Jack Kubinec 

Mert Mumtaz

Jeffrey Albus

The essential source for all things Solana — exclusive news, deep analysis, and the latest trends.

Lightspeed

Gm! This week we're joined by Austin Federa to discuss the latest happening with Solana &amp; DoubleZero. We deep dive into the importance of speed for capital markets, the rise of alt L1s, how to remain competitive as a blockchain &amp; more. Enjoy!
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Zenrock is a permissionless, decentralized custody network backed by 1RoundTable Partners, 10T, Maven11, and Spartan. Live on Jupiter, $ROCK is the native token for transactions within the Zenrock ecosystem and secures Zenrock’s decentralized custody network.

The first application launching on Zenrock is zenBTC – yield-bearing Bitcoin on Solana. zenBTC will be live in April 2025. Visit zenbtc.io to learn about earning yield with Bitcoin on Solana.
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(00:00) Introduction
(01:23) An Update On DoubleZero
(09:00) Zenrock Ad
(19:25) The Rise Of Alt L1s
(24:51) Firedancer
(27:10) Zenrock Ad
(27:54) How To Remain Competitive?
(31:50) Hyperliquid
(33:56) Does Decentralization Actually Matter?
(37:48) Tokenization
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Disclaimers: Lightspeed was kickstarted by a grant from the Solana Foundation.

Nothing said on Lightspeed is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only, and any views expressed by anyone on the show are solely our opinions, not financial advice. Mert, Jack, and our guests may hold positions in the companies, funds, or projects discussed.

The Future Of Solana, DoubleZero & The Firedancer Impact | Austin Federa

(00:00) Introduction 
(01:23) An Update On DoubleZero 
(09:00) Zenrock Ad 
(19:25) The Rise Of Alt L1s 
(24:51) Firedancer 
(27:10) Zenrock Ad 
(27:54) How To Remain Competitive? 
(31:50) Hyperliquid 
(33:56) Does Decentralization Actually Matter? 
(37:48) Tokenization

LS-04-29

Jack Kubinec

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Over the past few months, people involved in Solana DeFi have been asking questions about SolFi, a DEX that sprang up in November and almost immediately captured over 20% market share on swaps between stablecoins and SOL.



SolFi was able to quote better prices than competitors, but at least one business partner I spoke to didn’t know who was behind the new exchange before today. In general, few seemed to be in the loop as to how SolFi was achieving such good prices.



Today, Ellipsis Labs — a DeFi shop currently building an Ethereum layer-2 that uses Solana’s software called Atlas — publicly claimed credit for developing SolFi.&nbsp;



In an announcement on X, Ellipsis Labs co-founder Eugene Chen said the DEX “came from our deep understanding of the market structure on Solana.” Prior to building Atlas, Ellipsis created an orderbook Solana DEX called Phoenix.&nbsp;



SolFi has no frontend, but Chen added that the DEX had partnered with Jupiter Exchange to bring the product to retail traders. SolFi is one of 51 DEXs that are part of Jupiter’s swap aggregator, but it currently makes up for 25% of Jupiter volume — far more than any other DEX — according to a Dune <a href="https://dune.com/ilemi/jupiter-aggregator-solana">dashboard</a>.&nbsp;



The Solana rumor mill tended to reason that SolFi’s creators had to be someone with roots in the network, and Ellipsis certainly seems to have the technical chops to fit the bill.



“The Ellipsis Labs team are some of the most talented SVM developers in the ecosystem. It should be no surprise, given what they’ve built with Phoenix and Atlas, that they’ve also been able to find success with SolFi,” Switchboard co-founder Chris Hermida said.



SolFi isn’t the only anonymous Solana DEX. Orbic and ZeroFi are other newer Solana DEXs that have commanded significant trading volumes without publicly disclosing who their developers are.



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

DEXs

Ellipsis Labs claims credit for mysterious top Solana DEX

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed" target="_blank" rel="noreferrer noopener">subscribe</a>.



