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June 17, 2025

Solana ETFs Are Coming With Carlos Gonzalez Campo

This episode dives deep into the buzzing Solana ecosystem and broader crypto market shifts, featuring insights from Carlos Gonzalez Campo of Blockworks Research. Get ready for a roundup on potential Solana ETFs, the evolving DEX landscape, and the reverberations of Circle's IPO.

1. Solana ETFs: The Next Big Wave?

  • "I think Solana ETFs could gather some demand that Ethereum ETFs have struggled to grab just because Solana has a very clear storyline... like decentralized NASDAQ."
  • "If you enable staking for the ETFs you have like this predictable yield that almost makes it like a hybrid in TradFi terms between like a tech stock and a bond."
  • The SEC's request for amended S1 filings for Solana ETFs signals active engagement, with potential approval eyed for as early as July. This move has the market buzzing about a new institutional on-ramp to SOL.
  • Solana's straightforward "decentralized NASDAQ" narrative, coupled with the allure of staked yield (potentially ~4% real yield), could make its ETFs particularly appealing to traditional investors, possibly drawing more initial interest than Ethereum's more complex value proposition.
  • Europe offers a bullish precedent: 21Shares' Solana ETP boasts nearly $1 billion in AUM, outshining even its Bitcoin ETP, indicating significant institutional appetite that US ETFs could tap into. The SEC is reportedly open to including staking, a major differentiator.

2. The CLOB Wars and DEX Evolution

  • "A CLOB is basically just a central limit order book... It's a lot more efficient, right? The problem with central limit order books is that it has been very hard to pull off on chain especially on generalized L1s."
  • "What we're seeing is this trend of passive liquidity provision being phased out by more active market making and what you're seeing is like attempts to pull that off onchain."
  • The crypto trading world is witnessing a shift from passive AMMs to more capital-efficient Central Limit Order Books (CLOBs). However, implementing performant CLOBs on generalized L1s like Solana presents technical challenges, such as prioritizing cancel orders.
  • Hyperliquid, built on its own L1, currently reigns supreme in on-chain perps, driving a trend where projects like Zeta Markets (Bullet) and Fogo are developing specialized rollups or "network extensions" to optimize for CLOBs.
  • This evolution impacts players like Radium, whose DEX market share on Solana fell from ~60% to 35% as AMMs face pressure. The landscape is bifurcating: AMMs for memecoins, prop AMMs/CLOBs for liquid pairs, emphasizing the need to "own the user and the flow."

3. Stablecoin Gold Rush: Circle's IPO and Market Dynamics

  • "I think like for so long people had this question of how do I get exposure to stablecoins... and I think Circle is one of the purest ways investors have found to just get exposure to the stablecoin meta."
  • Circle's blockbuster IPO isn't just a win for the company; it's a massive validator for stablecoins as a breakout crypto product, offering investors a rare direct line to this burgeoning sector's growth.
  • Regulatory winds in the U.S. appear to be filling the sails of centralized, compliant issuers like Circle, potentially cementing their dominance domestically, even as Tether (USDT) is expected to maintain its global lead.
  • The profitability is undeniable, and while USDC's network effects in the U.S. are strong, expect competition to heat up, potentially even from traditional banks launching their own stablecoins.

Key Takeaways:

  • The crypto landscape is anything but static. Institutional interest in assets like Solana is growing, trading infrastructure is rapidly professionalizing, and stablecoins are emerging as a core financial primitive.
  • Solana ETFs are knocking on the door, potentially armed with staking yield and a clearer TradFi narrative than their Ethereum counterparts.
  • The DEX arena is a battlefield: CLOBs on specialized infrastructure are rising, challenging AMMs and reshaping liquidity for everything from blue-chips to memecoins.
  • Stablecoins are crypto's killer app going mainstream, with Circle's IPO firing the starting gun for broader investor participation and a new wave of competition.

