Pump.fun is rewriting the playbook. By merging livestreaming with creator capital markets, it has pioneered a new model where instead of relying on trickle-down ad deals, creators now capture direct value from the market dynamics surrounding their own content. We have previously argued that Pump.fun unlocks entirely new monetization avenues for streamers, opportunities that remain out of reach on incumbent platforms while simultaneously creating a novel category of financial entertainment for audiences. Pump.fun’s livestreaming metrics have widely exceeded our expectations within such a short period of time - reaching 43th in all entertainment apps on the iOS app store, flipping Rumble in terms of average number of concurrent live streams and capturing ~1% of Twitch's market share and ~10% of Kick's market share. 

In this piece, we dive deeper into the mechanics behind this shift and outline why we believe Pump.fun represents a fundamental evolution in the streaming landscape.

How is livestreaming on Pump.fun fundamentally different? 

Every livestreamer launches a token tied directly to that broadcast. Viewers don’t just passively watch; they actively participate by trading the streamer’s token. Every buy and sell generates fees, and thanks to a meaningful portion flows back to the creator in real time. Why would people want to trade streamer tokens? Buying a token is essentially a wager that the livestreamer will gain popularity and capture significant attention and mindshare. If that streamer gains traction, more viewers discover them, and trading activity spikes, the token’s value can soar. This dynamic flips audience participation from passive support into active speculation. Early supporters are no longer just fans, they can benefit financially from identifying talent before the mainstream does. Spotting an engaging streamer with 50 viewers today could mean holding a token that skyrockets in value once that creator breaks out to 5,000 viewers. In this sense, Pump.fun merges the thrill of live entertainment with the dynamics of financial speculation. One example is STREAMERCOIN who peaked at 40 million market cap and generated over 1,000 SOL in creator fees within its first week, all while donating 100% of those fees directly to streamers to fuel an "attention flywheel." This innovative model turned every trade into live shoutouts from top influencers like Kai Cenat who featured the token on t-shirts and Instagram stories during subathon season, driving massive mainstream exposure and viral mentions in front of millions. 

Some of the recent popular livestreamers include: 

KIND:  livestreamer that donated creator fees to struggling small streamers, already giving away $20K+ in under a week; his emotional dad-reaction clip went mega-viral, proving tokenized charity as a feel-good onboarding tool

BAGWORK: Two 19-year-olds who quit their jobs to stream wild IRL stunts like streaking a Dodgers game and leaking unreleased Drake/Future tracks, surging to $53M market cap and $83K in fees by blending celebrity leaks with degen energy, redefining "bagwork" as high-risk, viral spectacle on the board

FEED THE PEOPLE: Charity-driven streamer channeling all creator rewards into feeding LA's homeless, with transparent daily livestream drops proving real-world impact

RUNNER: A transformative fitness streamer running live to battle depression and debt post-cancer family crisis

Pump.fun livestream flywheel

There is a deliberate reason why the Pump team chose to focus on boosting creator revenue first. In doing so, it kicks off a flywheel (yes a flywheel) whereby

• Increased creator rewards attract quality new streamers

• New streamers onboard more audiences 

• More audiences drive trading volume, revenue, and attention

• Which in turn attracts more streamers, strengthening the cycle

Creator Earnings on Pump.fun will be substantially higher than other streaming platforms 

A major catalyst behind Pump.fun’s recent growth surge in livestreaming is its creator fee model which routes a higher portion of trading fees back to creators. This reworks incentives because creators now have every reason to keep their tokens alive, attract attention, and engage audiences, because sustained trading activity directly boosts their payouts.

This is a powerful pull factor compared to Twitch, YouTube, or Kick, where creators wait months or years to see meaningful monetization. On Twitch, for instance, the average streamer with 1,000 concurrent viewers might earn between $1,000 and $5,000 per month through a 50/50 revenue split on subs (about $2.50 per Tier 1 subscription after fees) and modest ad CPMs around $3.50 per 1,000 impressions. On Pump.fun, even first-time streamers can earn hundreds to thousands of dollars from their very first broadcast, simply because their content is embedded within an active token market. We believe that this powerful monetization incentive will attract existing and also the next wave of livestreamers to Pump.fun. This is already happening with the exponential increase of creator rewards and also number of concurrent livestreamers on Pump.fun 

Livestreamers will also attract a new audience outside of crypto

Pump.fun livestreaming has already attracted a number of non-crypto native livestreamers because of the increased monetization. A prime example is Wheresyujin, a content creator known for adventurous, IRL-style streams that feel more like travel vlogs or reality TV. Wheresyujin has built her following mainly on Twitch, Instagram & Tiktok and will inadvertently onboard some of her followers to Pump.fun. Similarly, the creator behind KIND was already creating charitable content on Twitch, YouTube and Instagram before starting to stream on Pump.fun. These brand new audiences who probably never interacted with a crypto wallet before will now be introduced to this novel form of financial entertainment. 

Revenue from streamers will be more stable than traditional memecoins 

Livestreaming could potentially be a more stable and sticky form of revenue for Pump.fun.  Traditional memecoins are highly cyclical, trading volumes spike in euphoric bull runs but collapse during downturns. This reflexive nature means Pump.fun’s revenue has always been viewed as unreliable. Livestreaming is fundamentally a form of entertainment, which operates on a steadier demand curve. Audiences tune in not just for market speculation but for content, personality, and community. That behavioral shift translates into a more predictable revenue stream for Pump.fun as livestreaming continues to take off. 

There are still issues that Pump.fun is working on

Pump.fun livestreaming is still in its early innings, and while the growth trajectory is impressive, there are several challenges that we feel confident that the Pump.fun team will work on solving in the immediate future. 

First, content quality continues to be a critical pain point. The low barrier to entry has inevitably attracted toxic or low-effort streams, which risk damaging the platform’s reputation. For Pump.fun to move beyond its degen roots, it must ensure that the content ecosystem is healthy and sustainable. The team has already taken steps here, implementing stricter moderation and taking down streams that violate its terms of service, but this remains an ongoing battle.

Second, onboarding non-crypto native streamers is far from seamless. Many talented livestreamers from outside crypto have shown interest but often run into friction: asking basic questions like how to lock token supply, or even how to pay for listings on third-party sites like Dexscreener. Post-token launch, the process can feel intimidating, especially for creators used to traditional platforms. Building educational resources, walkthroughs, and creator support programs will be essential for attracting mainstream talent.

Another challenge lies in the casual streamer dynamic. Without clear roadmaps, regular schedules, or token management strategies, many casual creators end up with “pump and dump” patterns, tokens rally during the stream and collapse immediately after. This erodes trust with viewers and token holders, making it harder to sustain communities. Educating streamers on how to manage their audience, build consistent content, and align incentives with holders will be key to long-term stickiness.

Additionally, the viewer experience needs refinement. The surge in new users has already strained infrastructure, leading to lag during high-traffic moments. More importantly, the lack of categories (gaming, IRL, gambling, music, etc.) makes discovery difficult for viewers. Improving the UI/UX, introducing categorization, and smoothing performance at scale will be critical for Pump.fun to compete with the polish of Twitch or Kick while preserving its unique creator-first economics.

Finally, one of the most promising areas for improvement is exploring utility for creator tokens beyond pure speculation. Right now, tokens function primarily as a way to trade on attention, but lasting ecosystems will require deeper integration. For example, creator tokens could unlock gated Discords, exclusive content drops, in-stream perks, or even voting rights over what a streamer does next. They could also serve as currency within creator-driven micro-economies, paying for merch, funding community initiatives, or pooling resources for collaborative projects. By embedding utility into the tokens, Pump.fun can strengthen the bond between creators and their audiences, while reducing the risk of tokens becoming short-lived speculative instruments.

Future developments

Pump.fun livestreaming is just the beginning. While it has already proven the power of attaching tokens to livestreamers is only one creator vertical. The same model could easily extend to YouTube-style creators producing long-form videos, or even TikTok-like short-form content where every such creator has a token. In such a world, any piece of content becomes both entertainment and a financial asset, blurring the line between audience, investor, and community. Unlike the capped economics of ad-driven platforms, this structure has no ceiling. As more creators experiment across formats, Pump.fun’s vision of creator capital markets could expand far beyond livestreaming, redefining how the internet rewards creativity.

Galaxy Digital (NASDAQ: GLXY) represents an undervalued opportunity at the confluence of two of the most powerful secular trends: crypto and AI. The market is mispricing Galaxy, valuing it as a volatile crypto company while overlooking the immense value of its "crown jewel" asset: the Helios data center. Helios is a world-class AI infrastructure platform poised to generate stable, high-margin, long-term cash flows.

The investment thesis rests on the market's eventual re-rating of GLXY as it successfully executes its pivot from a digital asset services company into a premier AI infrastructure play. The company's recent 15-year anchor lease with AI hyperscaler CoreWeave for the entirety of Helios's currently approved 800 MW of gross power serves as a validation of their business model and provides visibility into a ~$720 million recurring annual revenue stream with 90% EBITDA margins.

Galaxy's superiority over competitors attempting a similar "Bitcoin miner to AI" pivot is evident, defined by a fortress balance sheet with over $1.8 billion in net cash and investments, a management team with deep expertise and a clear path to scaling Helios to a potential 3.5 GW campus.

II. Investment Thesis: Unlocking a Premier AI Infrastructure Play

A. The Core Mispricing

Galaxy is composed of two distinct business segments: a legacy Digital Assets financial services franchise and an emerging AI Data Center infrastructure business. However, the market currently values GLXY through a single lens— as a crypto company. $GLXY price action remains highly correlated with Bitcoin, indicating that investors have not yet priced in tailwinds provided by their AI Data Center business.

B. A Serendipitous Acquisition

In late 2022, Galaxy acquired the Helios data center campus in a distressed sale from Argo Blockchain for a mere $65 million. Argo was facing bankruptcy and needed to liquidate assets. Galaxy secured this world-class infrastructure asset at a fraction of its current replacement cost. This transaction preceded the explosion in AI-driven demand for power and data center capacity sparked by the launch of ChatGPT and single-handedly repositioned Galaxy for its next decade of growth.

C. Helios’ Strategic Assets

Helios is not just any data center; it is a tier-one infrastructure asset uniquely suited for the demands of the AI revolution.

Power: The most significant constraint facing the AI data center industry is the availability of power. Power contracts are the "limiting reagent" for hyperscalers racing to deploy GPU capacity. Helios possesses an 800 MW approved power contract with ERCOT, the Texas utility operator. This allows tenants to bypass the typical 36+ month waiting period for new grid interconnections. Furthermore, the campus has a clear and defined path to scale, with 1.7 GW of additional capacity under load study, bringing the initial site's potential to 2.5 GW. A recent Q2 2025 announcement revealed the acquisition of adjacent land with a 1 GW interconnection request, expanding the campus's total potential power capacity to a staggering 3.5 GW, placing it among the largest data center sites globally.

Scale & Location: AI hyperscalers prefer centralized facilities to achieve economies of scale and performance benefits. Helios is a single, expandable campus that perfectly fits this model. Its location in West Texas provides access to some of the cheapest and most reliable power in the nation. Critically, Galaxy is investing in a long-haul fiber network to ensure a 10-15 millisecond travel path to the Dallas/Fort Worth metroplex. This differentiates Helios from the growing number of AI training- only facilities, as their low-latency connectivity unlocks AI inference use-cases which ensures its premium pricing power.

Future-Proof Design: Any data center built today risks obsolescence within years. Galaxy mitigates this risk through a staggered development plan, allowing for the integration of the leading-edge technologies with each new build-out. This includes advanced cooling solutions like direct-to-chip liquid cooling, which is essential for next-generation GPUs. The facility's on-site 10 million gallon freshwater pond supports these critical cooling requirements.

D. CoreWeave Partnership

Their partnership with CoreWeave is the single most important validation of Galaxy's AI data center strategy. In Q2 2025, CoreWeave committed to lease the full 800 MW of currently approved gross power at Helios.

Deal Economics: Their 15-year triple-net lease agreement is exceptionally attractive. The initial 600 MW tranche alone is projected to generate ~$720 million in annual revenue, which includes a 3% annual escalator. Due to the triple-net structure, where the tenant covers all operating expenses, this revenue is expected to convert to EBITDA at a remarkable 90% margin.

De-risking and Validation: This landmark agreement accomplishes several critical objectives. First, it provides long-term predictable cash flow visibility, which derisks Galaxy's financial profile. Second, it serves as a powerful validation of Galaxy's operational capabilities, establishing the company as a credible counterparty. This is crucial for attracting other hyperscale tenants, who prefer partners with a proven track record.

III. Galaxy’s Legacy Business: A Profitable and Synergistic Foundation

A common bearish take against Galaxy is that its legacy crypto business is a liability that adds volatility and risk. This view is misguided. In reality, Galaxy's Digital Assets franchise is a profitable, market-leading entity that provides capital and credibility synergies with the rest of its businesses.

Galaxy’s Digital Assets business comprises two primary units: Global Markets, which includes institutional trading, lending, and investment banking services; and Asset Management & Infrastructure Solutions, which includes a suite of asset management products and on-chain services like staking.

Its financial results from Q2 2025 demonstrate the strength and profitability of this franchise:

Digital Assets segment generated $71.4 million in adjusted gross profit, a 10% increase quarter-over-quarter.

Global Markets outperformed the broader market. Its institutional loan book grew 27% to $1.1 billion, showcasing growing demand for its credit products.

Investment Banking demonstrated its M&A advisory prowess, serving as the exclusive financial advisor to Bitstamp in its acquisition by Robinhood.

Asset Management & Infrastructure Solutions saw its total assets on platform grow 27% quarter-over-quarter to nearly $9 billion.

Q2 Balance sheet showed $1.18 billion in cash and stablecoins and $1.27 billion in digital assets (primarily BTC and ETH).

Galaxy’s profitable Digital Assets business generates cash flow and bolsters its balance sheet, allowing Galaxy to self-fund a significant equity portion of the Helios buildout. Furthermore, the franchise's demonstrated ability to execute massive, complex transactions, such as the recent sale of over 80,000 Bitcoin (valued at over $9 billion) for a single client. All these traits assure potential hyperscaler clients that Galaxy is a sophisticated, reliable and well-capitalized counterparty capable of delivering on a multi-billion-dollar infrastructure project. This synergy creates a powerful, self-reinforcing loop between the two business segments.

IV. Competitive Landscape: Clear Leader in the AI Pivot

Galaxy Digital is often lumped in with a cohort of Bitcoin miners attempting to pivot their assets toward hosting AI workloads. However, the below comparison reveals that Galaxy is in a class of its own and represents the most attractive way to invest in this theme. The competitive landscape can be divided into two tiers: those with signed AI deals (e.g. Core Scientific, TeraWulf) and those with only stated ambitions (e.g. IREN, Hut 8, Riot). Against its closest peers with signed deals, Galaxy's superiority is evident across every critical vector.

Galaxy's Superiority Across Key Vectors:

Deal Attractiveness: Galaxy's lease with CoreWeave features superior economics. It commands a higher annual rental revenue per megawatt ($1.8MM vs $1.4-1.6MM) with higher EBITDA margins (90% vs 75-80%) and includes a 3% annual rent escalator which competitor lack.

Balance Sheet Strength: Galaxy boasts $1.8 billion of net cash and investments. In contrast, competitors like CORZ and WULF carry significant net debt burdens. CORZ only recently emerged from bankruptcy, and WULF avoided a similar fate through massive shareholder dilution. These competitors continue to burn cash on their mining operations, while Galaxy's legacy businesses are profitable.

Expansion Capacity: Galaxy's single Helios campus has a potential capacity of 3.5 GW. This dwarfs the fragmented and substantially smaller power capacities of its peers, positioning Galaxy to capture a much larger share of future demand.

Management & Singular Focus: Galaxy has made the strategic decision to completely exit its Bitcoin mining business to dedicate 100% of its focus to the AI data center opportunity. Competitors are attempting to run hybrid models, splitting focus and capital between two very different businesses.

V. Valuing Helios

The Helios data center business should be valued in line with other premier, publicly-traded data center REITs and recent private market transactions. Public comps like Digital Realty and Equinix trade for approximately 25x adjusted EBITDA. Private M&A transactions for data center assets have also occurred at similar multiples.

Base Case (800 MW approved only): Assumes only the current approved 800 MW is leased at an average of $1.8MM/MW. This would generate approximately $17.28 billion in enterprise value applying a 20x EBITDA multiple. Deducting ~$5.73 billion in project-level debt and interest, this implies an equity value of ~$11.54 billion for Helios. Since we expect this annual EBITDA to come online in 2028, we apply a 12% discount rate, which translates to a present equity value of $8.2 Billion or a value per share of $24.

Bull Case (1,600 MW Leased by FYE 2026): Assumes the next 800 MW tranche expected to be approved by Q4 2025 is leased at an industry average of $1.6MM/MW. The total 1,600 MW would generate approximately $1.63 billion of annual EBITDA. Applying a 20x multiple yields an enterprise value of ~$34.5 billion. After accounting for ~$11.46 billion in project-level debt and interest, this implies a future equity value of ~$21.1 billion for Helios. As we expect that the full 1600 MW will only be fully operationally in 2030, we apply a higher discount rate of 16% to account for additional execution risk. This gives us a present equity value of $10.01 Billion or value per share of $29.

$GLXY currently trades ~$24 (as of 2 Sept 2025). The base case value per share for Helios project alone implies a valuation of $24. Within our valuation, we have not included Galaxy’s legacy digital assets business that is profitable. Bullish recently successfully completed its IPO at $5.4 billion valuation while it previously reported a net loss in Q1 2025. If Galaxy’s digital assets business prices anywhere close to Bullish’s IPO valuation, that alone adds ~$8-10 per share.