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One of the best parts of traveling is getting to meet new people, unless you’re traveling to a crypto conference.&nbsp;



Solana Crossroads kicked off today in Istanbul, so a number of Solana builders decamped from New York and San Francisco to sip stale coffee halfway around the world while talking with the same people they see at Solana events in New York and San Francisco. Many attendees stopped by the Step Finance-sponsored community conference on their way to Dubai for TOKEN2049 next week before shipping off to New York City for Solana Accelerate in May.



Crypto itself may still be struggling to find product-market fit, but crypto conferences seem to have inelastic demand.&nbsp;



After a <a href="https://blockworks.co/news/how-solana-became-the-peoples-chain">year of explosive growth</a> for Solana, Crossroads attendees didn’t seem too concerned with other ecosystems. Some complained that the yearly Ethereum conference ETHDenver <a href="https://x.com/PrimordialAA/status/1895894318927528350">talked too much</a> about Solana and other ecosystems. At Crossroads, it almost felt like those other smart contract ecosystems didn’t exist.&nbsp;



Solana teams hawked their wares on the conference’s expo floor. I held a prototype of the Solana Seeker phone. It wasn’t production-ready, so all I could really do was look at a promotional display on the screen, but I can now vouch for the fact that its casing exists, at least.&nbsp;



The internet filtering startup DoubleZero had some conference buzz. One Solana founder said market makers offered up their connection with the network as a way to pitch their services.&nbsp;



I caught DoubleZero co-founder Austin Federa near the media room and asked him some vague question about the state of high-throughput blockchains.



“Imagine if the sun disappeared,” he began before explaining the importance of being able to broadcast data.



While Crossroads is filled with many of the usual suspects, a number of locals showed up as well.&nbsp;



“I’ve been impressed with frankly just the number of local Turkish people who’ve shown up,” Framework Ventures partner Brandon Potts said. “A lot of the conversations with locals I’ve had are just practical ones around stablecoins and like, ‘Hey … which one should I hold?’”



I chatted with a Turkish Solana developer who filled me in on the history of the land. He told me that coins were invented in Lydia, an ancient kingdom located in modern day Turkey. His father collects coins, he added.



“You collect coins, too. Shitcoins,” his friend shot back.



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
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Lightspeed Newsletter

Now dominant in crypto, Solana community gathers in Istanbul

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed" target="_blank" rel="noreferrer noopener">subscribe</a>.



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The Solana Foundation is tightening its leash on the validators receiving its stake.&nbsp;



The Solana Foundation now says that for every new validator added to the Solana Foundation Delegation Program, it will remove three long-standing ones with under 1,000 SOL in external stake. The goal: have fewer validators relying on foundation stake and more earning authentic backing from the community.



Blockworks Research data lead Dan Smith estimated that at current staking levels, around 150 Solana validators would lose their foundation stake under the new rule.&nbsp;



The Solana Foundation has a sizable stash of SOL tokens, and it stakes some of those tokens with smaller validators. Those validators who go through KYC checks and enlist in the program also have some of their voting costs covered for a year. The program has booted participants before: In June 2024, it <a href="https://blockworks.co/news/lightspeed-newsletter-sandwich-attacks">cut a group</a> of validators found to have been operating private mempools, which can be used for sandwich attacks.&nbsp;



This all may sound like inside baseball, but the delegation program is pretty central to Solana’s validator landscape. Last year, a <a href="https://www.helius.dev/blog/solana-foundation-delegation-program-sfdp#solana-foundation-delegation-program-sfdp">report</a> from Solana infrastructure shop Helius found 72% of validators receive foundation stake.&nbsp;



Solana validators earn revenue partly through inflation, priority fees, and MEV, which all scale as validators attract more delegated stake. In other words, finding lots of stake is the whole ballgame for validators. By booting validators from the delegation program, the Solana Foundation is forcing validators to either find new sources of stake or potentially go out of business.



The SFDP is a good program for bootstrapping a bigger validator set, but the Solana Foundation keeping some validators afloat obviously can’t last forever. It’s probably healthy for Solana to discourage freeloading.



