Not just FOMO: The new trends and patterns behind Solana's treasuryization

Organizer: Scof, ChianCatcher

As more and more publicly listed companies include SOL in their balance sheets, this is no longer an isolated phenomenon but may mark the emergence of a new type of treasury model. Companies are no longer just observing the cryptocurrency market but are beginning to try using SOL as a sustainable asset allocation tool.

In this issue of Space, we invited Margie, Head of Asian Market at Solayer, Richard Liu, Co-founder of Huma Finance, Darcy, Head of Investor Relations at SonicSVM, and Ru7, CMO of SOON, to focus on this emerging trend of "SOL version micro-strategy:"

After Bitcoin, can SOL become the next pivot for enterprise-level treasury? Will continuous buying change the price logic of SOL? What impact will the entry of institutional players have on DeFi and the staking yield model? If a listed company can generate cash flow by staking SOL, will more companies follow suit in the future and consider SOL as a "productive asset"?

Is this a true trend, or another round of FOMO?

Question 1: As more and more publicly listed companies incorporate SOL into their treasury, will this disrupt the current market structure? How might this trend of "treasury incorporation" change the industry's positioning and expectations of SOL?

Richard: I think this reflects everyone's recognition of Solana. A few years ago, when FTX had its issues, Solana faced enormous pressure, but it persevered and formed a very strong ecological cohesion. Today, Solana is developing very rapidly across multiple tracks, and the migration of projects like Ribbon also proves this.

Essentially, this is a positive response from the market to the resilience and potential of the Solana ecosystem.

In contrast, BTC has companies like MicroStrategy holding it long-term, which influences its price trends. I believe Solana will not replicate this path; it is more likely to carve out a broader path through its own application expansion capabilities.

Especially the Staking mechanism, which brings returns and application logic, makes it a reasonable and attractive trend for enterprises to incorporate SOL into their treasury. This trend will not happen overnight, but will evolve gradually as the infrastructure matures, much like Ethereum did in its early days. BTC is digital gold, its status is undoubtedly solid; however, in terms of smart contract platforms, it is no longer certain who will emerge victorious. Three years ago, most people thought EVM was the only choice, but now many have regarded Solana as a strong competitor.

By combining technical capabilities with staking returns, I believe that allocating funds to Solana will become the choice of more and more enterprises.

Darcy: Financialization is just one aspect of Solana; it doesn't necessarily have to follow the path of Bitcoin as a "digital gold." Bitcoin is more often seen as a store of value, while Solana is a public chain network with deep application value.

Currently, there is indeed a new trend in the market: whether institutions hold positions is becoming a standard for measuring the maturity of a public blockchain. This is similar to how we used ETF fund inflows to assess the investment trends and price movements of BTC or ETH in the past. In the future, investors may also consider "whether institutions hold positions in SOL" as a key indicator for judging its development prospects. From a corporate perspective, the treasury trend of Solana may gradually reshape the existing market structure.

I can feel that the Solana team is very proactive and systematic in this regard. Moreover, on-chain data also shows that in the past, about 80% of on-chain activity came from retail users or airdrop participants, but now this proportion has decreased to 50-60%. This indicates that an increasing number of large participants are entering the market.

I believe that this is not only a trend for Solana but also a trend for the entire cryptocurrency market — the crypto world will increasingly become a "playground for institutions."

Margie: I would like to add an observation from the perspective of supply and demand. The total supply of Solana is limited, and currently, about 65% of the tokens have been staked, which means that the actual circulating supply in the market is relatively low. If more and more publicly listed companies buy Solana and hold it for the long term, it effectively further reduces the circulating supply in the market. Against this backdrop, once market demand rises, it may trigger short-term supply-demand tension, thereby driving up prices.

However, I believe that what the market really cares about is not just who is buying, but rather why these companies are buying. If they are doing so for long-term strategic considerations by incorporating Solana into their treasury, it indicates that they have a clear confidence in the future of Solana.

This point is very worth keeping an eye on. We might as well observe for a while longer to see if these operations are sustainable and whether they will form a structural trend.

Ru7: I used to work in the traditional finance industry, so I pay special attention to the significance of the concept of treasury management for Solana.

I believe that "financialization" itself is a significant boost for Solana. If the market gradually shifts from being dominated by retail investors to long-term holdings by institutions, it will make Solana more stable, and its volatility will significantly decrease. This is because corporations, as investors, tend to operate on longer cycles and do not trade as frequently as retail investors, possibly adjusting on a quarterly or even lower frequency.