VI. Key Risks & Mitigating Factors

A. CoreWeave Tenant Concentration and Credit Risk

The most prominent bear argument is the concentration risk associated with a single tenant, CoreWeave, and questions surrounding its creditworthiness given its debt load and lack of an investment-grade rating.

Mitigation: CoreWeave's business model has high revenue visibility, with 96% of its revenue derived from long-term committed contracts. Its debt is largely structured as Delayed Draw Term Loans, used specifically to fund growth CapEx against signed customer contracts. The credit has been thoroughly underwritten by sophisticated investors like Blackstone, which led a major financing facility for CoreWeave. Furthermore, CoreWeave has a durable moat through its strategic alignment with Nvidia, which gives it priority access to the latest GPUs, and it is the only "Neocloud" operating at the scale required by top AI labs like OpenAI.

B. Project Execution and Timeline Risk

The retrofit and expansion of Helios is a complex multi-billion-dollar infrastructure project with significant execution risks.

Mitigation: This risk is mitigated by the deep project finance and capital markets expertise of Galaxy's management team, particularly CIO Chris Ferraro. The company's strong balance sheet, recently bolstered by a ~$500 million capital raise, provides a significant financial cushion against unforeseen costs or delays. The staggered development approach also de-risks the project by breaking it into manageable phases.

C. Regulatory and Power Grid Risk

Future expansion beyond the currently approved power capacity could face delays or scrutiny from Texas's grid operator, ERCOT, which is closely monitoring new large load interconnection requests.

Mitigation: Galaxy's existing 800 MW of approved interconnection capacity is a massive, de-risked asset that insulates it from the biggest bottleneck facing new projects. This approved power is already secured. Furthermore, the generally pro-business and anti-regulation stance of Texas regulators provides a significant tailwind for future growth compared to more restrictive jurisdictions.

VII. Concluding Thoughts

In conclusion, Galaxy Digital represents an undervalued investment opportunity. The market continues to value GLXY through the narrow lens of a volatile cryptocurrency proxy, failing to recognize its fundamental transformation into a premier AI infrastructure provider.

The lynchpin of the investment thesis is the Helios data center, a world-class asset de-risked by a landmark 15-year, triple-net lease with hyperscaler CoreWeave. This partnership not only secures a predictable, high-margin revenue stream but also validates Galaxy's position as a credible counterparty for its ambitious future expansion.

Our valuation analysis suggests that the Helios asset alone justifies its current share price. Their profitable legacy Digital Assets business continues to set them apart from other "AI pivot" competitors, distinguished by their fortress balance sheet, multiple uncorrelated revenue streams, and a singular management focus. While risks related to tenant concentration and project execution exist, they are mitigated by Galaxy's experienced management and robust financial standing. As the company executes on its clear roadmap and the market digests the scale and stability of Helios cash flows, we expect a re-rating of their stock.

1. Illiquidity of positions – once assets are deposited, they sit idle and cannot be repurposed elsewhere.

2. Concentration of yield – the most lucrative deals are closed-door agreements, reserved for institutional players.

Mitosis addresses both challenges by redesigning liquidity at its foundation.

How it works

When users deposit assets into Mitosis Vaults across supported blockchains, they receive Hub Assets on the Mitosis Chain that represent their deposits. These Hub Assets can then be deployed through two frameworks: Ecosystem-Owned Liquidity (EOL), where pooled assets are governed collectively by participants, and Matrix, which directs funds into curated liquidity campaigns with predefined terms. Each framework issues its own position tokens - miAssets for EOL and maAssets for Matrix.

miAssets are yield-bearing tokens that represent a user’s share of liquidity within Mitosis Vaults. Unlike conventional LP tokens that sit idle, miAssets automatically accrue rewards from staking, restaking, and cross-chain liquidity provisioning, while also allowing holders to participate in governance and influence allocation strategies. They remain fully composable across DeFi, meaning they can be traded, used as collateral, or deployed in lending, trading, and yield-farming protocols, all while continuing to generate rewards. In effect, miAssets turn liquidity into a dynamic, programmable financial primitive.

maAssets, by contrast, represent a user’s participation in specific Matrix campaigns. They provide targeted exposure to structured opportunities, such as incentivized liquidity pools or cross-chain trading initiatives, with transparent terms around duration and rewards. While campaign-specific, maAssets retain tradability and composability, allowing users to enter, exit, or repurpose their positions without waiting for the campaign to conclude.

Together, miAssets and maAssets create a dual-token system that balances flexibility with focus: miAssets optimize long-term, governance-driven liquidity flows, while maAssets enable curated, campaign-based strategies. This duality makes Mitosis uniquely positioned to serve both general liquidity markets and specialized opportunities, establishing a robust foundation for programmable, composable DeFi liquidity.

Mitosis is not just another L1

On the Mitosis L1, those assets can be continuously rehypothecated across a diverse range of applications, ensuring that capital remains productive while retaining liquidity and governance power.

Within the Mitosis ecosystem, miAssets find immediate utility. On Chromo Exchange, they can be paired in a native AMM, with plugins that allow strategy builders to design and automate liquidity provision. Kingdomly extends this utility into the NFT economy, using miAssets as a base currency for launching and trading NFT collections. Mikado Hub incubates mini dApps that can integrate miAssets into new use cases, while Morse_404, the community NFT collection, creates cultural and social layers where miAssets can back NFT-native liquidity or community-driven utilities.

On the trading and identity side, Nautilus Exchange leverages miAssets within its aggregator of trade routes, while SpaceID allows holders to tie miAssets to decentralized identity, deepening integration between financial assets and on-chain identity. Spindle takes programmability further by issuing tokenized, tradable yield positions derived from miAssets, unlocking secondary markets for yield.

DeFi primitives are equally extended: Telo Money integrates miAssets as novel forms of collateral in its money market, while Zygo Finance builds perpetual contracts on top of programmable miAsset positions. Yarm AI transforms liquidity into social capital, enabling communities to coordinate and deploy miAssets in collective strategies. Meanwhile, Yieldkingz experiments with GameFi by introducing miAssets into a social casino environment, where liquidity underpins gaming activity.

Through these integrations, miAssets become more than receipts, they evolve into a core currency of programmable liquidity across Mitosis. Every deposit, rather than being locked away, is continuously recycled into new opportunities, from DeFi to NFTs, identity to gaming. This composability ensures that the Mitosis L1 operates as a living marketplace of liquidity, where idle assets are constantly put to work, multiplying utility and yield across the ecosystem.

Mainnet is just the beginning

As investors, we are excited to back top-tier founders like Jake who have the conviction and capability to reshape how DeFi works at its core. Mitosis is not another competing L1, but the connective tissue between existing ecosystems, designed to unify and mobilize fragmented liquidity. By making idle assets productive across chains, it creates a win-win where every ecosystem gains deeper liquidity, greater efficiency, and new opportunities for growth. What began nearly two years ago as a bold vision has now taken form with the launch of Mitosis mainnet, yet this milestone is only the beginning. The work ahead lies in scaling adoption, expanding integrations, and realizing the full potential of programmable liquidity across ecosystems. We look forward to continuing to work closely with Jake and the Mitosis team as they grow, refine, and expand the protocol into a foundational layer for the next generation of decentralized finance.

Pump is back - What exactly is Pump’s moat 

In the weeks following Pump’s TGE, BONK’s dominance in terms of trading volume and tokens launched led people to believe Pump had little chance of regaining market share.

Fast forward to today, Pump has clawed back market share and regained its market leader position. This turnaround stems from several strategic and structural advantages. Pump.fun has proven itself to be more than just a memecoin launchpad, it is a neutral infrastructure layer for permissionless digital asset creation (memecoins, Creator Capital Markets, Internet Capital Markets etc.). Unlike platforms that hinge on endorsements from key figures or the perceived official backing of influencers, Pump.fun deliberately distances itself from personality-driven narratives. This neutrality proved critical during July 2025, when Bonk.fun briefly seized market share by leveraging on endorsements from key figures. Tokens endorsed by the Bonk team and affiliated influencers temporarily attracted liquidity, as deployers rushed in hoping to ride the wave of attention. But this model is inherently unsustainable, attention directed by a handful of personalities is finite, and trenchers quickly realized they couldn’t keep chasing whichever coin an influencer decided to spotlight. Genuine communities and creators, meanwhile, grew frustrated with the Bonk ecosystem: instead of cultivating their followings organically, success depended on endorsements, leaving little room for authentic growth.

Pump.fun’s moat isn’t just cultural, it’s financial. The platform plans to channel significant capital into the ecosystem through initiatives like the Glass Full Foundation, designed to inject massive liquidity across high potential communities. This liquidity injection marks a structural shift: instead of letting launches remain fragile, Pump.fun is building the conditions for tokens to graduate into sustainable communities with healthier trading volumes and broader reach.

Pump’s Revenue Powerhouse

Pump has successfully regained its strong revenue momentum from pre-TGE levels, averaging roughly $1.2M in daily revenue, a figure that firmly reestablishes its dominance among crypto applications. Despite this resurgence, Pump remains significantly cheaper than most competitors in the trading sector, trading at a lean 2.2x market cap multiple and 6.3x FDV multiple. Following its TGE, PUMP sold off for several reasons. Many ICO participants, particularly institutional capital, treated it as a quick 2–3x trade or arbitraged between ICO and pre-market levels. Confidence eroded further with no immediate airdrop, while perceptions grew that the team was treating the raise as an exit and extracting fees without redistributing value. This was compounded by Pump rapidly losing share to competitors.

That sentiment has since flipped. Pump has regained market leadership and responded with continuous product development, liquidity injections via the Glass Full Foundation, and a renewed focus on organic communities. Most importantly, buybacks were escalated from 25% to 100%, cementing direct token-value accrual. This combination of high revenue output and compressed valuation multiples positions Pump as one of the most efficient and best-performing revenue-generating applications in crypto today, underscoring both its scalability and the market’s underappreciation of its fundamentals.

$PUMP Buybacks 

The protocol routes nearly all of its revenues (between 97% and 100%) into direct buybacks of the $PUMP token. This design removes the ambiguity that plagues many other projects, where revenue often gets parked in treasuries or directed toward governance funds with little clarity on how value ultimately accrues to token holders. With Pump, the mechanism is immediate, transparent, and continuous. Every trade, every launch, and every fee collected flows back into direct demand for PUMP, creating a reflexive cycle where more activity leads to higher revenues, higher revenues drive more buybacks, and buybacks support higher token prices, which in turn attract more attention and inflows. In a market that thrives on reflexivity, Pump has engineered one of the purest flywheels in crypto.

The scale of these buybacks is what makes PUMP especially compelling. In the past 30 days, Pump.fun has generated $36.6 million in revenue. Annualized, this equates to roughly $439 million in potential buybacks. Against its current market capitalization of $982 million, this suggests that nearly 45% of the entire float could be absorbed via buybacks within a year assuming revenues hold steady. These buybacks are happening in real time, week after week, with no new token unlocks scheduled until July 2026. To put this in context, Hyperliquid has achieved $1.2 billion in annualized revenue in the same time period, but with a market cap of around $15 billion, this only represents around 8% of the entire float. Pump therefore delivers vastly superior buyback efficiency.

Expanding to new verticals 

While it is often argued that memecoin markets are inherently cyclical with revenues far less sticky than other sectors like perpetual trading, Pump is actively expanding into new verticals to onboard new users into crypto. Looking ahead, Pump has the potential to evolve in two powerful directions: creator capital markets and internal capital markets.

Creator capital markets represent an obvious extension of Pump’s role as the on-chain hub of culture. Streamers, artists, and cultural figures could tokenize their brand equity. Creator capital markets are built around a brand, whether an artist, streamer, or cultural figure, where the creator and their content become inseparable from the token itself. In this subgenre, investors aren’t just speculating on abstract assets, but on the personality, brand, and cultural gravity of the individual behind the coin. For instance, Trencher is @grizzle_art, Dollo is @doro_daro, Fwog is @Groowut, Zesty is @nomoreangelwave. The token becomes a direct reflection of the creator’s identity and trajectory. For participants, it offers a way to invest in and speculate on cultural figures they believe in, while creators themselves gain a sustainable monetization channel through trading fees and token activity. Pump is actively refining incentive structures to ensure that creators not only launch on the platform but also remain engaged for the long term, which we will discuss further in later sections. For Pump, it channels recurring trading activity and fees into its buyback engine, tying the platform directly into the attention economy where financial speculation and cultural engagement intersect.

One exciting sector for Creator Capital Markets lies in streaming. Streaming is the fastest-growing major media vertical whose audience is overwhelmingly Gen Z and younger millennials with billions of hours of live content consumed in recent years. Importantly, they have the same demographics most engaged with crypto. We took a first hand look at some of the long-tail streamers currently on Pump.fun and the most apparent reason why they stream there is because it’s a platform that gives them more viewers than the incumbents like Twitch and Kick. Pump.fun enables streamers to monetize in more ways that is currently impossible on incumbent platforms and also engage their fans in a more financialized speculative manner. In this intersection of entertainment and financialization, there is a fine line between extracting from your audience and also providing a new form of engagement. Similar to other creators, it’s crucial for the Pump team to ensure that streamers are long term incentivized. 

It’s also evident that Pump wants to enter Internet Capital Markets, but it needs to address the fundamental shortcomings that plagued earlier attempts like Believe App. The problem with Believe was that there were effectively zero guardrails ensuring that launches represented legitimate startups with real products, missions, or even the faintest signal of product-market fit. This absence of standards attracted opportunistic grifters rather than serious builders, leading to a flood of low-quality projects that eroded user trust and speculative capital alike.

For Internet Capital Markets to work on Pump, two things need to be made explicit: the mechanics by which a token continues to capture value as the underlying startup grows, and the structures that align founders with long-term success rather than short-term speculation. Without a clear path for tokens to accrue upside from product adoption, community growth, or revenue generation, they risk becoming just another memecoin with a mission statement. Similarly, if founders aren’t incentivized to stick around, whether through vesting schedules, revenue-sharing hooks, or direct protocol support, the entire exercise risks devolving into pump-and-dump cycles rather than genuine venture formation.

The challenge for Pump is to attract high-quality founders who view the platform as a credible avenue for bootstrapping their businesses, not just as a quick liquidity hit. That requires reputation systems, curation, or perhaps even incubation layers that filter for seriousness while still preserving the openness that makes Pump vibrant. In other words, if Pump is to own Internet Capital Markets, it must become the place where builders come to fundraise, where communities come to co-own, and where tokenized startups have a real chance to scale. Getting this right would not only differentiate Pump from the graveyard of failed “social token” apps, but also position it as the bank and venture studio of Solana’s Internet-native economy.

Taken together, these verticals dramatically expand Pump’s addressable market. Creator capital markets integrate it into the broader attention economy. Internal capital markets make it a financial hub for businesses. Streaming aligns it with the dominant form of digital culture for the next generation. The result is that Pump becomes not only the casino of Solana’s meme economy, but also its bank and its incubator, strengthening its moat, diversifying its fee capture, and enhancing the long-term sustainability of its buyback engine.

How to incentive creators for the long term - Pumpswap V2

One of the most significant upcoming catalysts is the planned update to PumpSwap’s fee structure. According to rumours, Pump is preparing to launch PumpSwap v2, which will overhaul how fees are distributed across the ecosystem. The big change is that a much larger share of trading fees will be directed back to creators and CTOs of projects, aligning their incentives more directly with the success of their tokens. This is a meaningful shift. Under the current system, creators earn relatively little from the trading activity around their launches, which limits both their ability and motivation to keep building and promoting after launch. With the new structure, creators would see dramatically higher rewards.

The revised system is also likely to be tiered, meaning that fees gradually decrease as a token’s market cap grows. This ensures that while early-stage creators are heavily rewarded, larger buys can still size into tokens at scale without being penalized by prohibitive fees. In other words, small projects and grassroots communities will benefit from generous creator payouts, while institutional players and high-volume traders will still find PumpSwap an efficient venue to deploy capital. What this unlocks is twofold. First, it creates a powerful incentive for artists, meme-creators, and project leads to launch and sustain activity on PumpSwap. More creators means more tokens, more trading, and more fees, which again cycle back into PUMP buybacks. Second, it provides these projects with a new funding source to continue building. With greater earnings, creators can reinvest into marketing, exchange listings, and community development, all of which feed back into the health and volume of the ecosystem.

Importantly, this fee overhaul will apply not only to new launches but also to all projects already listed on PumpSwap. That retroactive application instantly changes the economics of every coin on the platform, massively increasing the alignment between creator success and Pump’s business model. Strategically, this positions Pump to capture all aspects of the meme economy, from token issuance to post-launch trading and beyond. The team appears to be aiming at something broader than just a launchpad: a fully integrated meme infrastructure layer that includes issuance, secondary trading, streaming revenues, and creator economics. It echoes the vision of other “creator-first” ecosystems, such as Believe, but with the added advantage of real, proven trading volume and a self-sustaining revenue loop. If successful, PumpSwap v2 could dramatically expand Pump’s reach by onboarding a wave of new creators and project leads into the ecosystem. By giving them not just exposure but real financial upside, Pump ensures that these creators have both the means and the motivation to push their projects forward. That dynamic, combined with the ongoing buyback engine, sets the stage for an even more reflexive cycle of growth.

Mobile first and only 

Another underappreciated strength of Pump is its relentless focus on mobile-first onboarding. While many crypto platforms remain web-centric and unintuitive for casual users, Pump is consciously designing its app to feel as frictionless and engaging as any Web2 social product. The goal is simple: make mobile the easiest way for anyone to enter the ecosystem, trade, and participate in meme culture. A recent example of this strategy is the integration of KOLscan leaderboards directly into the app, allowing users to see who the top traders are and how much they are earning. This not only brings transparency but also creates a powerful incentive loop: people are trading not just for profit but for status and recognition. In a culture where clout drives behavior, gamified leaderboards can fuel engagement and encourage more frequent trading.