Still, count this as one of a continuing string of <a href="https://blockworks.co/news/lightspeed-newsletter-small-solana-validators-struggle">woes for smaller Solana validators</a>. First a drawdown in market activity, now this, then maybe a cut to Solana’s emissions rate down the road.



Jeffrey Albus contributed reporting.



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Solana Foundation begins pruning validators from delegation program

Jeff Albus

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Solana is up. At $151.30, SOL is <a href="https://app.blockworksresearch.com/assets/sol?tags=sol&amp;interval=1m">back at monthly highs</a>, reversing an oh-so-steep early April dip. It&#8217;s pretty well outperforming broader crypto markets, which aren&#8217;t doing too badly themselves as they ride a wave of short squeezes, ETF inflows, and a sudden softening of trade war rhetoric.&nbsp;



Some ecosystem tokens caught the bullish wave, too, including Jupiter’s JUP, which is up 25% on the week.



Yesterday, <a href="https://app.blockworksresearch.com/research/jupiter-scale-synergies-and-scrutiny">a report from Blockworks Research</a> laid out all the ways in which Jupiter is becoming irreplaceable. Jupiter now commands 95% of DEX aggregator volume and 80% of perpetuals trading on Solana. It generates north of $280 million in annualized revenue and still trades at one of the lowest P/S ratios in DeFi.



Since launching in 2021 as a swap router, Jupiter has made no secret of its intent to become Solana&#8217;s super-app: home to perps, its own launchpad, a mobile wallet, a memecoin terminal, and more recently, NFT integrations via its DRiP Haus acquisition. Its liquidity index fund, JLP, is now the third-largest TVL pool on Solana — behind only Jito and Kamino. Its recent API upgrades (here&#8217;s looking at you, Ultra Mode) are quietly reshaping user behavior. I mean, come on. It&#8217;s pulling in $5–10 million in optional monthly fees.



Jupiter&#8217;s routing upgrades (Juno), cross-chain testnet (Jupnet) and rapid-fire acquisitions (SolanaFM, Coinhall, SonarWatch, Ultimate Wallet, Moonshot) signal a protocol building not just liquidity, but full-stack control. It&#8217;s a <a href="https://app.blockworksresearch.com/research/jupiter-scale-synergies-and-scrutiny">surgical level of vertical integration</a> rarely seen: data, analytics, interface and distribution, all consolidated under a single roof. Its treasury is buying back JUP at speed; so far, they&#8217;re over $20 million repurchased in under two months.



Risks worth watching mostly deal with looming token unlocks. The Jupiter team took heat recently-ish over its compensation and governance transparency. Plus, competition sharpens when winners emerge — Kamino, Titan and Drift aren&#8217;t going quietly. But Jupiter is digging a deep moat, and it&#8217;s doing this without relying on mercenary incentives. Ultra Mode usage is on the ascent. Aggregator dominance is stable. Perps volumes remain consistently above $25 billion per month.



While macro flows, ETF optimism, and geopolitical thawing may have sparked the week&#8217;s rally, Jupiter has helped things along by scaffolding Solana&#8217;s commercial core.



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Jupiter

Jupiter anchors growth as Solana surges to monthly highs

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There’s a refrain in crypto these days that while many in the industry expected crypto to become more like traditional finance over time, TradFi has actually just become more like crypto.



Zeitgeisty stocks can trade more like memecoins than based on any sort of price-to-earnings ratio. Robinhood offers sports betting. The president of the United States cryptically encouraged investors to buy on social media before a tariff slowdown sent public markets rocketing.



And here’s a new piece of crypto culture to add to the traditional financial world: community takeovers. The CTO happens when a crypto project’s leadership steps away or is no longer cutting it, and its public backers step in to revive its fortunes. Sam Bankman-Fried was once <a href="https://www.forbes.com/sites/tatianakoffman/2020/09/06/exclusive-sbf-speaks-out-on-defis-sushi-saga/">granted</a> control of the SushiSwap multisig, for instance, and a more recent example came when the X profile “BuzzlamicJihad” added hundreds of millions to Aptos’ market cap by repeatedly posting: “Aptos looking good here.”



