This episode reveals Solana's strategic pivot from raw speed to sophisticated market design, detailing the roadmap to build internet-native capital markets that directly challenge traditional finance.
The Solana Internet Capital Markets Roadmap: A High-Level View
- Max Resnick from Anza, Solana's core developer shop, outlines a significant shift in strategy. While Solana has historically focused on simply shipping features as they are ready, the new Internet Capital Markets (ICM) roadmap provides a two-year forward-looking plan. This transparency is crucial for application developers who need to align their own resource planning and strategy.
- The core idea is to give applications more control over the blockchain's underlying mechanics, moving beyond simple state changes.
- Max draws an analogy to an iPhone app using the device's camera or gyroscope. Similarly, Solana applications need access to and control over transaction ordering and the scheduler to build more sophisticated financial products.
- Application Controlled Execution (ACE): This is a key concept in the roadmap, aiming to provide applications with fine-grained, millisecond-level control over how their transactions are sequenced. This is essential for building efficient and fair financial markets on-chain.
From Raw Speed to Market Microstructure
- The conversation highlights a maturing focus within the Solana ecosystem. While the initial goal was to build the fastest and cheapest blockchain for an on-chain order book, the community realized that speed and low fees alone are insufficient to create truly efficient markets.
- Max Resnick clarifies this is not a new direction but an evolution. The initial approach of "increased bandwidth, reduce latency" did not solve all the problems related to market efficiency.
- Market Microstructure: This refers to the detailed mechanics of how markets operate, including how transactions are ordered, how buyers and sellers are matched, and how prices are formed. The new focus is on refining these mechanisms.
- This shift is an industry-wide trend, with many ecosystems now examining the internals of scheduling and transaction sequencing to improve application performance and user experience.
- Austin Federa notes, "For years... the validator or the block builder... is the dictator. There are basically no rules about what a validator can and can't put in a block... This is not how traditional exchanges work."
Short-Term Vision: Jito's BAM and Application Controlled Execution (ACE)
- Lucas Bruder of Jito Labs details the immediate steps on the roadmap, focusing on the synergy between Anza's networking improvements and Jito's upcoming Block Assembly Marketplace (BAM).
- BAM (Block Assembly Marketplace): Jito's system for validators to outsource the complex task of block construction to specialized, competitive builders. This is designed to increase transparency, determinism, and efficiency in how blocks are created.
- BAM will serve as the initial platform for implementing ACE (Application Controlled Execution), allowing applications to gain control over their transaction sequencing without needing to fork the validator client.
- This approach represents a paradigm shift. Instead of MEV solutions that prioritize validator rewards at the expense of user experience, this new model focuses on creating the best possible outcomes for applications, which in turn drive network revenue and activity.
The Competitive Landscape: Hyperliquid and the Future of On-Chain Trading
- The panel discusses Solana's competitive positioning, particularly in relation to upstarts like Hyperliquid and the established Ethereum ecosystem. Austin Federa argues that any execution environment is a competitor, but the key is to learn from successful innovations across the space.
- Hyperliquid has demonstrated a massive market for a product that sits between a traditional decentralized exchange (DEX) and a centralized exchange (CEX) like Binance.
- It proved that a good bridge and a high-performance execution environment can compete directly with centralized giants for price discovery—a function that has historically remained off-chain.
- Strategic Implication: The success of models like Hyperliquid, which prioritize specific market mechanics like cancel orders, validates the ICM roadmap's focus on microstructure. Solana aims to integrate these features into its permissionless environment to foster a more competitive and innovative application layer.
Medium-Term Vision: D0ero's Physical Infrastructure
- Austin Federa introduces the medium-term components of the roadmap, centered on his project, D0ero (Double Zero), and its role in upgrading Solana's foundational infrastructure.
- D0ero: A decentralized physical infrastructure network of fiber optic cables, providing a high-performance, low-latency alternative to the public internet for blockchain systems. It brings the tools of traditional finance (TradFi) and cloud providers to the decentralized world.