The team is also rolling out a steady cadence of mobile updates. Some of the stuff that we’ve noticed - a new search tab with swipe-to-buy functionality reduces friction between discovery and execution, while the coin details page has been fully revamped with more enhancements in testing. Livestreaming, central to Pump’s mobile strategy, has been transformed with automatic orientation detection, orientation lock, and manual rotate options, as well as real-time emoji reactions tied to Quick Trade actions, so viewers can literally trade while engaging with content. There is also an immersive trading mode that embeds Buy/Sell buttons and live PnL bars seamlessly into the livestream itself. Hosts and cohosts now have smoother layouts, while auto-hiding controls and refreshed icons make the experience feel polished and intuitive. The net result is that Pump feels more like TikTok or Twitch than a traditional exchange. By collapsing the distance between content, social interaction, and trading, Pump is creating a mobile-native experience that actively onboards new participants through entertainment-first engagement.

Incentives

Pump is also laying the groundwork for an incentives layer, designed to accelerate growth and deepen engagement across the ecosystem. The official Pump SDK was recently updated to include support for such a program, revealing an admin function that allows parameters to be set for distributing $PUMP tokens as rewards on a daily basis. The SDK also includes methods to track user trading volume and allow participants to claim their rewards, providing a robust framework for activity-driven incentives.

The implications are significant. Incentives have historically been one of the most powerful growth engines in crypto, from DeFi’s liquidity mining to today’s points programs. Pump’s version of this could directly reward traders and creators, tying their engagement back into PUMP’s flywheel. If structured properly, incentives can boost user acquisition, supercharge trading volumes, and ensure stickier retention. By rewarding activity with token payouts, Pump not only grows faster but also ensures that every participant, from casual traders to prolific creators, is aligned with the token’s long-term success. The SDK’s flexible design allows rewards to be adjusted dynamically, enabling Pump to lean in during growth phases or scale back when organic momentum is strong. This adaptability makes incentives a strategic lever rather than a blunt instrument, strengthening Pump’s ability to entrench its market leadership.

SOL Beta

Pump is also a natural high-beta expression of Solana’s broader rally. Pump is one of the cleanest choices given that memecoin trading powers the majority of Solana’s onchain activity. It is liquid, profitable, and with no near-term unlock overhang. Funds looking to increase exposure to Solana without simply levering up on SOL itself will increasingly see Pump as an attractive option, both as a directional bet and as a hedge against missing the next meme cycle.

The upside potential becomes even more pronounced if meme season returns. Every token launched, every trade executed, and every new wave of retail speculation drives additional revenue and therefore additional buybacks. This makes PUMP’s upside convex: in quiet markets, it can sustain itself with baseline revenues, but in heated meme environments, the growth is exponential. Pump benefits not from the success of any single coin but from the aggregate explosion of activity across the meme ecosystem.

The token’s holder structure also looks cleaner than it did during its early distribution phase. Much of the weak-hand retail and early ICO participation has already rotated out, chasing other narratives or taking profits along the way. What remains is a stronger, more long-term aligned base of holders. This dynamic, combined with relentless buyback pressure, creates an environment where supply is tight and demand is structurally supported. Finally, Pump is evolving toward becoming a must-own institutional asset. Just as Lido’s token became the canonical way for investors to gain exposure to ETH staking, Pump is arguably the only institutional-friendly token to gain exposure to the meme economy. In time, this could create a structural bid for PUMP that extends well beyond retail speculation.

Pump.fun’s story is not just about memecoins, it’s about how neutral infrastructure, empowered communities can outlast hype and personalities. In doing so, Pump.fun has positioned itself not just as the kingmaker of permissionless digital asset creation, but as the default cultural and financial launchpad for decentralized communities moving forward.

We are thrilled to announce our investment in Vanish, a pioneering privacy infrastructure layer for traders on Solana. In an industry where transparency is both a feature and a flaw, Vanish delivers a much-needed solution: simple, fast, and seamless on-chain anonymity. By masking trading activity without sacrificing performance or liquidity, Vanish is poised to become a cornerstone of Solana's trading landscape.

Our conviction in Vanish is built on a simple thesis: privacy is a requirement for a mature financial ecosystem. The platform's brilliant "Privacy as a Service" model, combined with a landmark partnership with a market-leading trading bot, creates a go-to-market strategy that we believe will result in immediate product-market fit and explosive growth.

The Multi-Billion Dollar Problem with Transparency

Solana's blockchain processes over $7 billion in decentralized exchange (DEX) volume daily. Its high throughput and low fees have made it a favorite among traders. However, its transparent nature creates significant, unaddressed problems:

• Front-Running & Copy-Trading: Sophisticated bots and "wallet watchers" can see incoming trades of all wallets and execute before them, or copy the strategies of successful traders, eroding alpha and creating poor market dynamics.

• Public Exposure: A trader's entire history—every win, every loss, every token held—is public knowledge. This exposes them to unwarranted allegations when top wallets or influential accounts make trades or transfers.

• Clunky Workarounds: The current best practice for privacy-conscious traders is to use a new, freshly funded "burner" wallet for every sensitive trade. This is a slow and frustrating user experience that hinders active trading.

Existing privacy solutions are often too slow or complex, failing to meet the needs of active traders on Solana. Other solutions require trading venues to integrate with their bespoke execution environments that have significantly less liquidity, resulting in a poor trading experience for users. 

The Solution: Vanish - Privacy at the Speed of Solana

Vanish provides an elegant solution by obscuring the link between a user's deposit and their on-chain trades.

It works through a simple, three-step process:

1. Deposit: A user sends funds to a unique, private deposit address provided by Vanish.

2. Shield: These funds are shielded in Vanish's secure wallets, managed by the enterprise-grade security platform, Turnkey.

3. Trade: Vanish executes trades from these wallets through aggregators.

While trades are still public, it is difficult to link it back to the specific user who initiated it. This is achieved with minimal latency (~50ms), ensuring that speed is never compromised. Critically, trades are still routed via leading DEX aggregators, which retains best pricing for the user.

Vanish's primary product is a B2B "Privacy as a Service" API, allowing any trading terminal, wallet, or bot on Solana to integrate it as an value-add feature for their users. This allows Vanish to scale rapidly by tapping into established user bases.

Why We're Excited

1. A Landmark Go-to-Market Partnership Vanish is finalizing an integration with a leading trading terminal on Solana, which currently handles over $1 billion in weekly volume. This partnership is a game-changer, providing Vanish with:

• Immediate Distribution: Access to a massive, active user base from day one.

• Path to Profitability: Vanish will earn a 0.5% fee on all volume routed through its service. Capturing just 1-2% of this volume could translate to an estimated $500k to $1M in monthly net profit.

This single partnership validates the market need and dramatically de-risks the path to adoption and revenue.

2. A Scalable, "Plug-and-Play" Business Model The API-first approach is brilliant. Instead of fighting for users, Vanish partners with the platforms that already have them. This creates a powerful network effect where Vanish becomes the default privacy standard across the ecosystem, generating a steady revenue stream from integration fees.

3. An Experienced, Crypto-Native Team The Vanish team is composed of seasoned operators with deep, first-hand experience in on-chain trading. They have not only identified a critical problem they've personally faced but also possess the technical expertise to build a robust and secure solution.

4. A Clear Commitment to Security & Compliance Vanish has been built with institutional-grade security and compliance at its core.

• Secure by Design: User funds are secured by Turnkey, and all actions require a signature from the user's private key, to which only they have access.

• Compliance-First: The platform's "one-wallet-in, same-wallet-out" architecture ensures a clear fund flow for compliance purposes without exposing trading activity. Vanish is also implementing deposit screening with Elliptic and OFAC-level geoblocking to prevent illicit use.

Our Vision for the Future

Vanish is not just a feature; it's foundational infrastructure. We are confident that its privacy solution will become an essential component of the Solana trading stack. The team's long-term vision to progressively decentralize the platform and expand into new financial products like perpetuals demonstrates their ambition to build a lasting, indispensable protocol.

We believe Vanish represents a pivotal step forward in the evolution of decentralized finance, and we are proud to partner with them on this journey.

There are many designs for money markets in Defi, however they can largely be grouped into monolithic (e.g. Aave) and Isolated (e.g. Morpho). Euler introduces Modular money markets - flexible vaults infrastructure enabling fully composable markets and strategies.

The Need for Modularity

Monolithic money markets are extremely capital efficient, pooling collateral from all users together to enable deep liquidity and competitive borrowing rates. However, this means that all TVL is potentially at risk, thus governance is extremely involved, restricting asset selection and setting very conservative risk parameters (Collaterisation Ratio, Loan To Value, etc).

On the other hand, isolated money markets provide flexible asset creation, however fragment liquidity, reducing capital efficiency and liquidity depth. For Example, Morpho has listed many assets like Pendle PT’s, however the USDC collateral provided to these markets is fragmented, resulting in low liquidity and high borrowing rates.

Monolithic and Isolated money markets both have advantages and disadvantages, meaning that users are required to make constant compromises when utilising each. There is already an influx of new retail, institutional, fintech and tradfi participants seeking to leverage blockchains for yield, however no existing products can be customised and adjusted to cater to all of their differing needs. This is where Euler’s modular design shines.

Euler Explained

Euler reimagines lending markets by breaking money markets down into simple core components that can be composed on and customised to cater to all existing and future user profiles, and their respective risk appetites.

At it’s core Euler leverages EVK (Euler Vault Kit), a highly flexible ERC-4626 standard vault based system allowing for permissionless vault creation + deployment and EVC (Ethereum Vault Connector) to connect vaults to one another.

• ERC-4626 - Euler vaults are adhere to Ethereum’s vault standard ensuring a simple and seamless developer experience

• EVK (Euler Vault Kit) - simplifies creating, customising and deploying Euler vaults. Enables curators and developers to easily define risk parameters (LTV, custom interest rates, etc)

• EVC (Ethereum Vault Connecter) - Router that allows vaults to communicate, enabling pooled risk, shared collateral, and strategy composition.

All existing lending market functionality can be replicated by by composing on each these 3 core components. For example, an Euler vault can be launched as an isolated lending market like Morpho, or many vaults can communicate with one another via EVC to replicate Aave’s monolithic design.

Looking Forward

Composability in Defi took a backseat over the last 1-2 years as Ce-Defi protocols like Hyperliquid were able to provide UX’s that Defi could not compete with. Composability is back, with existing primitives being reimagined to enable new novel use cases. Euler is positioning itself as the liquidity layer to support all of Defi’s credit use cases.

In the future, Euler will have many new primitives hosted on top of it - Euler built the first (Euler Swap) themselves, to showcase the power of unified liquidity layers. Euler Swap (beta launched in June 2025) is a DEX built on top of Euler’s vaults that turn idle lending liquidity into productive capital by earning swap fees, and still be used as collateral within Euler via EVC.

For example, if a user wants to swap 100 USDC for 100 USDT, a Euler vault might supply 100 USDC as collateral, and borrow 100 USDT which is provided to the user. In essence, Euler Swap enables the borrowing of output tokens by using input tokens as collateral while a swap is in flight. This JIT liquidity is extremely efficient, enabling up to 50x capital efficiency - the most of any AMM in the industry (Fluid is next highest with 39x). The efficiency of Euler Swap is only possible due to the ability to leverage in-protocol (i.e. borrow assets against your LP and re-LP).

Composability Examples

Example 1 - Composability Illustrated

Vaults are completely composable, enabling developers to tap into liquidity from elsewhere in the Euler Liquidity Layer. E.g. The ETH/USDC vault resembles an isolated market on Morpho, which can then be used to provide liquidity to other vaults.

Example 2 - Monolithic Markets

Composability can be leveraged to create monolithic market structures. E.g. ETH, BTC and USDT vaults can be used as collateral to borrow USDC - this resembles something like Aave or even MakerDAO.

Example 3 - Primitives Reimagined: Euler Swap

Composability has the potential to reimagine how existing primitives work. E.g. Euler Swap enables a spot market to be built on top of the deep liquidity within Euler’s Liquidity Layer.

Born from the ashes

Michael Bentley, Euler v2’s founder, is a Defi visionary. Euler v2’s core concepts and most innovative ideas (e.g. Modular Lending Vaults, Isolated Markets, EulerSwap) were being discussed in 2021, right when disaster struck. Euler was hacked for over $200m. Michael and core team members stuck together, first working to recover all lost funds and then rebuilding with a security focus. Now, Euler v2 is one of the most audited Defi protocols with millions of dollars invested into security, over 45 audits completed and a million dollar bug bounty program.

Not only has this team continued innovating in Defi, the resurgence to $1.2B TVL is extremely impressive.

Growth Metrics

Euler’s TVL has been growing quickly since the launch of Euler v2, currently sitting at ~1.2B, while it’s FDV has only 3x’d in the same period.

Borrowers love Euler, with consistently high utilisation rates (51%) compared to competitors (Morpho 35%, Fluid 44%). This also gives Euler an extremely attractive FDV/TVL ratio at 0.13x vs Morpho at 0.21x and Fluid at 0.19x.

Users, fees and TVL thus fees, have been growing steadily with over $2B in TVL and 1.5M in total fees in ~6 month period.

The Euler Swap beta period ran for roughly 2 weeks, and facilitated >$1B in trading volume on very small TVL. Although this is a very small sample size, early signs of huge potential are there.

Potential Future Tailwinds

For Defi Natives:

• Airdrop and points farmers already prefer Euler for leveraging exposure due to low execution fees compared to other looping apps like Contango

• Euler enables permissionless long tail asset markets, where deposited collateral can still be used within Euler ecosystem via EVC

• Euler’s Liquidity Layer will host a plethora of new Defi primitives and paradigms like Spot Trading, Perpetuals, Delta Hedged LP Vaults, etc.

For Retail Investors:

• Curator managed vaults provides investors with confidence when depositing

• Deposits will contine to earn even higher boosted yields as more protocols are built using EVC - e.g. via Euler Swap

For Institutional

• Institutional products with tailored risk parameters and functionality will allow users to deploy capital with confidence

• Customised vault products which fit their investment appetite, e.g. fixed interest rate borrowing

Euler Swap Adoption

• Stable Swap Dominance: Highly capital efficiency protocols like Fluid have already flipped Curve in daily volumes. As Euler Swap is even more capital efficient, it should take large market share - although there are early signs as seen in the Euler Swap metrics above, this is still TBD since Euler Swap is still in beta.

• By aligning with Uniswap and building on top of Uni v4 hooks, Euler Swap will receive considerable Uniswap order flow (p.s. Euler is also the top project on Unichain in terms of fees and TVL).

Conclusion

With modular vaults, plug and play liquidity layers, and a composability first design, Euler is not just a better lending protocol, it’s a credit operating system. The DeFi ecosystem has lacked a native infrastructure layer that can adapt to the needs of DAOs, institutions, and sophisticated users. Euler is now poised to fill that role.

However, here we want to focus on the expanding distribution that Hyperliquid has via Builder Codes.

Overview

Builder Codes are a core strategic innovation by Hyperliquid introduced in October 2024. They allow any developer to build a frontend (bot, wallet, app) on top of Hyperliquid’s backend and earn a share of trading fees routed through their interface. This flips the traditional user acquisition model: instead of spending on marketing, Hyperliquid incentivizes developers to drive growth by integrating trading functionality directly into their own products.

Hyperliquid charges builders 0bps on maker volumes and 2bps on taker volumes. Hyperliquid rebates 0.5bps on taker volumes back to Builders as a referral fee. Builders have the flexibility to bake in their own fees on top of the 0bp maker / 2bps taker fees that Hyperliquid charges.

Strategic Impact

The model represents a distribution engine that decentralizes product delivery:

• Developers don’t need to build matching engines or attract liquidity.

• Hyperliquid offloads user acquisition and innovation to a network of third-party builders.

• Liquidity is shared across all interfaces, increasing depth and efficiency as more builders onboard.

Builder Codes are becoming Hyperliquid’s tentacles, stretching and reaching users in multiple ways through 3rd party apps integrating its liquidity. And the best part is these trading volumes funnel right back to Hyperliquid’s ecosystem, solidifying it as the best decentralized liquidity source.

Adoption & Metrics

Builder Codes are already starting to drive significant volume to Hyperliquid. With the release of Phantom’s perp product, daily perp volumes from Builder Codes recently reached a peak of $900M.

Source: Flowscan.xyz / Pivot Global

For context, when Builder Code volumes reached $900M in volume on July 22nd, Hyperliquid’s total futures volume was $16.5B. That means Builder Code volumes can already contribute 5.5% of Hyperliquid’s total volumes.

At the moment, the top builder by volume is Insilico with 7D Average Daily Volume (ADV) of $298M, and peak daily volume of $478M. 

Phantom’s Hyperliquid integration was a significant one. In just a few weeks, Phantom has achieved 7D ADV of $184M, and peak daily volume of $245M. This trading volume was generated by ~5,000 average daily users. 

For context, in April 2025, Phantom reportedly had 15M monthly active users. The Phantom integration is just getting started. What happens when more Phantom users realize that they can trade Hyperliquid perps seamlessly in their wallet? What happens if other mobile wallets or fintechs follow suit? Builder Codes have the potential to make an even more significant impact on Hyperliquid trading volumes in the future.

The above volume chart only takes into account the 21 Builders being tracked by Flowscan. According to Hypeburn.fun, there are 185 different teams working with Builder Codes. Now, not all of these will be as significant as Insilico or Phantom - many of these could just be testing or experimenting with ideas. However, we have anecdotally heard of a few big potential apps that are planning to use Hyperliquid Builder Codes that haven’t gone live yet.