The TradFi version of a CTO comes from investors buying up niche publicly-listed stocks and announcing a crypto treasury strategy — leading the price to pump. Janover Inc. (now DeFi Development Corporation) <a href="https://blockworks.co/news/janover-to-receive-kraken-staked-sol">did so recently</a> after buying a real estate company and issuing convertible bonds to raise capital and buy Solana.



Yesterday, crypto-native market maker and investor GSR announced it had led a private placement into Nasdaq-listed Upexi alongside a group of other crypto investors. The funds were meant to back a Solana-based treasury strategy. Like DeFi Dev Corp, Upexi is relatively new to crypto. It went from <a href="https://ir.upexi.com/news-events/press-releases/detail/85/upexis-tytan-tile-kits-disney-frozen-and-new-disney-jr">selling</a> Disney-branded products at BJ’s Wholesale Club to strategically <a href="https://ir.upexi.com/news-events/press-releases/detail/97/upexi-shifts-focus-into-bitcoin-and-crypto-with-strategic">investing</a> in crypto via holding companies over the past year. Both stock prices surged by hundreds of percent following their crypto treasury and investment announcements.&nbsp;



In crypto, it’s easier to CTO a microcap memecoin than a blue-chip token, and the stock market CTO’ers seem to have learned this. Upexi had a market capitalization of $3.65 million at the end of last year, and Janover’s was $6.87 million. Both could likely have been flirting with forced delisting from the Nasdaq due to poor financial performance. Instead, the crypto saviors stepped in and offered US investors a regulated wrapper in which to gain Solana exposure.



Many have expressed doubts about the longevity of Michael Saylor’s bitcoin-buying spree at Strategy, but for the time being, the stock is a success story. And while SOL ETFs await approval, Solana folks want in on the action.



“Michael Saylor and his team pioneered some extremely capital efficient accrual mechanisms — I&#8217;m excited to see GSR through Upexi attempt to bring this mechanism to assets other than bitcoin,” DoubleZero co-founder Austin Federa, who participated in the Upexi placement alongside GSR, said in a direct message.



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Small-cap stocks are adding Solana exposure

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed">subscribe</a>.



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Crypto cycles tend to have two big innovations: something real and something ridiculous that distracts retail, pumps the wrong narrative and eventually implodes the market.



We&#8217;ve had a ton of innovations this cycle, but none have really stuck because memecoins showed up early and stole the show. However, if recent <a href="https://app.blockworksresearch.com/research/helium-decentralizing-telecom-with-web3-incentives">momentum</a> from projects like Helium is anything to go by, the current run might get its more &#8220;serious&#8221; cycle innovation after all, thanks to decentralized physical infrastructure networks (DePIN).



DePIN uses crypto incentives and public coordination to bootstrap real-world infrastructure (like wireless coverage, sensor networks, GPU clusters, energy grids). Instead of billion-dollar telcos or centralized cloud platforms, the infrastructure gets built by communities and aligned with token rewards. In theory, it&#8217;s the internet&#8217;s final Frankenstein, turning crypto into a tool to build digital utility outward into meatspace.



In recent weeks, <a href="https://app.blockworksresearch.com/research/helium-decentralizing-telecom-with-web3-incentives">Helium has hit new all-time highs</a> in DAO voting participation, $MOBILE validator onboarding and usage-based rewards. It’s also <a href="https://world.helium.com/en/mobile">passed</a> major protocol milestones: expanding 5G coverage to over 4,500 radios across 2,000+ US cities and driving real-world traffic to Helium Mobile&#8217;s $20/month unlimited plan — now sold in 3,000 Walmart stores.



Take that in for a moment: These are actual phones using a crypto-backed, community-powered DePIN network.



Traditional telecom is bloated, centralized and hostile to innovation. Infrastructure costs are egregious, rural service is often non-existent, and MVNOs are locked into opaque backend deals. Helium is flipping this by letting users deploy coverage infrastructure, <a href="https://blockworks.co/news/helium-mobile-introduces-free-plan">earn rewards</a> based on network demand, and manage protocol upgrades through its onchain governance systems. It&#8217;s basically Uber-for-cell-towers (ew, I know. Such a cheugy analogy at this point), except instead of squeezing labor, it aligns long-term incentives through verifiable coverage proofs and onchain traffic accounting.