In addition, institutional participation will also improve Solana's liquidity. Many Web2 users will indirectly participate in Solana investments through Robinhood, wealth management institutions, and even large asset management companies such as Wellington and BlackRock. This will gradually increase Solana's weight in "alternative asset" portfolios, thereby gaining a status similar to BTC.

As Solana is incorporated into more asset portfolios, it may gradually grow into an enterprise-level strategic asset. In the long run, it could even be comparable to gold and Bitcoin in certain functions.

Institutional holdings for Solana are not just about capital inflow, but also serve as an ecological endorsement. It can enhance the confidence of developers and long-term investors, and is expected to attract more traditional financial capital into the Solana ecosystem.

Question 2: What are the unique advantages and potential risks of Solana as a treasury asset compared to Bitcoin? Why are enterprises willing to choose it?

Richard: I throw out a possibly somewhat radical viewpoint: I have never believed that Bitcoin would be the most central and vital asset in the crypto space, from the past to the present. Although Bitcoin is referred to as "digital gold", in reality, the function and influence of gold cannot be compared to that of internet infrastructure.

Bitcoin, as an asset, does not possess infrastructure attributes. Public chain platforms like EVM or Solana have the capability to build large ecosystems, supporting a wealth of practical applications. I firmly believe that, in the long run, chains capable of hosting and nurturing application ecosystems have a vitality that far exceeds that of Bitcoin.

This is the first advantage of Solana: it has immense long-term market space, which could even surpass Bitcoin.

The second advantage is that Solana is an asset that can generate returns. Bitcoin itself does not have direct earning capabilities, whereas Solana can produce stable on-chain yields through applications such as staking, DeFi, and payments.

Currently, Solana's DeFi is still in the development stage, but progress is rapid. If we find that Solana is more suitable than EVM when building certain features, the earning potential of Solana will also be further enhanced. This creates an essential difference between it and Bitcoin: Bitcoin relies on "faith," while Solana's sustainability can be based on the actual value creation within the ecosystem.

Of course, Solana also faces significant risks: its scale is much smaller than that of Bitcoin, and its ecosystem is not mature enough. Therefore, companies that choose to include Solana in their treasury are mostly those willing to take on certain risks and hope to create a differentiated strategy through this choice.

Especially at the current stage where the SOL ETF has not yet been approved, the companies that enter first can use this to create their own brand differentiation. This not only provides an advantage for the companies themselves, but may also guide other companies to follow up later.

However, to form a trend of scale, it still requires the evolution of time and also the continuous effort of the Solana platform in brand building and promoting key projects.

Ru7: I believe Bitcoin is more like gold, serving as a store of value; while Solana is closer to Tesla or Nvidia, being a growth-oriented tech company with strong technology and a diverse ecosystem. Solana not only has applications in DeFi, NFTs, Web3, etc., forming a complete business loop, but also has a clear business model and growth potential.

From a traditional investment perspective, investing in Solana is like early investment in Tesla, focusing on its long-term market space and strategic value. Of course, it also carries high volatility risks, which pose challenges for traditional treasury management. At the same time, Solana is highly dependent on the developer ecosystem, and the activity level of the ecosystem directly affects its price performance.

Nonetheless, I remain optimistic about Solana's long-term potential, as it has the conditions to become an important asset in the cryptocurrency market.

Darcy: The positioning of Solana and Bitcoin is fundamentally different. Bitcoin is more like a store of value, while Solana has the characteristics of being stakeable and yield-generating, with an annual yield currently between 6% and 8%, which adds an extra layer of holding value compared to Bitcoin, which solely relies on price appreciation. At the same time, Solana is closer to an internet company, with a diverse ecosystem that includes DeFi, NFTs, Web3 applications, etc., possessing platform-level commercial attributes. If we use a traditional analogy, Bitcoin is like gold, while Solana is more like Tesla or the Android operating system.

As more and more enterprises and even financial institutions participate in staking, the staking yields of Solana may evolve into an "on-chain benchmark interest rate." This not only attracts institutional holdings but also gives rise to various structured products within the ecosystem, such as leveraged combinations based on staking, fixed income products, or on-chain "convertible bonds." Consequently, the asset logic of Solana becomes more robust, shifting from speculative assets to fundamental financial instruments.

In addition, Solana also carries a more pragmatic narrative: making Web3 affordable and accessible for everyone. This goal is more aligned with the practical needs of developers and entrepreneurs than Bitcoin's "trustless currency" and is also more conducive to driving large-scale adoption. I believe that it is the combination of technological availability and the structure of benefits that gives Solana a unique advantage in enterprise treasury scenarios.