Takeaway

Builder Codes are a fundamental distribution layer. They enable Hyperliquid to scale horizontally through external products, lowering CAC, enhancing liquidity, and creating a flywheel of user onboarding, all while reinforcing its backend-first, protocol-as-infrastructure approach to 3rd party distribution.

Considering Builder Codes in addition to upcoming HIP-3, where anyone with 1M HYPE can use Hyperliquid’s infrastructure to deploy their own perp-markets (think equities, RWAs, etc.) and you start to realize:
Hyperliquid’s tentacles are spreading a lot faster than you realize.

Our thesis is that memecoins are not a passing trend, they are here to stay and will continue to evolve both in form and market significance. We wrote previously about how Solana is the best venue for trading digital assets. Now, we believe that investing into Pump.fun represents the cleanest expression of our conviction in the memecoin market, full-stack ownership: seamlessly integrating the entire lifecycle of memecoins, from creation and discovery to trading and community engagement.

Pump is a vertically integrated crypto platform that began as a memecoin launcher but has rapidly evolved into one of the most culturally dominant products on Solana. At its core, Pump enables anyone to create and trade tokens within seconds through its flagship product, Pump.fun. These tokens follow a bonding curve model that automatically sets price and liquidity, making memecoin speculation accessible to anyone with a few cents of SOL. But Pump is more than just a tool for launching and trading speculative tokens, it is building an entertainment and social finance platform designed to onboard the next generation of crypto users. By fusing elements of Twitch, TikTok, and Robinhood into a single product experience, Pump aims to make trading fun, interactive, and creator-driven. From memecoins and trading to livestreaming and viral content, Pump is positioning itself not just as an app, but as a new cultural layer where media, speculation, and social engagement converge.

Pump’s grand vision is to redefine the intersection of crypto and media, transforming speculative memecoin culture into a full-fledged entertainment and financial platform. With ambitions that blend the mass onboarding mechanics of Robinhood, the content virality of TikTok, the financial trading experience of Binance, and the community engagement of Twitch, Pump is taking a generational swing at making crypto native to internet culture. The team's focus is clear: move beyond short-term memecoin cycles and build an entertainment-centric ecosystem that can onboard the next wave of users not through financial speculation alone, but through content, personalities, and participatory media. Pump isn’t just trying to win crypto; it’s aiming to make crypto invisible, abstracted into livestreams, memes, social trading, and media-native token economies.

Valuation Analysis

Pump.fun ranks among the most successful revenue-generating crypto applications in history. Despite inherent volatility in memecoin markets, Pump has consistently generated substantial revenue, with an average of $2.1 million per day in June 2025. It is also rumoured that Pump will implement a token buyback with at least 25% of their revenue which represents one of the few tokens in the space that has value accrual of this magnitude. 

Pump’s user growth has been both explosive and resilient, showing a consistent upward trajectory even during periods of reduced memecoin trading activity. From 2.2 million users in June 2024 to nearly 13 million in May 2025, Pump has achieved a nearly 6x increase in monthly active users in just under a year.

Based on comparative valuation metrics, Pump.fun appears either undervalued or moderately fairly priced relative to its peers, particularly when assessing its Price-to-Sales ratio, which stands at 6. This places Pump.fun well below the valuation multiples of most leading trading focused crypto protocols, despite generating some of the highest daily revenue figures in the space.

Compared to Hyperliquid, a fellow cycle-defining product, Pump’s multiple is dramatically lower (57x for Hyperliquid vs. 6x for Pump), suggesting that much of Pump's growth and monetization potential may not yet be priced in. 

Looking at the token distribution, the team and existing investors are subjected to a 1-year lock and on day one, the majority of the circulating supply will be held by ICO participants who entered at a $4 billion valuation, establishing a strong price anchor, as there should be limited sell pressure below that level. Additionally, the team is estimated to have amassed approximately $2 billion in cash reserves after their ICO, trading below their enterprise value would be highly unlikely. There is asymmetric upside potential, as price discovery is likely to trend upward from the ICO anchor point, with limited immediate supply available below that valuation.

Growth Levers

Verticalization

A critical growth lever for Pump lies in verticalization, owning every part of the user journey to maximize margins and defensibility. The launch of Pump.swap is a prime example, as it successfully displaced Raydium as the default trading venue for newly launched tokens. This move has already begun to pay off, with Pump.swap now constituting an increasing share of total protocol revenue. The team has already demonstrated their ambition with their most recent acquisition of kolscan - a tool for trading analytics and copytrading. We suspect future verticalization efforts are even more ambitious. Possible areas of expansion include exploring the launch of a native stablecoin, which could replace SOL as the primary base pair on Pump.swap. Beyond spot trading, it would be logical for Pump to eventually enter the perpetuals market, recognizing that many of its tokens end up being traded on venues like Binance or Hyperliquid. By introducing perps directly within the Pump ecosystem, the protocol can capture downstream volume currently leaking to competitors. In the near term, it is highly probable that Pump will look to either acquire or build their own trading terminal. Leading competitors like Axiom have demonstrated consistency in their revenue figures despite the influx of downstream competition in the launchpad and dex space. Owning this layer would not only boost revenue but also deepen its control over user behavior and trade execution.

Live Streaming

Perhaps the most disruptive lever in Pump’s growth strategy is livestreaming, its boldest bet on combining entertainment and crypto. After experimenting with live video content earlier in its lifecycle (and facing initial challenges with moderation), Pump has reintroduced streaming in 2025 with a renewed focus on memecoin-native culture. In this new iteration, the platform blends Twitch-like interactivity with token-gated experiences, bringing on high-profile streamers such as the anonymous trader Gainzy to anchor early content. Livestreaming offers massive surface area for engagement, from tipping in memecoins to live token launches and sponsored segments. To accelerate this vision, Pump is preparing to launch a creator incentive fund, aimed at attracting top-tier livestream talent and accelerating the network effect of content-meets-crypto. If successful, this could mark a turning point, turning Pump into a social media-fintech hybrid with multiple high-margin monetization paths.

Conclusion

While Bonk has captured meaningful attention in recent days, bolstered by memecoins like USELESS and personalities such as Bonkguy, history has shown that new launchpads consistently struggle to sustain momentum against Pump.fun. Despite repeated attempts to chip away at its dominance, none have managed to replicate its staying power.

We view Pump.fun as the most ambitious and forward-thinking team in the space, with a strong track record of vertical integration. From prioritizing mobile development to expanding into adjacent verticals like livestreaming—and potentially even real-world commerce—their roadmap clearly targets onboarding users beyond the crypto-native crowd. We believe Pump is not only the current market leader, but also the best-positioned to define the future of user-generated digital assets.

At a glance, Concrete might seem like another DeFi protocol offering higher yields and cross-chain capabilities. But dig a little deeper, and you’ll realize it’s aiming to rewrite the playbook on how users interact with on-chain credit. Concrete is building what we believe will be the new standard for credit in DeFi, a system where users don’t have to piece together complex strategies across fragmented platforms. Instead, they get automated yield generation, unified margin accounts, and liquidation protection all in one seamless flow.

This isn’t just about better borrowing or earning, it’s about creating a credit layer that’s intelligent, protective, and composable from day one. Whether you’re farming EigenLayer points with leverage, hedging a funding trade, or just looking to safely borrow against volatile assets, Concrete’s architecture handles the complexity behind the scenes. Users are left with a smooth, intuitive interface that unlocks the full potential of their capital, no spreadsheets, no panic over liquidation thresholds, and no need to jump between protocols. This is the credit engine DeFi should have had all along, and with Concrete it’s finally here.

On Solana, this same vision takes form through Glow, a fully native protocol designed for fast, composable DeFi. Glow introduces on-chain margin accounts that let users earn yield, borrow against their deposits, and execute leveraged trades, all within a single smart contract wallet. The brilliance of Glow lies in its simplicity through Glow Recipes, users can execute complex strategies like delta-neutral LRT farming, pair trades, or leveraged long positions in just a few clicks.

Four Pillars, One System: Borrow, Earn, Protect, Trade

DeFi today is powerful, but it's fragmented, inefficient, and frankly intimidating for most users. Borrowing is still expensive and overcollateralized. Yield strategies require constant monitoring and juggling. And liquidations? They're brutal, often leaving users wrecked while bots profit off their losses.

Concrete doesn’t just patch over these problems. It rearchitects them from the ground up by combining four essential DeFi primitives, Earn, Borrow, Protect, and Trade into one tightly integrated system. The result is a credit layer where capital can move intelligently, yield can be automated, and risk can be actively managed, not just endured.

Earn

Concrete's Earn Vaults are the beating heart of the ecosystem. Users can deposit assets like ETH, USDC, or LSTs such as LBTC into these vaults and earn yield through actively managed strategies. Instead of locking funds into rigid vaults, users receive Liquid Vault Tokens (LVTs), tokenized yield-bearing receipts that remain composable across DeFi. You can use LVTs as collateral, margin them in lending markets, or even trade them on secondary markets. Think of them as the DeFi-native equivalent of a money market fund share—productive, liquid, and versatile.

Earn is also where Concrete’s B2B infrastructure shines. Top protocols like EigenLayer and Lombard are already partnering with Concrete to optimize yield distribution across AVSs or offer custom vault strategies to their user bases. For protocols seeking yield-maximizing vaults with plug-and-play integration, Concrete becomes a powerful backend.

Borrow

Most DeFi lending markets are isolated pools with fixed parameters. Concrete changes that with a more flexible, cross-market borrowing experience. It integrates with external money markets like Aave and Compound, allowing users to access the best real-time borrowing rates across chains. It will also offer its own money market, the go-to destination for borrowing against Concrete-issued derivatives such as LVTs.

This dual approach gives users choice, rate optimization, and a unified interface to manage loans across platforms. Borrowing becomes smarter, cheaper, and more capital-efficient. And by embedding Concrete Protect directly into the borrowing flow, users get liquidation insurance built in from the start.

Protect

Liquidations are one of DeFi’s biggest UX failures. On protocols like Aave or Compound, liquidation bots ruthlessly race to grab undercollateralized positions, often leaving users with slashed assets and little recourse. Concrete flips this dynamic with Protect, an active credit protection engine that steps in before liquidation thresholds are hit.

Here’s how it works. If your position gets close to liquidation, Concrete uses a flash loan to pay off the debt instantly, charges a small fee, and closes the position safely. You keep your assets. In many cases, users don’t even realize how close they were to liquidation. It’s handled automatically in the background. The protocol earns revenue from these protection fees, creating a more sustainable business model that doesn’t rely on mercenary liquidators.

Even better, this protection layer allows money markets to onboard riskier or more exotic collateral, like long-tail tokens or newer LSTs, without exposing themselves to bad debt. 

Trade
This is the most forward-looking component, but also one of the most exciting. Concrete doesn’t just tokenize yield via LVTs. It also enables the tokenization of loans themselves. Imagine being able to sell a debt position or the rights to future yield without repaying the loan. Or imagine a secondary market for credit risk: shorting a high-risk borrower, hedging liquidation exposure, or buying discounted protected loans.

That’s what the Trade layer unlocks. It turns passive positions into tradable, liquid instruments. Think of it as the early days of CDS, credit default swaps, but on-chain, transparent, and programmable.

This will take time to reach full adoption, but the infrastructure is being built now. As liquidity deepens and traders seek new primitives to express market views or hedge risk, we believe Concrete will become the foundational layer for an entirely new class of on-chain credit derivatives.

Why This Matters
In isolation, each of these features is powerful. But it’s their composability that makes Concrete so differentiated. LVTs from Earn can be margined in Borrow. Loans in Borrow can be protected with a click through Protect. Protected loans can be traded in the Trade layer, creating liquidity on previously locked capital. It’s a self-reinforcing loop where each part strengthens the others.

Concrete’s architecture makes the experience modular, clean, and user-centric, all while plugging into existing ecosystems like Morpho, EigenLayer, and Lombard.

Put simply, Concrete turns DeFi from a set of disconnected tools into a unified system for automated yield, flexible borrowing, and intelligent risk management. This is the credit layer DeFi has been waiting for.

Not Just EVM: Glow on Solana

We’ve long held the belief that Solana will eventually require its own DeFi-native infrastructure. Its high throughput and low latency enable products that simply can’t be built on EVM. But culturally and technically, Solana is a different beast. Concrete recognized that too, which is why they didn’t just fork the EVM stack, they acquired Jet Protocol and rebranded it as Glow, a new Solana-native lending protocol that brings Concrete’s credit vision to life in a distinctly Solana way.

Most lending protocols on Solana today, whether they’re built on traditional pooled models or newer permissionless rails, tend to isolate positions. You lend in one pool, borrow from another, and your margin is siloed and inflexible. Glow changes that completely. It introduces on-chain margin accounts, allowing users to manage collateral, borrowings, and trades across multiple strategies under a single account structure all while staying composable with the rest of the Solana ecosystem.

But Glow isn’t just for advanced users or power traders. With Glow Recipes, they’ve taken complex credit strategies and abstracted them into one-click experiences. Want to leverage long sSOL and farm re-staking points? There’s a Recipe for that. Want to do a delta-neutral hedge trade and farm perpetual funding fees? One click. You can even execute pair trades like longing one asset and shorting another, with simple UI flows. This level of strategy abstraction, combined with Solana’s low-latency infrastructure, makes Glow feel more like a prime brokerage product than a traditional lending protocol.

As users increasingly straddle both EVM and Solana ecosystems, Concrete and Glow form a two-pronged approach to yield and credit that we believe will be dominant on both sides of the chain divide.

Final Thoughts

Concrete and Glow represent a rare convergence of innovation, execution, and market timing. They’re not trying to be the “everything app”, they’re building financial infrastructure that everything apps will plug into. For us, this wasn’t just a bet on better yields or smarter credit markets, it was a bet on a new standard for how capital is borrowed, protected, and grown across crypto.

We're proud to back them, and we’re excited to support them as they help define the next chapter of DeFi.

Pendle Finance introduces a novel mechanism that splits an asset's future yield from its underlying principal. This process transforms any yield-bearing asset into two distinct and tradable components, creating a liquid market for trading yield.  

The core mechanism operates as follows:

1. A user deposits a yield-bearing asset, such as Lido's Staked Ether (stETH) or Ethena's delta-neutral stablecoin (sUSDe), into the Pendle protocol.

2. Pendle wraps this asset into a Standardized Yield (SY) token. 

3. This SY token is then split into two new tokens with a fixed maturity date:

   • Principal Token (PT): represents the underlying principal of the deposited asset. It is redeemable 1:1 for the underlying asset upon maturity. Functionally, a PT is the DeFi equivalent of a zero-coupon bond; it trades at a discount to its face value and converges to par at expiry.  

   • Yield Token (YT): represents the yield generated by the underlying asset until the maturity date. Its value is derived from the market's expectation of future APYs and decays over time as the yield is accrued.  

This creates a permissionless interest rate trading market where participants can execute sophisticated strategies that were previously impossible in DeFi. Users can:  

• Lock in Fixed Yield: By selling their YT immediately after depositing an asset, users receive an upfront cash payment for their future yield. This helps a user lock in a fixed return and hedging against yield volatility.  

• Speculate on Yield: Traders who believe that the APY of an asset will rise can purchase YT on the open market. If the actual yield generated exceeds the market-implied yield at the time of purchase, the trader profits. This allows for pure, leveraged speculation on interest rate movements.  

• Acquire Assets at a Discount: By purchasing a PT, investors can acquire the underlying asset at a discount to its current market price, with the guarantee of redeeming it at full value upon maturity. This is an attractive strategy for long-term holders who are willing to forgo variable yield in exchange for a lower entry price.  

This framework positions Pendle not as a competitor to DeFi yield protocols, but as a crucial, second-order market layer built on top of them. Pendle has established itself as a complementary and indispensable "money lego" in the broader DeFi ecosystem.

Riding the Secular Tailwinds of Stablecoin Expansion

Pendle is positioned at the confluence of powerful secular trends that are reshaping the digital asset landscape. The most significant of these is the expansion of the stablecoin market, which is transitioning from a niche crypto product into a global payment and settlement layer.

Stablecoins have demonstrated a clear product-market fit that extends beyond a means for speculative trading. The data paints a picture of explosive growth:

Market Size: The total market capitalization of stablecoins has more than 8x since 2021, currently exceeding $250Bn

Transactional Volume: The most compelling metric is transactional utility. Visa estimates stablecoin transaction volume to be $5.67 trillion in 2024, growing to more than $4 trillion for the first 6 months of 2025. This is on pace to exceed both visa and mastercards annual transaction volumes within the next few years.

This growth is driven by the inherent advantages of stablecoins: near-instant settlement, global accessibility, and dramatically lower transaction fees. 

The Yield-Bearing Revolution

Within this burgeoning market, a specific sub-sector is emerging as a key growth vertical: yield-bearing stablecoins. These are stablecoins that pass the yield generated from their underlying asset directly to its holders, transforming a static digital dollar into a productive asset.  

This segment is experiencing exponential growth:

• From representing less than 1% of the total stablecoin market at the start of 2024, yield-bearing stablecoins now account for over 4% of the market, with a total issuance exceeding $10 billion.  

• Pendle is at the epicenter of this revolution. The protocol currently has over $4 billion in yield-bearing stablecoins locked within its smart contracts, representing 40% of the entire supply.  

As the market matures, more capital will flow from zero yield stablecoins (USDT/USDC) to productive, yield-bearing alternatives. We expect that yield-bearing stablecoins will eventually capture 15% of the total stablecoin market, which would equate to a $75 billion market in a $500 billion total stablecoin landscape. Pendle is poised to capture a significant share of this inflow.  

