate to smartphones that are marketed to a broader swath of the mass market.