Question 3: Upexi announced last month that it would invest 95% of its financing into the construction of the Solana treasury. Is Upexi an isolated case or the beginning of a trend? Will more companies follow its strategy in the future, incorporating SOL into their financial systems and creating a continuous influx of institutional participation? Do you think there will be publicly traded companies in the future that play a long-term pricing central role like MicroStrategy, acting as "SOL godfathers"? Is it possible for such a role to be established in the SOL market?

Darcy: We are more focused on the medium to long-term trends of Solana. Although the path may not be entirely clear, the direction is evident. While there is short-term speculation, I do not view it as a bad thing. On the contrary, it can accumulate attention and trust capital, driving Solana towards institutional development and attracting more applications and financial institutions to participate.

With Upexi investing in Solana, it has attracted market attention and even led other companies to follow suit, which is similar to the path taken by MicroStrategy when purchasing Bitcoin back in the day. Although this phenomenon comes with speculative risks, the 'institutional entry' signal it releases is still significant. It represents the alignment of short-term behavior with long-term objectives, and ultimately has the potential to coalesce into a systematic institutional trend.

Ru7: I believe it is very likely that "Solana godfather" companies or representatives will emerge in the future, just like MicroStrategy for Bitcoin. Their buying behavior will become an anchor point for market confidence, reinforcing the long-term value perception of Solana.

In the current macro uncertainty, the market needs such tangible signals even more. This role may not just be one person or company, but rather a collective of institutional groups formed by asset management companies, hedge funds, and others. Once these institutions begin to consistently buy Solana, they will take on the role of a "pricing center," influencing market sentiment and strategies, much like the development path of the Bitcoin market.

With the increasing acceptance of mainstream funds, Solana is expected to become the third widely recognized asset after BTC and ETH. As long as an institution or investor takes the lead, this process may be realized within this cycle and push the crypto industry into a higher level of institutionalization.

Margie: Before Upexi, projects like SolStrategy had already established a deep presence in Solana. However, compared to them, I think the difference with Upexi is that its approach can be described as "All in Solana"; this is very aggressive and can be considered a relatively pioneering case at the moment. On the day Upexi announced its acquisition of Solana, the stock price skyrocketed from $2 to $22, although it later retraced, the market's attention to this move was very high.

As for whether Upexi will lead more companies to follow suit, I believe the key lies in whether it can continuously and deeply invest in the Solana ecosystem. If Upexi goes beyond just the numbers in the financial statements and truly engages in ecological construction to achieve practical application and transformation, then its actions would not just be a one-time investment, but could potentially become a template for a corporate treasury strategy.

Regarding whether there will be public companies similar to "Solana's Godfather" like MicroStrategy, I find this topic particularly interesting. We can review MicroStrategy's path. Since 2020, they have converted most of their cash reserves into Bitcoin, accumulating over 25 Bitcoin investments in three years. This shows that it is not a one-time action, but rather has a clear long-term asset allocation logic. At the same time, they have developed financial derivatives and technology layouts around Bitcoin, and have become part of the Bitcoin narrative.

In the Solana market, there is currently no company that has been able to exert such a strong and lasting influence in terms of capital and narrative like MicroStrategy. Although Upexi's actions are quite aggressive, I believe it is still in a relatively early stage and cannot yet take on the role of a 'pricing center'.

However, I believe such roles could emerge in the Solana market. The key lies in whether these companies or individuals can establish a clear long-term strategy, rather than just a one-time treasury allocation. If such a company really does emerge in the future, it could have a profound impact on Solana's pricing logic, market sentiment, and even the narratives in mainstream media.

Richard: Personally, I believe that in the long run, Bitcoin does indeed need the presence of a 'Godfather-like' figure, because the narrative of Bitcoin itself is built on faith. However, if Solana also needs to rely on such 'Godfather-type' figures for support, I would see that as a failure.

Why do I say this? Because Solana itself is a practical infrastructure whose value should come from its ecosystem. If it needs a "godfather" to endorse it, that indicates that Solana's own ecosystem and value creation capabilities are insufficient. For me, Solana's church should be its ecosystem itself, including the Solana Foundation and the developer community.

Just like in the Web2 era, technology companies built strong platforms and application ecosystems without relying solely on financial capital. Financial capital can participate and support, but innovation and leadership must come from the platform itself. Whether it's Android or Tesla, this is true. Solana should be the same. Its "church" should come from within the ecosystem, rather than being defined and supported by some external company or investor.