For further insights, watch the full podcast: Link

This episode unpacks the significant market shifts ahead as Solana ETFs appear imminent, alongside a deep dive into the evolving landscape of on-chain trading infrastructure and stablecoin dominance.

Solana ETFs: A New Frontier for Institutional Investment

  • The discussion kicks off with breaking news, highlighted by host Jack Cuban, that the SEC has requested prospective Solana ETF issuers to file amended S1 forms. S1 forms are registration statements filed with the SEC for new securities to be publicly offered, signaling active engagement from the regulator.
  • Carlos Gonzalez Campo of Blockworks Research notes this development was “unexpected by the market” and suggests Solana ETFs could attract demand that Ethereum ETFs struggled to capture due to Solana's clearer “decentralized NASDAQ” narrative, which is simpler for traditional investors to grasp.
  • While not expected to match Bitcoin ETF inflows (around $130 billion), Carlos believes Solana ETFs could see inflows similar to Ethereum's (around $9-10 billion). He emphasizes, “dollar for dollar a dollar of ETF inflows is more impactful for SOL because it has like a lower market cap.” This makes even comparable inflows highly significant for Solana's valuation.
  • The conversation touches upon whether the rise of public crypto treasury vehicles, which offer staked exposure, might diminish the impact of Solana ETFs. Carlos draws a parallel to MicroStrategy and Bitcoin ETFs, suggesting “there's room for both,” as some investors prefer direct asset exposure without the added corporate risk of treasury vehicles.
  • A key detail is the SEC's openness to including staking within these Solana ETFs. Staking involves participating in network consensus to earn rewards, and its inclusion would make the ETFs more attractive by offering yield (estimated real yield around 4% APY for Solana). This contrasts with Ethereum ETFs, which initially stripped out staking.
    • Actionable Insight: Investors should monitor the SEC's final stance on staking in Solana ETFs. Its inclusion could significantly boost ETF attractiveness and inflows, potentially creating a new demand driver for SOL and influencing staking dynamics.

The Role of Liquid Staking Tokens (LSTs) in ETFs

  • Carlos Gonzalez Campo advocates for the approval of LSTs (Liquid Staking Tokens), like Jito's JTO Soul, within the ETFs. LSTs represent staked assets while maintaining liquidity. He argues this would “add a lot of operational efficiency to the ETFs” compared to direct staking by the ETF issuer.
  • Direct staking by an ETF would require holding a portion of assets unstaked to manage redemptions, leading to lower overall APY. LSTs, particularly like JTO Soul (which bakes rewards into its price), could allow for higher utilization rates and thus better yields for ETF investors.
  • Jito has argued that JTO Soul is not a security due to its decentralized reward distribution mechanism (Tip Router) and tax efficiency. Carlos sees this as a potential “win-win,” benefiting both Jito and ETF investors through enhanced efficiency and yield.
    • Strategic Implication: The potential integration of LSTs like JTO Soul into mainstream financial products like ETFs could validate LST models and drive significant value to the underlying LST protocols. Researchers should track regulatory acceptance of different LST structures.

The "CLOB Wars": Reshaping On-Chain Trading

  • The discussion shifts to the emerging narrative around CLOBs (Central Limit Order Books). A CLOB is an exchange mechanism matching buy/sell orders by price and time, akin to traditional exchanges, offering more capital efficiency than AMMs (Automated Market Makers), which use liquidity pools and mathematical formulas for pricing.
  • Carlos explains that CLOBs have been “very hard to pull off on chain especially on generalized L1s” like Solana due to technical limitations, such as the inability to reliably prioritize cancel orders, disadvantaging market makers.
  • Hyperliquid, built on its own permissioned L1, is highlighted as “objectively the king when it comes to perps on chain today,” doing about six times more trading volume than many Solana perpetuals combined. Its success stems from structural advantages enabling a viable CLOB.
  • This has spurred a trend of projects building specialized infrastructure—L2s, network extensions, or appchains—optimized for CLOBs. Examples include Zeta Markets' Bullet (a Solana network extension), Fogo's SPM chain, and Ellipsis Labs' Adless (an L2). Carlos notes, “people are chasing hype beta,” but acknowledges the genuine experimentation.
    • Emerging Trend: The "CLOB wars" signify a push towards more sophisticated, capital-efficient on-chain trading. Crypto AI researchers might see parallels in the need for specialized infrastructure for demanding applications, whether in finance or AI model execution. Investors should watch which platforms gain traction in offering low-latency, CLOB-based trading.