That said, it’s far from a done deal for Helium. The protocol’s parent company Nova Labs underwent a significant <a href="https://blockworks.co/news/helium-parent-company-layoffs">round of layoffs</a> last summer, and it now has competition from the <a href="https://blockworks.co/news/xnet-att-partnership-wifi-depin">likes of XNET</a>. It’s still unclear just how profitable Helium Mobile’s business is.



Initially launched for low-data IoT sensors (LoRaWAN), Helium&#8217;s pivot to 5G mobile was a big step toward legitimacy. Through a <a href="https://blockworks.co/news/helium-cell-plan-goes-nationwide">partnership with T-Mobile</a>, Helium Mobile now operates as a hybrid carrier, routing data across both centralized infrastructure and community-run equipment. Doing this has enabled fresh experiments in coverage-based rewards, user-side rebates and real-time tracking of infrastructure usage — all of which are settled on Solana.



Helium&#8217;s not alone. In recent months, projects like Hivemapper (decentralized Street View), WeatherXM (community weather data) and Grass (browser-based data capture for AI models) have each carved out early traction. The common thread here is real-world participation, mostly thanks to tokenized incentives. These are applications that COULD exist without crypto, but they scale better with it. People like monetary rewards, it turns out.



If any of these networks hit a tipping point where proper utility gains equilibrium with the joys of token yield, I think we might see it spark the first DePIN-native flywheel.



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



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DePIN

Solana’s biggest DePIN is setting records

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Colosseum is something like a <a href="https://blockworks.co/news/lightspeed-newsletter-solana-startup-accelerator">hackathon organizer</a> mixed with Y Combinator for Solana startups. I tend to view its hackathon entries as a proxy for what Solana builders are interested in, and I see its hackathon winners as a potential proxy for what Solana venture investors find valuable.



So this week <a href="https://www.youtube.com/watch?v=Un-KMR92ukM">on the Lightspeed podcast</a>, I asked Colosseum co-founder Matty Taylor what he’s excited about from the organization’s newest hackathon, and his answer surprised me.&nbsp;



“One of the things that we&#8217;re most excited about is sort of a return to crypto cypherpunk roots,” Taylor said. He cited privacy-preserving applications and new takes on DAOs as examples.&nbsp;



Taylor said he’s seeing “high performing [Solana] founders” showing a lot of interest in private trading technology, citing former Colosseum winner Darklake — which is building a zero-knowledge enabled DEX — as one example. He’s also seen builders facilitating private payments on existing stablecoins.&nbsp;



Solana developers do seem to be growing more interested in onchain privacy. The RPC provider Helius just unveiled confidential balances, a more private version of Solana’s existing token extensions. The testnet-phase encryption infrastructure network Arcium has also been buzzy of late.&nbsp;



Privacy is cypherpunk, but it’s also a necessity for some institutions to come onchain, as large capital allocators tend to like keeping their financial activities opaque.&nbsp;



Taylor also mentioned DAOs, the crypto-native governance structure that has so far proved tricky to execute. Colosseum was an early supporter of markets-based <a href="https://blockworks.co/news/metadao-solana-governance-platform">governance platform MetaDAO</a>, and Taylor talked about a futarchy-enabled token launchpad where funds are escrowed and subject to decision markets for how they should be spent.&nbsp;



That kind of service has been tried for things like NFT roadmaps in the past — so it’s unclear whether this attempt will catch on more broadly — but pretty much anything would be an improvement on the “one token, one vote” status quo.



“DAOs are really interesting again,” Taylor said.



Solana has been labeled a VC chain and has been criticized for centralization vis a vis <a href="https://jito.retool.com/embedded/public/3557dd68-f772-4f4f-8a7b-f479941dba02">95%</a> of the network’s stake currently running on the same validator client. It also — perhaps for the better — lacks some of the ideological bias toward more cypherpunk outcomes that its predecessor in Ethereum has.



