Weekly Top Stories - 4/18
This week in the newsletter, we write about Solana getting its first ETF in North America, Ethena launching its own chain, and we provide more details about the Solana proposal we introduced this week.
Spot Solana Staking ETFs Launched in Canada
On Wednesday, April 16th, four spot Solana ETFs began trading on the Toronto Stock Exchange, following Monday's approval from the Ontario Securities Commission (OSC). The products were launched by four asset managers: 3iQ, Purpose, Evolve, and CI Financial. CI partnered with Galaxy Asset Management to bring the CI Galaxy Solana ETF (SOLX) to market.
These ETFs offer staking capabilities, enabling them to generate an additional 2-3.5% in yield on top of SOL's underlying returns. They achieve this by working with staking partners to delegate a portion of the fund’s assets, with up to 50% eligible for staking as outlined in each fund’s prospectus. Of the staking rewards, a portion is typically allocated to the ETF shareholders while the remaining portion goes to the manager, though the exact breakdown varies between issuers.
Management fees range from 0.15% to 1%, with some providers waiving fees during the initial launch period. After two days of trading, total assets under management across the four ETFs stand at approximately $73.5 million.
OUR TAKE:
Canada is the first country to launch spot SOL ETFs with staking. Before this, Europe had listed SOL ETPs, and the US has seen two futures-based SOL ETFs issued by Volatility Shares. However, none of these offerings combined direct spot exposure with staking until now.
The inclusion of staking marks a major milestone, as it brings yield into a regulated crypto ETF structure for the first time. This feature has been long requested by investors and asset managers for Proof-of-Stake protocols like Solana and Ethereum, where staking is an integral part of the token’s value proposition. Traditional investors often seek income-generating strategies, and staking now offers a way for crypto assets to align with that demand. In the short term, this additional income may make SOL more attractive relative to non-yielding assets. However, staking rewards may compress over time, and we believe that over the long term, broader fundamentals will remain the core drivers of value.
Market sentiment remains subdued given the current macroeconomic backdrop. BTC spot ETFs globally now represent 6.21% of BTC’s market cap, while ETH spot ETFs account for around 1.71%. It remains to be seen how much demand SOL ETFs will capture, but if they follow a similar adoption to ETH, they could reach around $1.19 billion in AUM, pending if/when US SOL spot ETFs are approved.
The CME launched Solana futures on March 17th, which we view as a typical precursor to a spot ETF launch in the US. Beyond SOL, several other spot crypto ETF filings are currently in the pipeline, including XRP, LTE, and DOGE. The market continues to await signals from the SEC on when these crypto ETFs might be approved. Additionally, the SEC is also considering the question of allowing ETFs to stake a portion of their holdings, and Canada’s experience could be instructive and supportive, depending on their level of success. – Jianing Wu
Ethena Labs and Securitize launch a RWA-focused Ethereum Rollup
Ethena Labs, in partnership with tokenization platform Securitize, has announced the development of Converge, a high-performance Ethereum rollup aimed at integrating traditional finance (TradFi) and decentralized finance (DeFi). Converge is designed to support tokenized real-world assets (RWAs) and stablecoins, with the goal of onboarding institutional capital onto the blockchain. Converge is built upon the Arbitrum tech stack, Celestia as its data availability layer, and a custom Conduit G2 sequencer for high throughput.
Central to the Converge ecosystem will be Ethena’s synthetic dollar, USDe, and their tokenized treasury, USDtb, which will act as native gas tokens. Converge will support both permissionless DeFi applications and permissioned environments for compliant, institutional-grade asset tokenization, allowing traditional institutions like BlackRock and Apollo to issue and manage blockchain-based financial products alongside DeFi protocols.
The Converge Validator Network (CVN) will act as the blockchain’s governance and security layer. It will be powered by validators who stake Ethena’s governance token, ENA, and will have authority to intervene in emergency situations to protect user assets and ensure network integrity. The CVN will be launched shortly after the mainnet goes live and will include guidelines for validator selection and operation. According to Ethena and Securitize, the developer testnet is expected within weeks, with a full mainnet rollout targeted for Q2 2025.
The launch of Converge reflects a broader industry trend where traditional financial institutions increasingly explore DeFi tools to manage RWAs like tokenized bonds and stablecoins. This blending of TradFi and DeFi has drawn both excitement and caution within the crypto space. Some may see it as a natural evolution bringing in more assets to DeFi, while others raise concerns about the risks of incumbent institutions gaining influence over decentralized systems. However, with the growing demand for efficient, transparent, and secure financial infrastructure, platforms like Converge aim to provide a robust foundation for the next phase of blockchain adoption.
OUR TAKE:
The announcement of Converge marks more than just another entry into an increasingly crowded blockchain landscape. Its architectural choices, anchored in Ethereum compatibility, Arbitrum rollup technology, and Celestia’s modular data availability, signal a deeper shift in how the next generation of blockchain networks may be built and optimized.
Converge opts for a custom sequencer atop Arbitrum technology and leverages Celestia for data availability, effectively modularizing its stack for speed, scalability, and institutional trust. This diverges from monolithic Layer-1s like Solana, which bundle execution, consensus, and data availability into a single protocol. Instead, Converge’s approach mirrors Ethereum’s long-term vision: a base settlement layer supported by an ecosystem of rollups and specialized infrastructure.