- By offering direct, dedicated fiber routing between validators globally, D0ero eliminates the variability and jitter of the public internet. This determinism is critical for high-frequency trading strategies.
- Actionable Insight: D0ero's infrastructure is a key enabler for the rest of the ICM roadmap. By reducing network latency and increasing reliability, it allows core developers at Anza and Fire-dancer to push network parameters further, potentially leading to shorter block times and higher transaction capacity.
The Rise of Proprietary AMMs: A Paradigm Shift
- Max Resnick dives into one of the most significant recent trends on Solana: Proprietary AMMs (Prop AMMs). These are a new class of automated market makers that embed their core trading logic directly into a Solana program.
- This on-chain logic allows the AMM to react instantly to on-chain events without the round-trip latency required to communicate with an off-chain server.
- Currently, these Prop AMMs can quote extremely tight spreads (1-2 basis points) by leveraging a feature in Jito's auction that prioritizes transactions by tip-per-compute-unit (CU). Their oracle updates are tiny (under 1,000 CUs) compared to user trades (around 150,000 CUs), effectively creating a cancel-prioritization mechanism.
- Investor Takeaway: Max states, "I think the idea of having the core trading logic in a Solana program is the future of finance. And I think everybody who's not looking at this right now is making a huge mistake." This is a critical trend for researchers and investors to monitor, as it represents a fundamental shift in how on-chain markets are structured.
Long-Term Vision: Multiple Concurrent Leaders (MCL)
- Looking further ahead, Max Resnick explains the concept of Multiple Concurrent Leaders (MCL), a proposed architectural change to create a more stable and globally efficient market.
- MCL aims to solve the "cat-and-mouse" game where market structures constantly change to combat spam or exploits. By creating a stable, predictable equilibrium, it makes the network more attractive for large, institutional players.
- The architecture would allow multiple block producers (leaders) to operate simultaneously in different geographic regions (e.g., Tokyo and New York). This allows the network to "eat information from multiple sources at the same time."
- Austin Federa frames this brilliantly: traditional financial markets are hyperlocal (e.g., one data center in Secaucus). MCL transforms geographic decentralization from a performance bug into a key feature, creating multiple local markets that roll up into one global market and collapsing information arbitrage opportunities.
Solana's Vision vs. Ethereum's "Settlement Layer"
- The panel contrasts Solana's ambitious goal of replacing traditional financial infrastructure with what they describe as Ethereum's more resigned vision of becoming a "global settlement layer."
- Max Resnick argues forcefully that the "settlement layer" narrative is a "lack of vision" born from an inability to achieve the original goal of rebuilding finance on-chain.
- Quote from Max Resnick: "No, no, we're not doing that. Like we're going to replace you because you suck. That's the Solana vision. And the Ethereum vision is like, 'Oh, we tried but we couldn't really hack it.'"
- Austin Federa adds that the execution layer is where the most innovation and value can be added, as settlement is ultimately an abstraction for physical security, a domain already well-served by entities like the US government and Bitcoin.
The Path to On-Chain IPOs
- The discussion concludes with a practical hypothetical: could a company like SpaceX IPO on Solana today? The panel agrees that the technology is largely ready, especially in the wake of massive value destruction in traditional IPOs like Figma's, which was underpriced by over $3 billion.
- Tools like Gavl (from Ellipsis Labs) already provide fair launch auction mechanisms that achieve superior price discovery compared to the opaque, relationship-based process of TradFi IPOs.
- The primary challenge is ensuring that post-IPO trading volume and liquidity remain on Solana, rather than migrating to competitors like Hyperliquid who may offer better derivative products.
- The entire ICM roadmap is designed to ensure Solana can capture and retain this activity by providing the most sophisticated and efficient market environment.
Conclusion
Solana's Internet Capital Markets roadmap is a declaration of intent to compete directly with and ultimately replace traditional financial systems. By focusing on sophisticated market microstructure, application-controlled execution, and next-generation physical infrastructure, Solana is building a platform for true on-chain price discovery and global liquidity, moving far beyond the settlement layer narrative.