So it would certainly be a noteworthy development if the pragmatic chain dominated by memecoin activity took a turn for the cypherpunk. It remains to be seen whether Colosseum and other investors will put their money where their mouth is.



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Solana founders ‘returning to cypherpunk roots’: Colosseum’s Taylor

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The Breakdown

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Solana is stalled sideways, with the broader crypto market hitting some light turbulence. SOL is trading at $145.45 midweek, down 2.5% from last Wednesday and now drifting crabwise after a month-long rally that pushed it up nearly 30% from April lows.&nbsp;



Despite the modest cooling of momentum, Solana <a href="https://app.blockworksresearch.com/assets/sol?tags=sol&amp;interval=1w">continues</a> to print usage at speed. Over the past 30 days, transaction fees have hit an annualized $432.9 million, with SOL burn running at an annualized $216.5 million pace.



Besides macro headwinds, we can probably trace some of the cautious price action to the looming FTX liquidation, where over 60% of the estate&#8217;s onchain assets are in SOL. The first wave of creditor repayments is scheduled for May 30 — funded by prior asset sales, including FTX’s March SOL deals — which may still weigh on sentiment even if the tokens themselves are no longer in play. SOL&#8217;s market cap has slipped to $75.3 billion, and while 24-hour volume remains strong at $3.49 billion, buyers can&#8217;t seem to stop peeking over their shoulders.



The last round of FTX estate unlocks <a href="https://blockworks.co/news/sol-investors-shrug-off-unlocks">kicked off March 1</a> — right before a drawdown in SOL’s price, although there were obviously <a href="https://blockworks.co/news/tariff-fears-wipe-out-sol-gains">other factors involved</a>.&nbsp;



Bitcoin, meanwhile, had a little gut punch this morning due to macro. On Wednesday, BTC <a href="https://blockworks.co/price/btc">dropped</a> to $92,910 after US GDP data showed a <a href="https://forward-guidance.beehiiv.com/p/greatly-disappointing-print">0.3% contraction in Q1</a> — its first in three years. Analysts were quick to cite the sudden impact of Trump&#8217;s revived tariff policy, with imports surging and dragging down the GDP print. Stocks sold off, recession chatter kicked up, and bitcoin dipped. As is tradition, the price rebounded within hours to $94,000, buoyed by strong spot demand and resilient ETF inflows, including over $3 billion in net new capital through April 29.&nbsp;



Last weekend&#8217;s <a href="https://blockworks.co/news/crypto-solana-community-istanbul-turkey-conference">Crossroads event in Istanbul</a> allowed the Solana community to take stock of direction. It was a lot of builders comparing notes, investors checking pulse, and variant teams workshopping infrastructure that still has a shot at scaling mainstream demand — lots of honest conversations about payments, gaming, DePIN and the gaps that still need filling.



So far, though, the resulting confidence of those discussions has not translated into price. For now, conviction is expensive. The market is still frozen by what-ifs. What if the market prices in the FTX overhang? What if bitcoin fails to clear $96K and drags everything else with it? What if global retaliation hits US tech exports, and risk assets feel the heat?&nbsp;



Once these questions have answers, folks will either step up or step aside. And that&#8217;s when the market&#8217;ll start moving again&#8230;ready or not.



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FTX repayments loom over Solana

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Throughout much of the memecoin-fueled boom in Solana application revenue, the leaderboard has looked like this: pump.fun, Phantom, and an established group of so-called trading bots.&nbsp;



That stasis broke in recent weeks as a new competitor quietly climbed the ranks. Axiom, an online trading platform combining trading bot capabilities with Hyperliquid’s perpetual futures product, is now solidly in second place behind pump.fun in terms of Solana app revenue.