Favorable Regulatory Headwinds

Recent developments in the US are powerful tailwinds that are legitimizing the asset class and paving the way for institutional adoption.

• Executive Endorsement: The public endorsement of stablecoins by US Treasury Secretary Scott Bessent as a "new channel of strategic demand" for US debt represents a monumental shift in governmental tone towards acceptance.

• SEC Precedent: In February 2025, the SEC approved Figure Markets' YLDS, creating the first-ever regulated, yield-bearing stablecoin registered as a public security. This approval establishes a clear compliance pathway for future issuers.  

• Legislative Clarity: The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act represents the most significant step towards crypto regulation in US history. In June 2025, the Senate passed the bill with bipartisan support (68-30 vote), signaling a high probability of passage. The act aims to establish a federal framework for payment stablecoins, mandating 1-to-1 backing with cash or short-term Treasuries and implementing clear rules for issuers.  

We see this regulatory clarity as an accelerant for Pendle. The GENIUS Act creates a more transparent and compliant environment that is palatable to conservative institutional capital. This directly benefits Pendle's strategy, particularly its "Citadels" initiative, which is designed to onboard KYC-compliant institutions into permissioned yield products. 

Pendle's Growth Playbook

Points Meta

Pendle's growth has been supercharged by its role as the central hub for the "points meta," particularly during the highly anticipated Eigenlayer restaking narrative from January to May 2024. Protocols launching new tokens offered "points" to users who deposited capital, with these points promising a future airdrop of their native token.  

Pendle became the primary venue for users to speculate on these airdrops via accruing points. Users could use YT to gain leveraged exposure to the points being generated. This created a symbiotic relationship:

• For Users: Pendle offered a tool to amplify their airdrop farming strategies.

• For New Protocols: Pendle served as a low-cost liquidity bootstrapping hub

Pendle's TVL exploded by 30x, reaching a peak of nearly $7 billion in June 2024. Pendle was also responsible for driving an estimated 50% of Ethena's initial $3 billion in deposits.

From Mercenary to Sticky Capital

Many speculated that the capital from this explosive growth was purely "mercenary" and would disappear post airdrops. Pendle proved them wrong by successfully converting speculative inflows into durable, long-term TVL.

Pendle established itself as the default marketplace for yield-bearing assets. Long after the initial Ethena points campaign concluded, Pendle continues to retain approximately 50% of the total circulating supply of Ethena's USDe within its pools. Pendle has turned this into a repeatable playbook - onboarding new cohorts of stablecoin issuers and yield-bearing assets (such as Syrup, Reserve, and Usual) by initially facilitating incentive campaigns, and then transitioning them into core, long-term markets on the platform.

vePENDLE Flywheel

Pendle vote-escrowed token model accrues value back to token holders, creating a virtuous cycle that aligns the incentives of protocol participants.  

The mechanics are designed to reward long-term commitment:

• Locking: Users lock their PENDLE tokens for a period of up to two years to receive non-transferable vePENDLE. The longer the lock duration, the greater the amount of vePENDLE received, which translates to more voting power and higher rewards.  

• Incentive Direction & Governance: vePENDLE holders vote on a weekly basis to direct the flow of PENDLE emissions to specific liquidity pools. It has sparked a dynamic where protocols compete to influence these emissions by either acquiring PENDLE or bribing vePENDLE holders to vote for their pools.

• Direct Revenue Share: vePENDLE holders are entitled to a significant share of the protocol's revenue, which is derived from two sources:  

  1. 5% fee taken from all yield (including points) accrued by YT tokens  

  2. 80% of swap fees generated by the liquidity pools they vote for  

• Liquidity Provider (LP) Boost: vePENDLE holders who provide liquidity can boost their PENDLE rewards by up to 2.5x.  

Upcoming Catalysts for 10x Expansion

PT: Leveraged Fixed Yield

This is a proven growth vector that has already found widespread product-market fit. The integration of Pendle's PTs, particularly PT-USDe, as prime collateral on major money markets like Aave V3 and Morpho have attracted over $1.5 billion in deposits.

This has unlocked a powerful new DeFi primitive: leveraged fixed-yield farming. Users can now deposit a Pendle PT as collateral, borrow stablecoins against it, use the borrowed funds to purchase more PT, and repeat this cycle. This "looping" strategy allows users to amplify their fixed-yield returns significantly, with some strategies achieving annualized returns north of 30%. 

Bitcoin Arc: Unlocking Trillion-Dollar Liquidity

This initiative targets the largest and most dormant pool of capital in all of crypto. Bitcoin's market cap exceeds $2 trillion, yet its productive use within DeFi has historically been limited due to a lack of native programmability. Through strategic partnerships with key BTCFi infrastructure providers like Babylon, Lombard Finance, and Corn, Pendle is integrating native Bitcoin yields into its platform. This taps into the underserved market of Bitcoin whales and institutions that can finally earn on-chain yield on their Bitcoin. 

Institutional Push: The "Citadels" Initiative

This represents Pendle's strategic push to onboard institutional capital by developing compliant, accessible, and familiar investment products.  

• KYC/AML Compliance: A partnership with Ethena and its new "Converge" blockchain will integrate native KYC capabilities directly into the chain. This will enable the creation of permissioned, compliant liquidity pools on Pendle, providing a regulated environment for institutions to participate in DeFi yield  

• New Product Lines: Pendle is also exploring Shariah-compliant yield products, opening the door to the rapidly growing Islamic finance market

Aggressive Cross-Chain Expansion

While Pendle is currently dominant within EVM ecosystems, the protocol is pursuing an aggressive expansion into high-growth alt-L1 ecosystems to capture new users. The public roadmap includes plans for launching on Solana in Q3 2025, with further integrations planned for Hyperliquid and TON as well. 

"Boros": Funding Rate Markets

Perhaps the most ambitious growth vector is "Boros," a new product vertical that targets funding rates derived from the largest market in crypto: perpetual futures. The crypto perpetuals market boasts a staggering daily open interest of ~$150 billion with trading volumes that are often multiples of spot markets.

A critical component of this market is the "funding rate," a periodic payment exchanged between long and short positions to keep the futures price anchored to the spot price. These rates can be extremely volatile. Currently, traders and institutions have no reliable or scalable way to hedge these funding rate fluctuations.  

Pendle's upcoming "Boros" product creates a marketplace for funding rates. This will allow users to either hedge by locking in a fixed rate or speculate on future funding rates. This is a massive untapped market and a natural extension of Pendle's core products. It transforms Pendle into a risk management hub for the crypto derivatives market, expanding its potential user base to include major trading firms, market makers, and sophisticated derivatives traders.

Conclusion 

Pendle Finance has established itself as a foundational piece of DeFi infrastructure. It created the on-chain market for interest rate derivatives, and has successfully found strong product market fit with durable TVL looking for stablecoin yields. 

We believe that Pendle is one of the largest beneficiaries of this powerful secular tailwind - stablecoins. Its competitive moat is complemented with deep ecosystem integrations, and a powerful tokenomics flywheel that creates sticky liquidity and aligns long-term incentives.

The path to future growth is clear, targeting the largest pools of untapped capital in the digital asset space: institutional fixed-income, native Bitcoin yield, and funding rate derivatives. We think that $PENDLE represents one of the most compelling long-term liquid investment opportunities today.

Why Ephemeral Rollups?

ERs in MagicBlock are specialized, transient execution environments designed to enhance the scalability and performance of decentralized applications on the Solana blockchain. Leveraging Solana's account-based architecture and parallel execution capabilities, ERs allow developers to temporarily delegate specific state accounts to a dedicated auxiliary layer. This delegation enables a configurable runtime that operates independently, facilitating ultra-low latency (as low as 10 milliseconds) and high-throughput transaction processing without compromising the composability and integrity of the base layer.

The process begins with state delegation, where developers lock one or multiple accounts to an ER via the Delegation Program, specifying parameters such as lifetime and update frequency. A sequencer then temporarily modifies the state within this rollup. Importantly, even as accounts are delegated, transactions on the base layer can still read their state, ensuring compatibility, while non-delegated accounts remain fully modifiable and unaffected.

ERs offer several customizable features, including gasless transactions, faster block times, and integrated scheduling mechanisms akin to Clockwork for automated transaction execution. These capabilities make ERs particularly suited for real-time applications like gaming, finance, AI agents, and DePIN.

Throughout their operation, ERs maintain seamless integration with the Solana ecosystem. Programs and assets reside directly on the base layer, ensuring that any improvements or advancements at the base layer are immediately available without the need for modifications or redeployments. Transactions are dynamically routed to the appropriate execution layer—base or ephemeral—via specialized RPC providers, optimizing execution and preserving a seamless user experience.

Upon completion of the specified operations, the ephemeral state is committed back to the base layer, including new state and relevant pointers. This state is finalized using a fraud-proof mechanism to ensure integrity. Finally, accounts are undelegated via the Delegation Program, returning control to the original owner. This approach ensures that applications can scale horizontally and handle millions of transactions per second while maintaining the composability and security inherent to Solana's architecture.

Huge Market Opportunity 

MagicBlock’s technology is profoundly extensible. While the team initially targeted fully on-chain gaming—one of the few domains demanding low latency, high throughput, and composability—the implications stretch far beyond. We see MagicBlock as a foundational primitive with the potential to transform execution across DeFi (orderbooks, MEV auctions), AI agents, payments, DePIN, NFT mints, airdrops, and more. The total addressable market is massive: these verticals already command billions in cumulative volume, and all share a common constraint—scalability without sacrificing composability. MagicBlock’s model unlocks that.

We foresee near-term adoption in:

• DeFi: CLOB acceleration, MEV protection via batch auctions, flash-mint-style primitives.

• Payments and Agent Systems: AI agents executing tasks within gasless, isolated but composable runtime environments.

• DePIN and Attribution Markets: Campaigns and sensors operating in ERs with L1-settled rewards.

The unifying theme is custom performance without giving up access to Solana’s ecosystem.

World class agile team

The founding team behind MagicBlock, Andrea and Gabriele, began their journey initially focused on building fully on-chain game experiences. However, it was through this work that they uncovered a far deeper insight: the same execution engine designed to support immersive, real-time gaming could serve as a foundational primitive for an entirely new class of high-performance, composable applications across a variety of verticals. Their partnership with Flash Trade—a real-time perpetual DEX offering instant execution—is a compelling example of this broader vision in action, demonstrating how Magic Block's architecture can unlock sub-10ms latency for DeFi protocols without sacrificing base-layer composability. Andrea and Gabriele are representative of founders we want to back - high-velocity team that combines deep technical expertise with relentless execution. We are proud to work together with them on this journey. 

Concluding Thoughts

We invested in MagicBlock because it offers the best path to scale Solana without breaking its most powerful feature: composability. In a world where every L2 isolates execution, MagicBlock preserves the economic density, developer synergy, and network effects of the base layer—while extending it with lightning-fast, gasless, modular environments. It’s not just a new scaling layer; it’s a new primitive for programmable blockspace.

MagicBlock isn’t just scaling Solana—it’s extending what’s possible on Solana.

The market opportunity for DeFi is immense but remains stifled by its complexity and inaccessibility. The global DeFi TVL peaked at $180B in 2021 and stabilized at $100B today. It is projected to grow to $500B by 2030 as adoption expands beyond crypto natives. 

However, DeFi’s complexity—marked by bridges, gas fees, and manual wallet management—limits its accessibility to crypto-native power users. 

Why Glider?

Glider aims to be the middleware powering DeFi’s mass adoption. Their first product is a next-generation DeFi strategy building platform that we believe will redefine how users—both retail and institutional—interact with decentralized finance by abstracting away complexity and democratizing sophisticated trading strategies. DeFi today is a maze of bridges, gas fees, and manual wallet management, accessible only to crypto-native power users. Glider changes that with a no-code, intent-driven ecosystem that lets anyone build, test, and execute non-custodial strategies across any token and chain—all seamlessly handled behind the scenes.

Glider’s platform comprises three core pillars—Build, Collaborate, and Automate—forming an integrated solution that simplifies DeFi while fostering a collaborative community akin to GitHub for trading strategies. With its flagship consumer product and a B2B API offering poised to transform programmatic DeFi, Glider targets both retail traders and institutional players like protocols and AI agents. Glider has the potential to redefine how both consumers and businesses interact with DeFi and significantly grow its total addressable market.

Conclusion  

Glider is redefining DeFi by making DeFi strategies accessible, efficient, and scalable. Its APIs could process a large portion of DeFi's programmatic volume, while its consumer frontend drives retail adoption. We believe Glider is poised to make trading as easy as possible—unlocking DeFi’s full potential for users and ecosystems alike.

Introduction

Fluid is rapidly emerging as one of the most innovative DeFi protocols, seamlessly integrating lending, trading, and leverage into a single liquidity layer. Built as an evolution of Instadapp, Fluid takes the foundational principles of smart contract accounts, flash loans, and leveraged yield strategies to a new level. By addressing some of the most persistent inefficiencies in DeFi—fragmented liquidity, capital inefficiency, and complex user experience—Fluid has positioned itself at the forefront of the next wave of DeFi innovation.

Unlike many other DeFi projects that focus on incremental improvements, Fluid represents a paradigm shift in the way liquidity is managed and utilized. Instead of treating lending, trading, and collateral management as separate activities, Fluid merges these elements into a seamless, unified layer. This allows for capital to be used more productively, reducing inefficiencies and unlocking entirely new financial strategies for users. With an impressive growth trajectory, groundbreaking technology, and an emphasis on composability, Fluid is not just another protocol—it is redefining the way liquidity functions in DeFi.

Fluid is built by Samyak Jain, Sowmay Jain, and Thrilok Kumar, a highly experienced team with deep roots in DeFi innovation. Fluid is a continuation of their work on Instadapp, a pioneering smart contract account platform that introduced key innovations like flash loans, DeFi Smart Accounts (DSAs), and leveraged yield strategies. With the expanded vision of Fluid, Instadapp was rebranded to Fluid.

Background & Experience

• Samyak Jain and Sowmay Jain are brothers from India who dropped out of college to focus on building DeFi applications. Their journey started with developing alternative interfaces for MakerDAO and Kyber Swap, significantly improving usability and efficiency for users.

• Their work on Instadapp introduced innovative solutions such as account abstraction, seamless cross-protocol refinancing, and automated lending strategies. These advancements laid the foundation for how modern DeFi applications manage smart contract accounts.

• Thrilok Kumar, a key contributor to Fluid, joined forces with the Jain brothers early in their journey. His expertise in smart contract development and DeFi architecture has been instrumental in designing Fluid’s highly efficient liquidity mechanisms.

The Fluid team has a proven track record of delivering high-impact DeFi solutions. Before Fluid, they successfully built multiple billion-dollar TVL protocols with zero security breaches, establishing themselves as one of the most respected teams in the DeFi space. Their unique approach of combining technical excellence with user-centric design has enabled them to consistently turn ambitious ideas into widely adopted financial primitives.

Fluid is a unified liquidity layer that consolidates lending, trading, and leverage into a single, integrated system. Unlike traditional DeFi protocols that silo liquidity across separate pools, Fluid enables users to utilize their assets dynamically across multiple financial functions. By ensuring that collateral and debt are always productive, Fluid maximizes efficiency while minimizing wasted capital. This is a stark contrast to existing models where collateral is typically locked in smart contracts, generating no returns until it is actively borrowed against.

At its core, Fluid answers a fundamental question: What if lending, leveraging, and trading were integrated into one system with optimal security, gas efficiency, and capital productivity? This vision has led to the creation of a highly efficient ecosystem that eliminates the fragmentation seen in protocols like Aave, Compound, and Uniswap.

Fluid’s design is based on three key pillars that set it apart from traditional DeFi platforms:

1. Integrated Liquidity Layer – Traditional DeFi platforms treat lending, trading, and derivatives separately, requiring users to manually manage their exposure across different platforms. Fluid integrates all these financial functions into a single system, allowing users to optimize their liquidity automatically. For instance, debt on Fluid can be used as trading liquidity which generates trading APR and reduces borrowing costs.

2. Smart Collateral & Smart Debt – In standard lending protocols, collateral is idle and debt is a liability. Fluid’s unique model turns these elements into revenue-generating assets. Debt positions are used as trading liquidity to trading fees (Smart Debt). This means that instead of simply paying interest on loans, borrowers may actually offset their costs or even generate a net positive return through yield accumulation.

Likewise, Fluid DEX LP positions can be used as collateral on the lending market to simultaneously earn trading and lending fees (Smart Collateral). This creates a dual-yield mechanism, where users benefit from both lending interest and trading fees on the very same assets. 

3. Advanced Liquidation Mechanisms – One of Fluid’s most significant innovations is its slot-based liquidation mechanism, inspired by Uniswap V3. 

Traditional DeFi protocols liquidate user positions individually, often leading to excessive gas costs and over-liquidation. Fluid, however, aggregates multiple user positions into a single transaction, allowing multiple liquidations to occur simultaneously with significantly lower gas costs. 

This approach has two major benefits:

• Gas Efficiency: Instead of executing separate transactions for each liquidation, Fluid bundles them together, reducing overall gas consumption.

• Minimized Liquidation Penalties: Because Fluid’s liquidation process is more precise and spread across multiple users, it only liquidates the exact amount of collateral needed to bring a user back to a safe margin. This prevents over-liquidation and unnecessary loss of funds, with penalties as low as 0.1%–1%, compared to the industry standard of 5-10%.

Fluid’s capital efficiency is unparalleled, offering up to 39x liquidity amplification for every $1 of TVL. This is made possible through:

• Integrated DEX + Money Market – Every trade within Fluid directly impacts debt positions, adjusting collateral and debt dynamically to optimize efficiency. By embedding DEX functionality within its lending pools, Fluid allows for seamless collateral reallocation, ensuring that capital is always optimally utilized.