Perpetuals, Pump.fun, and DEX Dynamics

  • Jack Cuban questions if Pump.fun, a platform for launching memecoins, might enter the PERPS (Perpetual Futures) market. Perps are derivative contracts allowing speculation on asset prices without expiry.
  • Carlos views Pump.fun's model as more consumer-oriented, focused on high-turnover memecoins where AMMs are more suitable. He states, “for new assets, for longtail assets, AMMs like remain the most efficient way to handle the liquidity.” Perps markets, like Hyperliquid, see most volume from major assets (Bitcoin, Ethereum, Solana) and involve active market makers.
  • He suggests centralized exchanges are Hyperliquid's main competitors, though Hyperliquid's no-KYC (Know Your Customer) offering is a draw for some users. KYC is the process of verifying customer identities.
    • Strategic Consideration: The distinction between trading venues for highly liquid majors versus speculative long-tail assets is becoming clearer. Investors should understand these different market structures and user bases when evaluating DEXs or related tokens.

Radium's Evolving Market Position

  • Carlos discusses Radium, a prominent Solana DEX (Decentralized Exchange). Its market share has fallen from nearly 60% to 35% year-to-date, partly due to Pump.fun launching its own AMM (Pump Swap) and phasing out Radium for its token graduations.
  • Radium, heavily reliant on memecoins (80% of its volume), launched "LaunchLab" to compete with Pump.fun. Carlos observes a trend of protocols “trying to own the end user... own the flow.”
  • He highlights a bifurcation of DEX dominance:
    • AMMs like Radium and Pump Swap will likely continue to dominate longtail asset volumes (new memecoins).
    • For highly liquid pairs (e.g., SOL/USD, stable-to-stable), volume is increasingly flowing to prop AMMs like Sulfi, which often offer better price execution and are heavily utilized by aggregators.
    • Actionable Insight: Radium's challenge illustrates the competitive DEX landscape. Investors in DEX tokens should assess a platform's ability to attract and retain user flow, especially for new, high-turnover assets, or its efficiency in serving institutional/aggregator flow for major pairs.

Stablecoins: Circle's IPO and Market Dominance

  • The conversation concludes with the implications of Circle's (issuer of USDC) successful IPO. Jack Cuban suggests it reflects strong investor conviction in stablecoins as a breakout crypto product.
  • Carlos believes centralized issuers like Circle and Tether (USDT) are gaining an “insurmountable lead” over decentralized stablecoins, partly due to favorable regulatory trends.
  • While Circle (USDC) may be favored by US entities, Carlos thinks Tether (USDT) will maintain global dominance. He notes, “USDC's network effects will be hard to disrupt like in the US specifically,” but anticipates competition, potentially from banks launching their own stablecoins.
  • The Circle IPO's success is attributed to it being one of the “purest ways... to just get exposure to the stable coin meta,” a question many investors have had.
    • Strategic Implication: The success of Circle's IPO underscores the immense value in the stablecoin sector. For Crypto AI investors, this highlights the potential of infrastructure plays that underpin major crypto use cases. The regulatory landscape will be crucial in shaping the competitive dynamics among stablecoin issuers.

The episode underscores a maturing crypto market, with institutional products like Solana ETFs gaining traction and on-chain infrastructure evolving towards greater sophistication. Investors and researchers should monitor the interplay between regulatory developments, technological innovation in trading (CLOBs, LSTs), and the persistent growth of foundational elements like stablecoins.

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