Last week, pump.fun saw $12.2 million in revenue, while Axiom was close behind with around $10.5 million, according to Blockworks Research. Phantom, with around $4.3 million, was a semi-distant third.&nbsp;



Axiom was co-founded by a pair of 22-year-old UC San Diego graduates, Henry Zhang and Preston Ellis. The computer science majors “had nothing really to do” in college, but they were both into crypto trading, so they built a couple of projects in their free time, Zhang told me.&nbsp;



Ellis was finishing up college, and Zhang was just starting as a software engineer at TikTok when the <a href="https://blockworks.co/news/solana-memecoins-all-time-high">Solana memecoin craze</a> began taking off. The pair decided to try building a platform that could rival the trading bot of choice, Photon. They built an initial product in mid-2024 and were selected into the winter batch for Y Combinator, the prestigious startup accelerator that counts Airbnb, Coinbase and Reddit as alumni. Zhang and Ellis said Y Combinator connected them with Jordan Fish, the crypto entrepreneur and online personality known as Cobie on X, who offered them advice — including that they should avoid opening up the checkbook for key opinion leaders (KOLs).



Trading bots are kind of like souped-up DEX aggregators that specialize in quickly and successfully landing crypto transactions. They’re popular among users for things like sniping — a term for buying up memecoins right after they are created — and tracking new token launches. Many are built on Telegram, although Axiom is only a web app.



It’s a crowded field, but Axiom has separated itself from the pack in recent weeks. In late February, the trading bots Photon, BullX, and Trojan combined for around 75% of Solana trading bot volume, according to a Dune <a href="https://dune.com/adam_tehc/trading-bots-on-solana">dashboard</a>. Today, Axiom has more than 50% of market share by itself.



Why does Axiom command so much revenue? Blockworks Research analyst Danny Knettel <a href="https://blockworks-research.beehiiv.com/p/bitcoin-yield-reimagined">told Donovan Choy</a> of the 0xResearch newsletter that Axiom’s secret sauce was combining the two most popular trading products of the moment — Solana memecoins and Hyperliquid perpetual futures. Knettel told me he’s heard rumors that other crypto teams are considering merging these two product offerings as well.



Zhang said Axiom’s rakeback program, where power users are given claimable fee rebates as opposed to the tier-based fee system on venues like Binance, is popular among users as well.



Then, of course, Axiom is running a points program, which tends to spur a short-term increase in usage. For what it’s worth, Zhang and Ellis told me they have no plans of launching a token — which tends to be the key ingredient in airdrop farming.&nbsp;



The pair also said they won’t be raising additional venture funding following Y Combinator’s seed check, as the business is already quite profitable.



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Hyperliquid

Meet Y Combinator’s memecoin bet that made $10M last week

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Loopscale Labs had one tough weekend.



Bad actors on Saturday <a href="https://x.com/LoopscaleLabs/status/1916183179469246626">exploited</a> Loopscale&#8217;s pricing functions to make loan collateral seem worth more than it really was, resulting in the theft of approximately $5.7 million in USDC and 1,200 SOL (or around 12% of the platform&#8217;s total assets.)



It’s obviously not ideal to suffer an exploit just <a href="https://blockworks.co/news/solana-defi-protocol-launches-efficiency">two weeks after launching</a>, but this isn’t your typical “DeFi protocol caught with its pants down” moment. On the contrary, many DeFi folks have rallied behind Loopscale&#8217;s response to the exploit, <a href="https://x.com/teethrichards/status/1916490751677972651">applauding</a> the team&#8217;s speed, professionalism and commitment to user recovery.&nbsp;



Loopscale USDC and SOL vault depositors do face losses, though early signs seem to point to a partial or even full recovery.&nbsp;



For those unfamiliar, Loopscale&#8217;s story ‘til now unfolds thusly.&nbsp;



Loopscale is a decentralized finance (DeFi) project that <a href="https://blockworks.co/news/solana-defi-protocol-launches-efficiency">automates</a> recursive leverage to make yield farming more efficient. Loopscale’s bread and butter is “looping” — repeatedly borrowing and redepositing assets to amp up yield and capital efficiency. They weren&#8217;t the first team to try to morph this premise into a mainstream financial primitive, but they have quickly become one of the most compelling. Honestly, it&#8217;s pretty neat work.