• High Loan-to-Value (LTV) Ratios – Unlike traditional lending protocols, where LTV ratios are capped conservatively, Fluid offers up to 97% LTV for stable pairs and 92% for volatile pairs due to its superior liquidation mechanism. This means that users can access significantly higher borrowing power without compromising system stability.

• Gas Optimization – Gas fees are a major concern for DeFi users. Fluid’s smart batching and aggregation mechanisms significantly reduce the number of on-chain transactions needed to execute complex strategies, cutting gas costs by up to 75% compared to traditional DeFi operations. This makes high-frequency trading, rebalancing, and arbitrage strategies more viable and cost-effective.

The net result of these innovations is that Fluid’s leveraged LP positions can provide deep liquidity and capital efficiency for every $1 of TVL. This translates into better swap prices and lower slippage for traders and higher yields for LPs.

Fluid isn’t just a new lending protocol or a new DEX. Rather, it represents a net new innovation in efficient liquidity usage — laying the groundwork for a new standard in capital-efficient, integrated DeFi. As adoption grows, Fluid has the potential to reshape the market, challenging incumbents like Uniswap, Aave, and Curve while unlocking new possibilities for liquidity providers, borrowers, and traders alike.

Fluid’s market size has quickly grown to $1.5B. Fluid uses the term market size which includes collateral deposited as well as debt outstanding as both sides are able to generate trading fees. They reportedly were able to achieve this without any TVL deals or liquidity incentives.

Fluid DEX’s volumes have grown steadily since the beginning of 2025 before being impacted by the general market downturn. 7D average daily volumes reached a high of $660M and currently sits at $347M across Ethereum and Arbitrum. Volumes recently tailed off due to the downturn in the markets.

Impressively, in a short period of time, Fluid has become the 2nd largest DEX on Ethereum by trading volume. Notice Fluid’s (light blue below) steady increase in market share since the beginning of 2025.

Across all EVM chains, Fluid is already the 4th largest by volume at 7% market share.

The interesting thing is that the growth has been achieved without even having a user facing DEX front-end. Volume is flowing into Fluid’s pools via DEX aggregators such as 1inch and Paraswap as well as from arbitrage and MEV bots. Fluid will eventually integrate with additional aggregators to drive more volume.

The FLUID token is the governance token of the Fluid ecosystem, allowing token holders to participate in decision-making processes. 

In terms of value accrual, Fluid only imposes a take rate on its lending business. Fluid currently does not take a share of trading fees, though its official docs have a specific section that states that revenue shares can be turned on through governance voting.

Tokenterminal currently only captures Fluid’s existing revenue stream from lending of $2M YTD, or $8M annualized.

However, Fluid plans to pass a governance proposal to direct 10% of trading fees to protocol revenue. Fluid estimates this to equate to roughly 3bps of all trading volume. Assuming $500M of daily volume, Fluid could potentially add another $55M in protocol revenue. Assuming no growth, Fluid could be generating $63M in annual revenue on its existing activity. 

FLUID has a circulating market cap of $176M and a fully-diluted market cap of $447M. With fee switch activated, FLUID’s current trades at a proforma CMC/Revenue multiple of 2.8x and FDV/Revenue multiple of 7.1x. 

FLUID’s total supply is 100 million tokens, of which 40% is in circulation. The remainder is held by the team and investors (15%) and the DAO’s treasury (45%). Team and investor tokens are expected to be fully vested by June 2025. DAO treasury tokens are fully vested. In the December governance proposal which convert INST (Instadapp) tokens to FLUID, the following uses for treasury tokens were ear-marked

Growth Incentives: To accelerate Fluid’s growth to a market size of $10 billion by late 2025:

• Up to 0.25% of the total supply to incentivize Stable Lending every month.

• Up to 0.25% of the total supply to incentivize DEX activities every month.

Strategic Allocations (12% of supply)

• 2% for exchange listings

• 2% for market making

• 5% for fundraising initiatives

• 3% for team growth and initiatives

A governance proposal is being considered to institute a buyback mechanism directly linked to protocol revenue.

• Once Fluid generates $10 million annually, up to 100% of earnings go toward buybacks to support the token price.

• Buyback intensity is dynamically adjusted:

  • Higher token valuation → Lower buybacks

  • Lower token valuation → Increased buybacks to stabilize value.

• Governance determines whether the repurchased tokens are burned, redistributed, or reinvested.

Any of the following catalysts can spark a re-rating of Fluid.

• Further growth: A number of growth levers can be pulled to continue to capture DEX market share. 

  • Additional chain launches: Fluid recently expanded to Arbitrum and is seeing growth on that chain as well. A governance vote has just been completed in favor of expanding to Polygon. Further gain chain launches will undoubtedly boost volumes given Fluid’s superior capital efficiency and yield generating abilities.

  • Additional trading pairs: Fluid currently only supports swapping of stablecoins and various flavors of BTC and ETH. As Fluid’s risk model and liquidation mechanism becomes more time-tested, the team will likely expand the universe of tokens supported.

• Fluid DEX v2: The team is planning to release v2 of Fluid DEX which will enable custom range liquidity a-la Uniswap V3. In addition, users will be able to hedge their positions directly on Fluid. Fluid DEX will also become permissionless in v2 which should help Fluid expand support for more trading pairs.

• Fee Switch: Once Fluid’s fee switch is enabled, the protocol will monetize its growing DEX volume.

• Additional use-cases built on top of the shared liquidity layer, including a perp dex as well as cross-exchange bridging.

• Greater investor awareness: Despite Fluid’s success, not many investors are familiar with the name, most likely due to the recent rebrand and lack of user swap interface. Messari’s and Coingecko’s DEX leaderboard don’t even have Fluid listed as a competitor.

As such, we have built a significant position in CLOUD, the native token of Sanctum. This piece will outline our thesis on why CLOUD is currently undervalued and how they are primed for significant value capture. 

We remain highly bullish on the growth of the liquid staking sector on Solana, with Sanctum positioned as the primary beneficiary of this expansion. Solana's liquid staking ratio surged from 2.2% in January 2023 to 9% in January 2025, reflecting an impressive CAGR of 102%. This rapid growth coincides with Sanctum’s launch in August 2023, which marked a pivotal inflection point by introducing core liquidity infrastructure that enabled the proliferation of longer tail liquid staking tokens. The growth was also propelled by the launch of centralized exchange LSTs like bnSOL and bbSOL, enabled by Sanctum. Sanctum has has also quickly surged to 20% of the Solana liquid staking market share just second to Jito. 

However, the journey is far from over. While the growth is impressive, we expect the liquid staking ratio for Solana to eventually exceed 30% - Ethereum’s current liquid staking ratio. While the immediate area of growth will come from efforts to onboard retail, the introduction of CEX LSTs will open doors to increased institutional adoption of LSTs as a better alternative to native staking. We believe Solana’s liquid staking market is unlike any other ecosystem simply because it is empowered by Sanctum’s core products. Sanctum’s innovative products—Router, Reserve Pool, and Infinity Pool—empower anyone to create LSTs while maintaining liquidity, a functionality not feasible elsewhere. 

Additionally, Solana’s growing economic activity enhances the potential yield for liquid stakers. Unlike native stakers, who are excluded from lucrative block rewards - priority and base fees, LST holders benefit directly from these rewards, making LSTs a superior staking mechanism. Validators issuing LSTs have started sharing their revenue directly with token holders, ensuring that users earn a higher yield than they would with native staking alone. Major players in the space, such as DriftProtocol with dSOL, Jupiter with jupSOL, and Helius with hSOL, are actively participating in this movement, further cementing LSTs as a better choice for maximizing staking returns. The recent activation of SIMD-96 will also be a key tailwind for increased adoption of LSTs. SIMD-96 allows validators to earn 100% of the priority fees instead of burning 50%. For native stakers, validators have been unable to natively share priority fees with stakers in the protocol. We believe that this is a huge inflection point as the redistribution of priority fees back to liquid stakers will be a huge source of yield unmatched by native staking. In order to capitalize on SIMD-96, Sanctum also recently announced that they created a LST for every Solana validator which increases the number of Sanctum issued LSTs to over 1000. 

The advantages of LSTs go beyond simply accessing block rewards. LSTs offer liquidity, enabling users to stake their assets while retaining the flexibility to trade or use their LSTs within DeFi protocols. They also provide composability, allowing stakers to further amplify their yields through lending, yield farming, or collateralization in DeFi ecosystems. There is a growing ecosystem of products that are built on top of LSTs including Kamino’s Multiply vaults and also stablecoins with amplified LST yield like Hylo. 

The majority of Sanctum’s current revenue is from stake pool deposits - basically a 0.1% fee whenever SOL is deposited into any of Sanctum managed stakepools (jupSOL, bbSOL, hSOL etc.). We expect these revenue figures to accelerate further along with increased adoption of LSTs. It is also plausible that Sanctum might revamp its fee structure by transitioning from a pure deposit-based model to one centered on assets under management (Update: They have since announced an 5% epoch fee split between equally LST partners and Sanctum). Under the current system, Sanctum fees are generated solely from deposits, inadvertently encouraging churn for pool operators as it incentivizes stake to rapidly move in and out of the LSTs. By shifting to an AUM model, both the pool operators and stakeholders will have a shared interest in growing the overall value of the LST, promoting a more stable and aligned ecosystem.

We believe that Infinity is slated to see significant revenue growth as they continue to optimize the design and composition of the pool. Sanctum’s INF is a basket of LSTs, used to provide liquidity between various LSTs and also earn trading fees without giving up on staking yields. With the continued growth of the LST market, we believe that INF will be the optimal choice for most stakers for a few reasons. Firstly, INF has consistently shown that it has one of the highest staking yields because it actively rebalances for the best performing LSTs along with additional trading fees from swaps using the pool. Secondly, we believe that INF will be responsible for the majority of LST swaps in the future simply because of how it is designed to be more capital efficient than most vanilla AMMs. ​

We are thoroughly impressed by the team’s efforts in shipping out new products and features over the past year. In order to increase top funnel adoption of LSTs, the team has rolled out Creator Coins which is an unique way for people to support their favourite creators by directing their staking yield to them. The team has also closely supported the adoption of centralized exchange LSTs which has been unprecedented in terms of onboarding users into DeFi. Rolling out LSTs for every validator on Solana was a very sharp move in our opinion as it reduces the onboarding friction for validators who were only previously involved in native staking. 

In the middle stack, we are confident that the team will continue to refine the infrastructure needed to facilitate their vision of “every SOL should be liquid staked”. On the foundational layer, Sanctum is also the first Solana project to fully adopt futarchy and MetaDAO for its governance, a unique way of allowing free market dynamics to decide on major protocol decisions. Given the team’s track record, we are convinced that Sanctum will continue to innovate on all stacks to deliver the best experience for liquid stakers. 

During their TGE in July 2024, users were able to purchase CLOUD at $0.15 with a six months vesting period. Airdrops recipients may also choose to have a six months vesting period in order to receive their full unlock. The Alpha Vault and airdrop supply for CLOUD have since fully vested on January 6 2025. As of writing, CLOUD is even trading beneath the initial $0.15 alpha vault price despite their steady fundamental growth over the past six months. As such, we strongly believe that CLOUD is currently mispriced by the market and will be corrected over the long term that accurately reflects Sanctum’s value to the Solana ecosystem. 

Despite increasing annualized revenues over the past 6 months, CLOUD is currently trading within the lower bound of their earnings multiple at around 5x. 

This brings their earnings multiple to a more reasonable comparison with their peers in the liquid staking market. Along with the shift to the AUM fee model coupled with their accelerating issuance of LSTs, we expect their revenue figures to increase further ahead. 

When compared against some of their publicly traded peers on Solana, Sanctum has the lowest TVL multiple. 

In terms of token supply, 13% has been sold to investors. They invested at 50M FDV and some at 60M FDV. Their first unlock will be coming up in July 2025. where 33% of their tokens will be emitted, while the other 66% will vest linearly over 24 months after the cliff. 

Ultimately, our conviction in Sanctum is underpinned by our belief that Solana will continue to thrive and their inevitable growth of liquid staking simply wouldn’t exist without Sanctum. Looking at some of the fundamental numbers above, we concluded that this is the right time to double down on CLOUD. 

The market size of stablecoins on the Solana has also been steadily increasing, with transaction volumes consistently surpassing $2 trillion over the past few months. USDC remains the dominant player, commanding approximately 70% of the market share. This substantial growth highlights significant opportunities for new stablecoin issuers like PayPal USD and USDS. 

As outlined in our defi thesis, we have a huge interest in protocols who are preparing for a stablecoin-dominated economy which involves addressing key challenges like streamlining stablecoin issuance, improving on/off-ramp accessibility, and managing fragmented liquidity across a growing number of stablecoins. 

Why Perena?

Perena is addressing critical challenges in the stablecoin ecosystem by focusing on liquidity, interoperability, and capital efficiency. The rapid growth of stablecoins has exposed a lack of infrastructure capable of handling the diversity of issuers and stablecoins. Perena aims to bridge this gap by building a platform that supports multiple stablecoins, enabling seamless interoperability and efficient cross-chain liquidity. Current systems for swapping stablecoins, such as traditional AMMs like Orca and Raydium, are inefficient and lack scalability especially when there is increasing diversity and trading volumes of stablecoins in the market. Perena seeks to solve this by creating a multi-stablecoin liquidity pool, Numéraire on Solana, to facilitate smoother and more effective swaps between a wide range of stablecoins. By consolidating various stablecoins into a fungible, liquid token (e.g., USD*), Perena enhances capital efficiency and liquidity in the stablecoin market. USD* is essentially a LP token (also functioning as a stablecoin by itself) of a stablepool consisting of a basket of stablecoins. For users, Perena serves as a seamless solution for swapping stablecoins with significantly lower fees, making everyday transactions and cross-platform interactions more accessible and cost-efficient. Liquidity providers benefit from enhanced earning potential through concentrated liquidity and automated reinvestment mechanisms, ensuring their capital is utilized effectively while maximizing returns. For stablecoin issuers, Perena simplifies the process of issuing new stablecoins by reducing capital requirements and offering easy integration options. This not only accelerates the onboarding of new stablecoins but also fosters a more robust and diverse ecosystem.

In the near future, Perena is also expanding their infrastructure stack to include Collateralized Debt Positions (CDPs) that has improved capital efficiency as it allows users to borrow against their yield bearing stableswap LP position. Traditional CDPs pioneered by MakerDAO, while effective, often result in locked collateral that remains underutilized. merging the principles of CDPs with stable swaps could significantly improve capital efficiency. By combining the liquidity of stableswaps with CDPs, users can achieve both leverage and yield opportunities in a more efficient and integrated system.

Additionally, Perena seeks to bridge the gap between crypto-native stablecoins and their usability in traditional finance, integrating stablecoins into real-world financial applications like payroll, rent payments, and small business transactions. Perena also addresses the inconsistencies in the regulatory landscape. Stablecoin issuers often face fragmented regulations and inconsistent treatment, even within the same jurisdiction. By leveraging trusted issuers and standardized frameworks, Perena aims to ensure a unified approach to liquidity and risk management. 

Ultimately, Perena envisions creating a next-generation infrastructure for stablecoins that is inclusive, efficient, and practical. By improving liquidity, interoperability, and usability, Perena aims to establish a robust and accessible stablecoin ecosystem that benefits both consumers and businesses while driving adoption in emerging and traditional markets alike.

The Perena team is led by Anna who pioneered the stablecoin sector at Solana Foundation. During her tenure, she played a crucial role in doubling the stablecoin issuance on Solana to 3.6 billion and launching non-USD stablecoins natively on the platform. Anna has worked closely with central bankers and regulators on stablecoin regulation, driven by her vision for a sustainable and scalable stablecoin infrastructure. With her first-hand experience in growing the stablecoin market on Solana and her visionary take on how stablecoin infrastructure should be built, we strongly believe that there is no one better to lead Perena in their next phase of growth. 

DePIN, while originally standing for Decentralized Physical Infrastructure Network, has evolved into an umbrella term. It now refers to any decentralized protocol that uses tokens to create two-sided marketplaces for real-world infrastructure applications. But does this mean Bitcoin is a DePIN? Not exactly, since Bitcoin miners aren’t providing a service directly to the network's end users.

DePIN can cover a vast array of use cases, from traditional physical infrastructure projects like Hivemapper—which incentivizes dash cam installations to provide mapping services—to projects like Grass, which reallocates unused bandwidth through a browser extension to enhance online services for businesses.

Traditional infrastructure networks often suffer from centralization, leading to inefficiencies, high costs, and limited access—especially in underserved regions. Monopolies can stifle innovation and keep prices artificially high, all while leaving potential users out in the cold.

Innovation can challenge the status quo and we’ve seen many such cases in the past. Enterprise software was once dominated by billion-dollar giants like Siebel and Oracle, whose on-premise solutions locked companies into massive investments and limited flexibility. For example, a CRM deployment for just 200 users could cost a company over $1.8 million in its first year, accounting for software, hardware, training, and support. These hefty price tags were also long-term commitments, leaving companies tied to systems that often failed to meet actual user needs. These traditional solutions were usually managed by IT departments and weren’t built for team-specific workflows, which led to significant underuse—up to 65% of some companies’ Siebel licenses went untouched.

Salesforce disrupted the traditional model by introducing a fully cloud-based CRM, free of in-house servers. It was a groundbreaking move that democratized access to enterprise-grade software, and for the first time, software became an OpEx—a manageable monthly subscription—instead of a massive CapEx commitment.

Similarly, with DePIN, infrastructure doesn’t have to be a costly, centrally-managed asset. It can be a shared resource, constantly evolving, distributing the burden for CapEx and improving as more contributors join. Let’s take the example of the telecom industry to highlight the problem with some of the centralized models. 