But what makes Converge notable is its tailored appeal to institutions. While Ethereum rollups today prioritize permissionless innovation and community-driven scaling, Converge adds a permissioned layer with the Converge Validator Network (CVN), functioning as a governance and emergency failsafe body. In doing so, it blends DeFi composability with TradFi risk mitigation. It’s a calculated move to court real-world asset issuers, like BlackRock and Apollo, without alienating developers who want to build in a familiar EVM environment. This mirrors developments we have seen recently from other large TradFi players, with the DTCC announcing a permissioned RWA settlement chain. Increasingly, it looks like the Ethereum DeFi ecosystem is undergoing a mitosis, with TradFi entrants forking and adopting the battle-tested tech stacks of Ethereum and its DeFi ecosystem for their own purposes. Thankfully for the cypherpunks, Converge is designed to be permissionless by nature with permissioned aspects, rather than the fully permissioned (and likely private) DTCC settlement chain. Hopefully, the open-source ethos of crypto prevails, though chains like Converge and the development of an open financial system built for all proceed apace, but only time will tell. – Thad Pinakiewicz
Galaxy Research Published a Discussion to Adjust Solana’s Emissions Curve
Yesterday, Galaxy Research published a discussion for a Solana Improve Documents (SIMD) proposal to amend Solana’s inflation curve. SIMD-228, a previous proposal addressing Solana inflation, was an important proposal that sparked significant community engagement. While there was plenty of debate around its specific details, the community appeared to agree on its primary objective: SOL inflation and security overpayment should be reduced. What we learned through 228’s vote was less so that the community disagreed with the intention of the proposal and more so that limitations in the governance process impeded the community’s ability to converge on a universal agreement around the parameters of such a highly impactful change to the network. As a result, the proposal failed.
In such a proposal where all network participants are impacted differently, and may seek a range of possible outcomes on the affirmative side, proposals with only YES / NO / ABSTAIN options may not be the most efficient way to reach consensus. A market-driven approach to governance, as proposed in our discussion, allows the community to act on the shared belief that inflation is too high while maintaining predictability, preserving self-interest, and eliminating the need to repeatedly take the idea to a single-outcome vote until a universally acceptable number is proposed. Instead of throwing darts until the community is happy with an individual proposal, it is more efficient to simply ask each person what they want and settle on the aggregate.
So, what was our proposal? “MESA,” or Multiple Election Stake-Weight Aggregation. The proposal suggests maintaining the fixed, time-dependent disinflationary curve with the set 1.5% terminal rate that is already implemented on Solana (to limit input assumptions on its impact and maintain relatively higher levels of predictability) and sets forth multiple outcomes that steepen the rate of deflation (currently 15%) from which an average, or some other math (e.g., median) is derived and implemented. This approach is much more market-driven than single-outcome votes, effectively allowing each individual validator to vote for the new inflation schedule that best aligns with how they or their delegators view, assume, or prefer the future, while ultimately maintaining the predictability of a fixed curve. Paired with split voting, we think this market-driven approach to protocol governance is democratic and progressive, offering an original method for protocol governance.
OUR TAKE:
The goal of Galaxy Research in introducing this discussion to the Solana community is not to set forth a specific SOL inflation curve or emissions rate. Rather, the motivation is to present a voting framework that the community can use to reach consensus on highly impactful votes that may require a nuanced range of outcomes, tailored to individual perspectives and circumstances, with less friction than is possible through traditional YES / NO / ABSTAIN votes. While the discussion applies the framework to a vote on SOL’s inflation curve, we believe it can be used in any proposal that requires a spectrum of subjective, quantitative inputs from the community. As a result, we view the precise details of the initial draft (e.g., the math used to arrive at a specific deflation rate) as a foundation that the community can shape into what it collectively believes is most ideal while using the multiple election framework we outlined. We aren’t dogmatic about such components of the discussion and encourage the community to weigh in on them.
We look forward to engaging further with the Solana community on the discussion and appreciate the questions, comments, and concerns that have already been raised. – Zack Pokorny
Charts of the Week
The aggregated cost of borrowing/minting stablecoins onchain is the lowest it has been since October 2023. This comes as the relative demand for stablecoin-denominated leverage onchain is at 18-month lows. Notably, the cost of borrowing/minting stablecoins onchain is about equal to the Fed Funds Rate (FFR), which served as the support rate in September 2024. Since then, however, the FFR has been reduced from 5.13% to 4.33%.
The supply/demand mechanism that dictates floating rates in DeFi shows us why rates have come down so meaningfully since the start of 2025. In onchain lending markets, like Aave, interest rates are a function of the amount of an asset being borrowed over the amount of an asset supplied to the application – rates rise as more of an asset is borrowed v. the amount supplied, and vice versa. Since the start of the year, there has been a steady amount of stablecoins supplied to the market, while demand has fallen, dragging rates to new lows.
Other News
Unofficial Base token minted through Zora surges to $13 million before crashing
Binance CEO says exchange is helping countries with crypto reserves
Trump meme coin team withdraws $4.6M to Coinbase ahead of $309M token unlock
Hackers targeting Ethereum scaling network ZKsync steal $5M in tokens
Tether expands investment portfolio with crypto payments app Fizen
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