While the looping process has <a href="https://fortune.com/crypto/2023/05/25/looping-yields-risky-investment-strategy-automated-defi/">historically been dangerous</a>, Loopscale&#8217;s system offered automation, liquidation protection features, and a user experience that abstracted away many of those perceived risks. Loopscale&#8217;s vaults, known for their attractive yields and tokenized market integrations, became a favorite among farmers looking for structured, lower-friction leverage.&nbsp;



Founded by a small but technically-strong team, Loopscale built a reputation as one of the more serious players among Solana&#8217;s DeFi cohort.



At the core of Loopscale&#8217;s recent growth was its adoption of RateX&#8217;s Principal Token (PT) markets. Simply put, Principal Tokens are created by splitting a yield-bearing asset into two components — principal and yield — allowing users to trade, hedge, or lock in fixed returns more flexibly. In Loopscale&#8217;s case, PT tokens were used as collateral in the vaults on the assumption that their pricing would remain tightly aligned to predictable discounting curves.



But then, on April 26, that predictable curve broke.



According to Loopscale, a person with malicious intent <a href="https://x.com/marygooneratne/status/1916189553494315010">manipulated</a> how its vault system priced the RateX PT tokens, making the tokens seem worth more than they were. As a result, the attacker was able to take out a series of loans that were not fully backed by collateral, managing to withdraw $5.7 million USDC and 1,200 SOL from Loopscale&#8217;s vaults.



The vulnerability was not in RateX itself, as Loopscale has <a href="https://x.com/LoopscaleLabs/status/1916204152318738470">emphasized</a>. The issue was in how Loopscale&#8217;s contracts priced the RateX tokens.



RateX founder Sean Hu <a href="https://x.com/seanhu001/status/1916378332696056270">explained</a>, &#8220;Based on our investigation, the Loopscale incident has been confirmed as an oracle attack. The attacker manipulated the oracle price of collateral on Loopscale to borrow 5.8 million dollars, draining funds from the lending pool. RateX&#8217;s protocol itself has no security issues, and no RateX users suffered losses in this incident.&#8221;



RateX also confirmed it is assisting Loopscale in tracking the hacker and recovering funds.



As soon as Loopscale detected the exploit, it <a href="https://x.com/LoopscaleLabs/status/1916190858463805611">halted</a> all market functions to prevent further damage — disabling new loops, deposits and withdrawals across the platform while working to triage the situation.



In the immediate aftermath, <a href="https://x.com/LoopscaleLabs/status/1916230435291713786">Loopscale&#8217;s handling of the crisis</a> drew frank praise. The team issued a clear initial disclosure, <a href="https://x.com/LoopscaleLabs/status/1916460306219348002">re-enabled critical functions</a> like loan repayments and loop closing by the following day (big for protecting borrowers from unforeseen liquidations), and began coordinating with law enforcement and security professionals.



Then, on April 28, Loopscale announced it had successfully <a href="https://x.com/LoopscaleLabs/status/1916460302704509372">established contact</a> with the attacker. The exploiter had responded to <a href="https://etherscan.io/tx/0x6dcbf6de26631d18eed84410e06741a1940e7f1fc7b7660bf82796d4d133d646">an onchain message</a> proposing a white hat resolution, agreeing (tentatively) to return a portion of the stolen funds in exchange for a bounty.



While Loopscale initially offered a 10% reward, <a href="https://etherscan.io/tx/0x98b6a312a4ab4b1d6c397d64b5e33dba1cc0d3cad3b89fb5d7fa28c28383115c">the exploiter countered</a> with a 20% ask, citing frozen assets on crosschain bridges and offering to immediately return part of the stolen funds to prove good faith.



At the time of publication, negotiations remain ongoing. However, the initial signals are positive. A partial return appears to have already occurred, and Loopscale is preparing a detailed post-mortem and structured plan for resuming vault withdrawals. The team has also promised users a clear roadmap for what recovery will look like.



Updated on April 29, 2025 at 2:24 pm ET: Modified to reflect there were no early RateX contributors on the Loopscale team.



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