Today, Mobile Network Operators (MNOs) like AT&T and Verizon, along with Mobile Virtual Network Operators (MVNOs), are facing unprecedented demand for data, paired with skyrocketing operational costs. Despite the increasing demand, they are slowing down CapEx expenditure because they are heavily indebted. 

In crowded urban centers, this is particularly problematic, as network congestion can lead to slow, frustrating user experiences. The rollout of 5G only raises the stakes. Compared to 4G, 5G infrastructure is much more complex and costly, and for good reason:

1. More Base Stations: 5G requires far more base stations than 4G. To deliver those lightning-fast speeds we all want, coverage has to be nearly seamless, which means more towers and equipment.

2. Higher Frequency Antennas: Each base station needs multiple antennas to support 5G’s higher frequencies and bandwidths.

3. Cutting-Edge Technology: 5G relies on advanced technologies like millimeter waves and beamforming, which, while impressive, demand a lot of energy and resources to work effectively.

If this sounds like an old-school system ripe for disruption, there are industries where it’s already happened. Take the outdated NYC taxi medallion system, where operators once held exclusive rights to the market. At their height in 2014, yellow cab medallions were selling for $1 million.

The value of medallions soared due to the city’s artificial restriction of medallions issued being limited to ~13,500. But since the proliferation of Uber, Lyft, and other rideshare apps, the medallion value plummeted as the number of vehicles for hire in NYC increased to over 120,000. With the rise of the gig economy and apps like Uber, anyone could become a driver, breaking down the monopolies that once controlled transportation.

This is exactly what Decentralized Physical Infrastructure Networks (DePIN) promise for infrastructure at large—a new gig economy where individuals and small entities can contribute resources, creating a decentralized network that brings flexibility, affordability, and local access.

Here’s why DePIN is like the next wave of the gig economy:

1. Enhanced Incentives and Network Effects:
   Tokens give participants a direct stake in the success of a network. As the network expands and the value of the token rises, everyone involved stands to benefit financially, creating a shared interest in the platform’s growth. This sense of ownership fosters ongoing contributions and engagement, leading to strong network effects. In contrast, traditional fiat payments are merely transactional, offering little incentive for continued participation once the deal is done.

   But it doesn’t stop there. Tokens can be programmed through smart contracts to reward specific actions—whether it’s completing tasks, referring new users, delivering high-quality services, or even maintaining good behavior. This automation not only streamlines the process but also enhances transparency, making it clear how participants are rewarded. Plus, tokens often come with governance rights, allowing users to vote on crucial decisions and shape the future of the network. Unlike fiat systems, which would require cumbersome external mechanisms to achieve similar results, token systems empower participants with real ownership and a voice.

   Consider the world of open-source projects. For years, dedicated volunteers and hobbyists have poured their time and energy into projects like OpenStreetMap and Flightradar24, often with little to no incentives. This usually leads to a decline in data quality and contributions over time. Projects like Wingbits are harnessing this potential, rewarding volunteers with tokens for their contributions to the flight data network. This approach not only addresses the challenges of sustainability and engagement in open-source projects but also revitalizes the community by giving participants a tangible reason to contribute.

2. Speculative Upside and Reduced Upfront Costs:
   Tokens provide liquidity and the potential for value appreciation, offering early participants significant upside potential that fiat payments cannot match. This speculative component makes tokens especially attractive to early adopters who are taking risks on a nascent network. While tokens may not hold high value initially, their value can increase as the network matures, making this a viable bootstrapping strategy. 

3. Democratizing Access and Driving innovation: By lowering barriers to entry, DePIN allows individuals and small entities to participate in infrastructure projects previously dominated by large corporations. This‬ democratization encourages innovation through diverse contributions.‬

4. Enhancing Efficiency: Reducing overhead costs by eliminating intermediaries and leveraging idle resources.

5. Debt Reduction through Direct Settlement in Gig Economy: In a token-based gig economy, direct settlement allows contributors and the platform to automatically offset what they owe each other. For instance, if a driver owes service fees but is also owed earnings, these amounts can be directly settled against each other. This removes the need for middlemen, speeds up payments, and reduces costs. 

The DePIN ecosystem is at a crucial juncture, showing early signs of adoption. Projects like Helium, Geodnet and Glow demonstrate the potential of DePIN Networks. These projects have started generating real life demand and the outlook looks better going forward, as shown by their ARR numbers below:

• Helium, a DePIN network for wireless connectivity, has found substantial success with its Wi-Fi offloading services. Through a network of Wi-Fi hotspots using PASSpoint technology, devices from partnered carriers and aggregators seamlessly offload data traffic onto Helium's network. This is currently benefiting Helium Mobile’s 120,000+ users and other carriers like T-Mobile and AT&T, with a total of 308 TB of data offloaded to date. Since Wi-Fi is far more affordable than 5G and can be scaled rapidly by converting existing infrastructure, Helium’s recent partnership with Ameriband to add 100,000 hotspots further strengthens its network coverage and capacity.

• Glow incentivizes builders to construct new solar farms as alternatives to non-renewable energy sources. Its incentive mechanism, called a "recursive subsidy," requires that all electricity savings and revenue be reinvested into additional solar projects. Builders are rewarded through two channels: GLW token rewards proportional to the farm’s electricity revenue and a USDC pool funded by electricity revenue, distributed based on carbon impact. Since its launch early this year, Glow is on track to reach $6.4 million in ARR, with $1.6 million coming from just one solar farm.

• GEODNET offers location accuracy within half an inch, far surpassing traditional satellite-based systems that provide accuracy within 10-20 feet. With real-time updates every second at a fraction of the cost, it enables automation and efficiency in industries like agriculture, construction, and transportation, while also enhancing AR/VR applications. It is seeing a 15% month-over-month revenue growth, with nearly 10,000 miners deployed worldwide. The company has also partnered with the U.S. Department of Agriculture to offer affordable RTK services to small farmers across the U.S., enhancing agricultural precision and accessibility.

There are some other notable use cases that we are looking forward to see how they pan out:

• Virtual Power Plants (Starpower): Starpower aggregates small-scale, distributed energy resources (DERs) like home solar panels, controllable loads and batteries into virtual power plants. By connecting these resources to local markets and incentivizing households to adopt renewable energy, Starpower dynamically balances energy loads, enhances grid flexibility, and lowers overall energy costs.

• Content Delivery Networks (Pipe Network): Pipe Network decentralizes content delivery using a distributed network of permissionless nodes. These nodes are run by operators around the world, creating a robust and scalable system that adapts to traffic demands in real-time. This setup not only lowers costs but also improves resilience and distribution efficiency across a global network.

As blockchain scalability and user experience continue to improve, DePIN will unlock more use cases, boosting both operational efficiency and reach. Success stories in mainstream adoption will attract more capital and build awareness among entrepreneurs, positioning DePIN as a viable model for scaling all kinds of infrastructure projects.

DePIN stands ready to redefine infrastructure conception, management, and operation, sparking a more inclusive, resilient, and dynamic global economy.

• Vaneck 

• DePIN Ninja

• Financial Times

• Helium Mobile

• Cledara

Introduction

To date, DeFi has arguably the strongest product-market fit in crypto. As of October 2024, the TVL across DeFi protocols exceeds $86 billion, indicating a gradual recovery from the lows of $36 billion seen in early 2023. DeFi protocols like Uniswap, Raydium, and Maker consistently generate the most revenue. This sustained revenue flow reflects DeFi’s potential for long-term growth. 

The growth of DeFi is further highlighted by its robust transaction volumes and increasing stablecoin adoption. In 2024, total transaction volumes across DeFi protocols surpassed $1 trillion, demonstrating strong demand from both retail and institutional users. This sustained activity underscores DeFi’s ability to facilitate seamless, permissionless financial transactions on a global scale. Simultaneously, the stablecoin market cap has expanded to over $170 billion, up from $125 billion in early 2023. This growth in stablecoin usage serves as a crucial liquidity layer for DeFi, enabling seamless access to trading, lending, and yield-generating opportunities.

Looking forward, we envision DeFi as a parallel financial system distinct from traditional finance, focusing on building separate infrastructure rather than rapid integration. 

Institutional adoption is a key focus, as it represents net new capital inflows into this new financial system. We are in the early innings as players like PayPal (launching their USD backed stablecoin), Blackrock (their BUIDL tokenized fund surpassing $500 million) and Stripe ($1.1 billion acquisition of stablecoin startup Bridge) begin to enter the foray. 

While DeFi’s growth thus far is impressive, there are still areas ripe for innovation. In the sections below, we highlight our investment thesis and some DeFi sub sectors that we are keeping an eye on. 

Payments and stablecoins are poised to become the primary entry point for users new to crypto, given their familiarity and ease of use. As stablecoin adoption accelerates exponentially, the distinction between fiat-backed stablecoins like USDC/USDT and traditional fiat money may seem minimal to casual users. However, yield-bearing stablecoins represent a disruptive leap, offering the ability to generate returns—a feature that traditional fiat systems struggle to replicate. 

We have a huge interest in protocols who are preparing for a stablecoin-dominated economy which involves addressing key challenges like streamlining stablecoin issuance, improving on/off-ramp accessibility, and managing fragmented liquidity across a growing number of stablecoins. 

With payments and stablecoins closely intertwined, major institutions like PayPal are already working to own the entire user stack, maximizing value capture and positioning themselves to lead in this evolving financial landscape.

Crypto payments can be broadly categorized into two sub-categories - local payments and cross-border payments. Local payments involve transactions within a single country or region, where crypto rails offer advantages like near-instant settlement, reduced fees, and 24/7 availability compared to traditional payment systems. This sub-category often finds application in point-of-sale transactions, e-commerce, and peer-to-peer transfers. On the other hand, cross-border payments deal with international transactions. Crypto rails add value by reducing costs, improving speed, and enhancing transparency compared to traditional methods like SWIFT or remittance services, making them particularly useful for global commerce and remittances. 

The current state of local payment systems is highly efficient within national borders, thanks to the rise of real-time payment systems (RTPs). These systems enable immediate settlements, operating 24/7 with low transaction costs, making frequent and reliable money transfers accessible to both individuals and businesses. Countries like Brazil, Europe, and the U.S. have developed advanced RTP networks. For example, PIX in Brazil supports instantaneous transfers across all sectors, Instant SEPA in Europe allows near-instant euro transactions, and the RTP Network in the U.S. facilitates fast payments with enhanced messaging for better reconciliation. These domestic systems are not only fast but also interoperable, integrating seamlessly with banks, digital wallets, fintech apps, and point-of-sale systems, which drives high adoption rates. 

With that in mind, we are interested in local payment protocols that possess a deep understanding of traditional payment systems and can effectively incentivize both merchants and consumers to adopt stablecoin transactions through means such as cashbacks and loyalty programs.

As alluded to in our previous article on Solana Payments, we believe that there is a bigger opportunity in cross-border payments. Local payment systems face limitations in global connectivity, lacking a unified framework to handle cross-border transactions. Diverse technical standards, compliance protocols, and settlement methods make international integration difficult. Furthermore, they do not have built-in mechanisms for foreign currency conversions or international compliance. By removing intermediaries, crypto cross-border payments become faster and cheaper, operating 24/7. It also enhances compliance through built-in, automated verification processes like KYC and AML, ensuring regulatory clarity. With standardized, tamper-proof data, blockchains allow easier auditing and adherence to international regulations, making it especially beneficial for fintechs operating globally or in regions with limited banking infrastructure. 

Additionally, we are closely observing cross-border protocols with expertise in emerging markets, where access to efficient global payment solutions remains limited. These regions present an urgent need for more reliable, compliant, and cost-effective cross-border transactions, making them a critical area for impactful innovation.

Our view is that the current trading patterns will persist for the foreseeable future, with large-cap "fat head" token trading volumes to be captured by order books or off-chain sources, such as solvers on intent-based exchanges, while AMMs will remain the primary venue for trading the long tail of small-cap tokens. 

We are particularly interested in next-generation AMMs that focus on supporting long-tail assets like memecoins in a more capital-efficient and less value-extractive manner. 

For AMMs, the main problem to solve is still loss versus rebalancing (LVR), which refers to the inevitable difference between holding assets in an AMM and holding them in a traditional, balanced portfolio. A key driver of LVR in AMMs is the role of arbitrageurs, who exploit stale prices within the pools to extract value. AMMs rely on automated formulas to determine asset prices, but these prices can lag behind off-chain sources like CEXes. When this happens, arbitrageurs can buy assets at lower prices or sell them at higher prices within the AMM, profiting from the difference. 

There have been several interesting attempts to solve LVR. For instance, am-AMM or "Auction-Managed Automated Market Maker" introduces a censorship-resistant auction mechanism, allowing a pool manager to dynamically set trading fees and capture arbitrage, resulting in higher liquidity compared to fixed-fee AMM. Uniswap v4 introduces "hooks," a feature that allows developers to insert custom logic at specific points in a pool's lifecycle, such as before or after swaps, liquidity additions, or removals. Developers can design hooks to execute rebalancing strategies that align the pool's asset ratios more closely with current market conditions. Another solution is deployed by ALM (active liquidity management) protocols like Arrakis and Kamino Finance. Active liquidity management on AMMs involves LPs dynamically adjusting their positions within specific price ranges to enhance capital efficiency, maximize returns, and reduce risks like impermanent loss. This approach often uses external signals, rebalancing strategies, and trading bots to optimize liquidity provision in real-time, making it more suitable for advanced users. 

Despite their potential, ALM protocols manage only around $400 million in aggregate liquidity as of October 2024, indicating that these mechanisms are primarily used by advanced users and specialized protocols. Broader acceptance may be slow due to their complexity and associated risks. Approaches like am-AMM and Uniswap v4’s hooks introduce significant complexity, making it harder for average users to participate. Features like dynamic fee settings, custom hooks, and rebalancing mechanisms often require technical knowledge, limiting adoption to sophisticated participants.

RWAs on crypto rails offer a compelling solution to reduce costs and enhance transparency in financial transactions. By leveraging crypto’s 24/7/365 operational capacity, RWAs enable instant capital deployment and continuous liquidity, unlike traditional finance, which operates within rigid hours, often resulting in missed opportunities. The blockchain's decentralized infrastructure removes intermediaries, significantly cutting transaction and settlement costs while providing a transparent, tamper-proof ledger for all parties involved. This aligns with the success of stablecoins, the first RWA to achieve product-market fit, whose transaction volumes more than doubled Visa’s $3.9 trillion over the second quarter of 2024. Stablecoin usage now rivals giants like Visa, PayPal, ACH, and Fedwire, representing an inflection point that signals broader adoption of other RWAs. As transparency, efficiency, and cost reductions continue to drive adoption, RWAs on blockchain rails could redefine how financial markets operate and scale.

One of the biggest challenges for RWA projects is achieving liquidity. While tokenization aims to transform historically illiquid assets—like private credit, treasuries, securitized gold, watches, wine, and real estate—into more accessible, tradable assets, simply tokenizing them doesn’t guarantee high liquidity. For tokenized RWAs to be truly valuable, there must be substantial demand and trading volume. Without sufficient market interest, tokenized assets may struggle with price discovery, wide bid-ask spreads, and limited exit options for investors. Therefore, building deep liquidity is essential, whether through incentives like yield farming, integration with liquidity providers, or creating secondary markets that attract consistent buyers and sellers. 

Projects that successfully cultivate robust demand and active trading environments will unlock the core value proposition of RWAs, bridging the gap between traditional assets and crypto’s continuous, liquid markets.

The DeFi space is poised for a transformation, where the apps that own end-user relationships will emerge as dominant players, akin to how social media platforms and mobile apps currently operate. While there are high-functioning protocols across various DeFi verticals—like money markets, spot and derivatives trading, payments, and memecoin trading—the user experience remains fragmented and suboptimal. Apps like Jupiter are paving the way by integrating multiple product suites, striving to deliver a seamless, all-in-one experience. 

The next step will be the rise of a DeFi superapp capable of unifying all these services, offering users a comprehensive platform where they can access a wide array of DeFi products without switching between protocols. 

By consolidating user relationships and offering an intuitive, mobile-first interface, this superapp can drive mass adoption and set the standard for the future of decentralized finance.

The recent emergence of GOAT incited more excitement and interest into the intersection between AI and DeFi. GOAT started as an AI-driven meme coin that quickly gained popularity through social media interactions, mainly propelled by LLM-trained Truth Terminal engaging with users and promoting memes. Despite the initial speculation, it's important to clarify that GOAT is not fully AI-enabled. The token was launched independently on Pump.fun, not by Truth Terminal. As a result, Truth Terminal has no direct control over any wallets that would facilitate token trading. Utimately, we feel that Truth Terminal is merely a glimpse into the transformative potential of the intersection between AI and DeFi. 

From a broader perspective, the future vision for AI and DeFi involves creating a fully automated, intelligent financial ecosystem that is personalized, efficient, and seamless. 

AI could potentially handle every aspect of DeFi interactions, from asset creation, liquidity management and portfolio rebalancing to yield optimization and risk mitigation, without requiring constant user input. 

One particularly interesting area of focus could be on autonomous trading agents where they could execute trades based on real-time data analysis. DeFi, traditionally driven by deterministic smart contracts, could be significantly transformed with AI-powered agents that bring adaptability and intelligence. Imagine agents trained on proprietary financial data not publicly available, offering nuanced insights into market behaviour, yield optimization, or risk management. These models could unlock new functionalities, like dynamically managing liquidity based on real-time sentiment, predicting memecoin trends before they surge, or automating cross-chain arbitrage across fragmented markets. This would allow users to deploy AI agents as "personal bankers or portfolio managers" that manage diverse investment strategies based on individual preferences, ultimately creating a bespoke financial environment. Taking a step further, another interesting area of research could be agents that can autonomously create new tokens, leading to the development of entirely new digital assets designed for speculation, staking, or other DeFi functions. 

By leveraging verifiable decision-making processes and self-custodial mechanisms, AI can improve transparency and security in DeFi interactions. This fusion can also democratize financial access, making DeFi more user-friendly and inclusive by abstracting complex operations into intuitive, automated solutions. As AI continues to evolve, it can help expand DeFi’s asset scope, improve market dynamics, and create highly personalized financial ecosystems, marking a significant step toward a fully automated, intelligent financial infrastructure. There are so many more exciting concepts to explore in the convergence of AI and crypto which certainly warrants a separate article.

In conclusion, the DeFi landscape is undoubtedly evolving rapidly, driven by continuous innovation across various sectors, from stablecoins and payments to RWAs, next-gen AMMs, and the emerging fusion of AI with DeFi. As DeFi matures, it is positioning itself as a parallel financial system that offers more efficient, transparent, and accessible financial services. We plan to invest in protocols that prioritize strong fundamentals, sustainable revenue models, and clear value propositions, aligning with the expanding DeFi market size. 

Adrena is also poised to capture market share from and capitalize on the popularity of GMX-style perpetual trading within the Solana ecosystem. This is evident as Jupiter Perps currently holds the highest volume for Solana perpetual volume, and Flashtrade has also gained significant traction shortly after its launch. Adrena distinguishes itself by being the only perpetual protocol on Solana that returns 100% of its revenue back to the community. ADX is also one of the few tokens within the Solana ecosystem that has actual value accrual to it. This unique value proposition is likely to attract more users and liquidity providers looking for maximum returns on their participation.

The success of GMX on Arbitrum has catalyzed the development of an ecosystem of DeFi protocols, such as Pendle and JonesDAO. These protocols, built on top of GMX, demonstrate the potential for a similar ecosystem to emerge on Solana. For instance, Adrena could enable lending protocols that utilize ALP as collateral for stablecoin issuance. Platforms like Kamino and Mrgn are well-positioned to facilitate this, allowing for significant growth in Adrena’s liquidity pools by providing users with the ability to loop their positions. In the long term, a product akin to abracadabra.money could be developed to leverage ALP and other yield-bearing tokens. Additionally, there is potential for a Pendle-like product that separates yield from ALP and ADX. 

We are thrilled to be able to back the Adrena team which is led by a group of well-respected anonymous Solana native builders who were core contributors to the Solana Perpetuals program - an open-source implementation of a non-custodial decentralized exchange that supports leveraged trading in a variety of assets which has since been used by Jupiter and Flashtrade. Additionally, Adrena is also supported by more than 100+ diverse community contributors in Solana like Joe McCann from Asymmetric, llmoi & Richard from Tensor, Sol Big Brain, r89, Santiago Santos, 3nes and more.

If you are interested to participate as a trader or liquidity provider, please check out https://www.adrena.xyz/ 

Over the past year, Solana’s underlying usage metrics have been encouraging to say the least. In July 2024, Solana’s monthly DEX trading volume surpassed Ethereum for the first time. It is important to recognize that this uptick in volume is evidently propelled by memecoin trading.  The question of whether memecoin trading will be a passing narrative is secondary to the larger takeaway: Solana is the best chain for permissionlessly issuing digital assets and facilitating trading. The narrowing gap between Ethereum and Solana’s total economic value also highlights that optimizing for high volume through low transaction cost on Solana is a viable business model, positioning the network as an ideal platform for a wide range of trading activities, regardless of the specific assets being traded.

While the underlying statistics are encouraging, Solana is still a work in progress. In the next section, we want to identify high-potential sectors on Solana that we are paying close attention to. 

We are still far away from any meaningful adoption of crypto payments when compared to traditional rails. Right from the beginning, Solana has always been earmarked as an ideal platform for payment systems due to its ability to handle a very high number of transactions, ensuring swift and efficient processing. This high throughput makes it suitable for numerous payment use cases. Additionally, Solana’s transaction fees are significantly lower compared to Ethereum, making it economically feasible for everyday transactions, micropayments, and other payment-related activities where high fees would be prohibitive. The platform's capability to achieve rapid transaction finality within a few seconds enhances trust by reducing the risk of transaction reversals. 

Global payments infrastructure providers such as Stripe and PayPal have recognized the appeal of Solana as a payment network by announcing their deployments. Within the payments sector, traditional P2P payments applications such as Cashapp, Zelle and Venmo have been so cost-effective and convenient for users that there is little to no reason for them to switch to crypto payments. Unless there is a wider mainstream adoption of stablecoins, we find it hard to see any meaningful market penetration in the near term. From a longer term perspective, we remain confident that crypto payments will inevitably replace the inefficient traditional financial rails. For instance, PayPal’s strategic move into pyUSD is an indication of that. When transactions on PayPal are completed through pyUSD, it reduces their reliance on traditional financial rails which is both costly and time consuming. Firstly, transaction cost and settlement on Solana is much cheaper and faster than routing through various financial institutions. Secondly, the yield from short-term U.S. treasuries and similar cash equivalents backing pyUSD is a huge additional source of revenue for PayPal. 

On the other hand, we do see potential disruptions in the traditional cross-border payments sector in the near term. Current banking systems are opaque, slow and expensive. Transactions often move through multiple banks, each adding delays and fees without clear tracking of where the money is at any given time. Many outlier regions struggle to access global financial services due to restrictive banking infrastructure, lack of liquidity, and high barriers to entry. For instance, Sphere Labs is leveraging Solana to target businesses that need to manage large-scale cross-border transactions or want to incorporate crypto payments into their operations.

In comparison to Ethereum and Tron, the aggregate market cap of stablecoins on Solana is still considerably lagging behind. Recognizing Solana as a premier venue for trading assets, particularly stablecoins, we anticipate a significant increase in both stablecoin market capitalization and trading volume in the near future. We also foresee a rise in the issuance of more stablecoins, particularly those that are yield-bearing. Already, platforms like Mountain Protocol, Ondo, PayPal, and Ethena have launched their respective stablecoins on Solana. Beyond these new issuers of innovative stablecoins, we're closely monitoring infrastructure projects that aim to capitalize on the growing stablecoin market. One such project is Perena, a stablecoin infrastructure protocol on Solana designed to address key challenges faced by stablecoin issuers, including liquidity fragmentation and regulatory compliance. By consolidating various stablecoins into a single fungible, liquid token, such as qUSD, Perena enhances both capital efficiency and liquidity within the stablecoin ecosystem.

Defi superapps and aggregators

DeFi protocols like Jupiter and Drift are broadening their product offerings with the ambition of becoming all-in-one "onchain Binance" DeFi superapps. Jupiter, which initially started as a DEX aggregator, has expanded into perpetual trading and has also acquired a wallet to integrate within its ecosystem. Drift, which began as a platform focused on perpetual futures trading, has since diversified into lending/borrowing, spot markets, and even prediction markets. These expansions reflect a strategic move to provide a comprehensive suite of financial services under one platform, aiming to attract and retain a broader user base by offering more functionalities in a single location. As more DeFi protocols seek to mimic this approach, the competition to be the leading DeFi superapp intensifies.

Aggregators have found a natural alignment on Solana, where the high throughput and low latency create an optimal environment for these protocols to thrive. This infrastructure allows aggregation platforms to deliver near-instantaneous, cost-effective transactions, a crucial advantage for ensuring speed and efficiency in finding the best prices across various venues. The composability of Solana’s programs further enhances this synergy, enabling platforms like Jupiter to seamlessly integrate with other protocols. This integration empowers developers to craft more complex and user-friendly DeFi applications, leveraging Jupiter’s robust aggregation capabilities. As Solana's DeFi ecosystem continues to expand, the demand for efficient, reliable, and integrated aggregation services is set to grow, as evidenced by Lulo's success in aggregating lending and borrowing yields, and the anticipated impact of Ranger, which will aggregate perpetual trading across multiple venues.

Perps

Despite the rapid growth, Solana DeFi is still in its early stages, with significant room for improvement. Jupiter and Drift are currently leading in perpetual trading volume, with Jupiter focusing on major assets like ETH, BTC, and SOL, while Drift also caters to broader longer tail assets. However, challenges such as liquidity issues, large spreads on longer-tail assets, and high borrowing costs persist. These gaps present opportunities for new entrants to innovate and address these shortcomings, potentially attracting more users to Solana. For example, the popularity of GMX-style perpetual trading platforms like Jupiter and Flash Trade suggests that similar models could thrive on Solana. Upcoming platforms like Adrena, which plan to implement a full GMX-style 100% revenue share model, demonstrate the potential for innovative solutions to disrupt the market. The success of GMX on Arbitrum has catalyzed the development of an ecosystem of DeFi protocols, such as Pendle, Jones DAO, and Rage Trade. These protocols, built on top of GMX, demonstrate the potential for a similar ecosystem to emerge on Solana. Yield trading has also yet to fully take off on Solana - we expect that to change with the increasing popularity of yield tokens such as  JLP, FLP, liquid staked tokens like jupSOL, jitoSOL and also the upcoming liquid restaking tokens enabled by Jito restaking & Solayer. 

Orderbooks

On-chain orderbooks, such as Phoenix, will play a pivotal role in on-chain price discovery. Unlike AMMs, where price discovery falters as soon as multiple pools are involved, orderbooks offer superior capital efficiency and support more sophisticated trading strategies. The inherent complexities of providing liquidity and mitigating impermanent loss on AMMs make them less accessible, and their general lack of support for advanced order types further limits their effectiveness. However, it’s important to acknowledge that Phoenix still trails behind AMMs like Raydium and Orca in terms of volume on Solana’s most liquid trading pair, SOL/USDC. We are keenly anticipating advancements in orderbooks that will make it more appealing for both traders and market makers. One example is Phoenix’s plans to implement customizable order hooks. These tools could empower market makers with the ability to implement more advanced pre- and post-trade conditions, enabling dynamic price adjustments, automated cancellation rules, and conditional order placements that respond to market volatility, all of which could significantly enhance the efficacy and appeal of on-chain orderbooks.

LST

The liquid staking ratio on Solana currently stands at a modest 6%, indicating substantial growth potential in this area. The recent surge in liquid staking has been significantly driven by Sanctum, a crucial infrastructure player that supports the expansion of longer-tail Liquid Staking Tokens (LSTs), with jupSOL being a prime example. Several growth levers are poised to accelerate this trend. First, institutional support is paramount, especially as more institutions and liquid funds hold SOL. Building partnerships with custodians, educating stakeholders on the unique aspects of liquid restaking on Solana compared to Ethereum, and enhancing the integration of LSTs with DeFi protocols are critical steps in this evolution.

Sanctum is also pioneering new use cases for LSTs that are unparalleled in other ecosystems. One such innovation is their collaboration with BasedApp to launch the first-ever Liquid Staking Token-powered debit card. This groundbreaking card will allow users to spend their staking rewards directly, converting yields from cardSOL into USDC, effectively eliminating the need for traditional off-ramping processes. Another intriguing development is the use of LSTs as a superior tool for capital formation. The Sanctum team is partnering with the Pathfinders NFT project to introduce the first "unruggable" mint, powered by their pathSOL LST. In this model, the SOL used for minting the NFT is locked within the NFT itself, allowing holders to burn the NFT at any time to reclaim their original mint cost. This ensures that the project remains incentivized to maintain the SOL within the NFT, guaranteeing a steady stream of staking rewards while minimizing risk for the holders. This concept has the potential to extend beyond NFTs, offering innovative solutions for creators and even early-stage protocol fundraising. In the near term, strategies like those employed by jupSOL, which combine competitive yields with the prestige of the issuing protocol, are likely to gain the most traction. The space is ripe for further disruption, and we anticipate seeing even more groundbreaking developments in the near future.

L2s and Appchains

Solana has faced congestion issues, and while this presents a challenge, it also opens the door for innovative, Solana-native solutions to address scalability. Recently, there have been teams developing L2 solutions that settle onto Solana, but we believe that adopting a general-purpose L2 approach similar to Ethereum's rollup-centric roadmap—exemplified by projects like Arbitrum, Optimism, Base, and Blast—is not the right path for Solana. The core strength of Solana lies in its composability, where applications and assets can seamlessly interact on the base layer. Sacrificing this composability for scalability is not an ideal tradeoff 

A promising concept that works around that trade off is Magic Block's idea of ephemeral rollups. These rollups allow applications to scale specific operations without losing the composability of the base layer. By leveraging the SVM account structure and parallelization capabilities, developers can temporarily lock one or more accounts and transfer the state to an ephemeral rollup. The sequencer can then modify these accounts in the rollup, while other undelegated accounts remain free to interact with programs on the base layer.

The benefits of using an ephemeral rollup are significant: it preserves base layer composability, allowing programs to continue interacting with existing protocols and assets. Developers can also utilize all existing Solana infrastructure, such as the Anchor Framework, RPCs, and libraries. Additionally, the specialized runtime in ephemeral rollups can introduce gasless transactions, quicker block times, and smart contract automation without fees, all while enabling horizontal scaling on demand. Once the dedicated runtime environment is no longer needed, it can be collapsed, with state transitions settled back onto the base layer, ensuring scalability without compromising the network’s composability. For example, orderbook protocols can deploy ephemeral rollups for batch order matching. Liquidity providers and market makers can deposit Sol and Usdc into the program (which is on solana base layer) for Sol/Usdc markets, they can spin up an ephemeral rollup where the program state will be replicated onto the rollup just for order matching. The transfer of Sol and Usdc will only take place on the base layer once transactions are batched back from the ephemeral rollup. 

Restaking 

Restaking on Solana is poised to take a distinctly different form compared to Ethereum, largely due to Solana's low transaction costs and high-speed infrastructure. These characteristics enable a higher volume of on-chain activity, allowing Node Consensus Networks (Jito’s definition of AVS) to function fully on-chain. This contrasts sharply with Ethereum, where higher costs and slower transaction speeds often push restaking activities to scaling the base layer and securing additional layers. On Jito, restaking can be harnessed to decentralize specific operational stacks within existing applications, such as or oracle publisher accuracy and keeper networks. Take for example, keeper networks are vital for automating tasks like liquidations, arbitrage, and other time-sensitive on-chain activities that are crucial for maintaining the stability and efficiency of DeFi protocols.

By leveraging Solana's restaking mechanisms, the security and reliability of these keeper networks can be significantly enhanced. Restakers can contribute additional layers of security by staking their assets to support the operations of the keeper network, ensuring that the network remains decentralized and resilient against manipulation or failure. Furthermore, Solana's restaking model allows for the implementation of slashing mechanisms to penalize incorrect or malicious behavior by keepers, ensuring that only those who perform their tasks accurately and promptly are rewarded. This not only improves the reliability and efficiency of the network but also incentivizes high performance within these crucial operational stacks. Additionally, Jito’s implementation of multi-collateral staking also provides additional utility to protocol tokens that are traditionally seen as governance-only tokens. Instead of tokens being limited to governance functions, restaking allows these tokens to be used to secure certain decentralized operational stacks mentioned above, thereby giving them a broader role within the network. We are particularly excited about the potential developments in Solana native NCNs, as they could redefine how decentralized applications and infrastructure operates on the network

Memecoins + social

Memecoins continue to hold significant potential, largely due to their simplicity and appeal, making them incredibly retail-friendly and easy to understand and speculate on. While memecoins are often dismissed as mere speculative assets with zero utility, there is value in their ability to foster social connections, much like how NFTs have brought communities together. This social aspect of memecoins remains underexplored, but it presents exciting opportunities for innovation especially on Solana. For instance, memecoins could be used for token-gated social features, allowing communities to interact in exclusive ways. Additionally, these tokens could enable subscriptions to exclusive content, merging service payment with the thrill of speculative earning. Furthermore, integrating memecoins into prediction markets could introduce a new dynamic, where users not only speculate on the value of the coin but also on outcomes in various domains. These possibilities demonstrate that memecoins have the potential to evolve beyond mere speculation, offering unique and engaging use cases that can deepen their cultural and economic significance.

Token Distribution

Unique token distribution models are particularly important because it’s a means of attracting fresh capital but also brings new participants into the ecosystem. By offering novel ways to earn and distribute tokens, such mechanisms can significantly incentivize user engagement and developer participation. For instance, in the current cycle, methods like points-based rewards, and tap-to-earn models, such as NOTcoin, have gained considerable popularity. These approaches make it easier for users to get involved and start earning, fostering a broader user base. A notable example on Solana is Ore, which allows individuals to participate in a proof-of-work system using laptops or phones, providing a straightforward way to acquire tokens through computational power. Mining pools that congregate computational power from groups of users have also emerged on top of the Ore ecosystem in a bid to lower transaction cost and improve unit economics. By lowering the barriers to entry and offering diverse ways to earn tokens, these distribution methods not only drive market cycles but also help democratize access to the crypto economy, paving the way for broader adoption and innovation.

Solana is far from perfect, facing its share of challenges discussed above, but the rapidly growing ecosystem and the recent memecoin mania are creating a powerful network effect that is difficult to replicate, even for other high-performance monolithic L1s. The vibrancy of Solana's community, combined with its unique strengths is attracting a diverse range of developers, projects, and users, all contributing to a self-reinforcing cycle of growth. This burgeoning ecosystem is not just riding the wave of existing narratives but is also pioneering new ones in a distinctly Solana-native fashion. As these narratives unfold, we are excited to see how Solana continues to evolve and carve out its unique space in the crypto landscape. If you're a founder building on Solana, we'd love to hear from you and explore how we can contribute to this dynamic ecosystem together.