Question 4: If more and more institutions incorporate SOL into their treasury and participate in staking, will the yield model of DeFi be reshaped? Will the involvement of institutions bring stability, or will it dilute the earning potential of existing users?

Richard: I personally feel very deeply. Before introducing institutional investors, our asset management process was relatively simple, but once the assets were placed into an SPV, facing investors with a Wall Street background, all processes must be extremely standardized, with financial structures, fund distributions, and risk indicators clearly set. Although this high-intensity scrutiny brings short-term pain, it significantly enhances our operational standards and transparency.

I believe that the Solana ecosystem will also undergo a similar process. The entry of institutions will significantly raise the threshold for the entire ecosystem, and projects that lack real returns and support will be marginalized, while high-quality projects with real business models will receive more attention. This filtering process is beneficial, although it may bring about a period of adjustment, it is a long-term positive for the ecosystem.

I don't think institutions will immediately change the market landscape for Solana, but they will gradually shift Solana's narrative from a meme coin to a role more focused on payments and financial infrastructure. This is an irreversible trend that just needs time to settle and materialize.

Darcy: I also believe this is a foreseeable trend. Solana definitely hopes to present a more institutional and high-end image in the future, and from the perspective of DeFi participants, the entry of institutions will bring changes to the revenue model.

First, as institutions inject funds into the treasury, the overall security and stability of the ecosystem will improve, but the APY will correspondingly decrease, and the volatility of returns will reduce. At the same time, in search of higher yields and liquidity, institutions and users may participate more in LST (liquid staking) protocols, such as JitoSOL, mSOL, bSOL, etc., further promoting the integration of DeFi and staking systems.

On the other hand, the entry of institutions does dilute some of the original users' earnings. Institutional capital has a longer cycle and lower trading frequency, which enhances the robustness of the network, but compresses the short-term profit space for retail investors. However, the future ecosystem will gradually diversify, allowing retail investors to choose high-risk, high-reward Meme Coins or complex products, while users who prefer stable returns can participate in Staking.

As the stability of the ecosystem improves, Solana and the entire cryptocurrency market will be seen by more people as a reliable asset allocation rather than just a speculative tool. I believe this is an inevitable direction of evolution.

Ru7: In fact, the Solana ecosystem itself possesses a strong "self-sustaining ability." Even if more and more institutions incorporate SOL into their treasury in the future, leading to an increase in staking rates and a decrease in individual yields, the diversification and product innovation capabilities of the Solana ecosystem will bring more structured yield products, continuously innovating the entire yield model without simply diluting the existing users' yield space.

Solana is a developer-driven ecosystem where new protocols and financial products emerge continuously, enriching the yield models and providing users with more choices. The entry of institutional long-term funds can not only enhance the stability of the capital pool but also bring scale effects, attracting more users to participate, thus creating a positive feedback loop.

I think this change is similar to financial products like credit bonds and ETFs in traditional finance. In the future, there will be more layered yield products in the Solana ecosystem. Users can freely choose based on their risk preferences, such as opting for high-yield products similar to credit bonds or stable low-risk products like U.S. Treasuries. As the ecosystem becomes richer, users will not be diluted; instead, they will gain more choices and a better asset allocation experience.

Solana does not need to rely on a "godfather" figure for support; its own ecosystem and technological innovations are its greatest value. Just like Tesla, people are not simply looking at Musk, but rather at the company's determination to send humans to Mars. The future of Solana lies in the potential and expectations of its own ecosystem development, rather than relying on a specific enterprise or institution for endorsement.

Question 5: Currently, SOL lacks the Bitcoin-like scarcity and the "faith layer" user structure, which poses a challenge for enterprises to promote long-term financial strategies. What do you think should be done to stimulate holders' willingness to hold SOL long-term or even continue to increase their holdings? What can be relied upon to establish sufficient confidence and consensus?

Richard: My position is that the Solana ecosystem itself is the biggest support. Long-term holders are likely to come from within the Solana ecosystem, especially from top projects like Jupiter and Helios. In the future, platforms like Huma, if they grow to a similar level, will also become the most steadfast supporters of Solana. These projects not only have strong vitality and resources, but will also continue to accumulate SOL due to their reliance on the Solana ecosystem.

I believe that what will truly drive the long-term development of Solana in the future will not be external financial groups, but rather the projects within the ecosystem. What they bring is not just capital, but comprehensive ecological interactions and construction, which will greatly enhance Solana and release value far beyond mere financial investment.

Returning to the most fundamental difference, Bitcoin mainly relies on belief because it is digital gold, whereas Solana is a network, an infrastructure. Its core value lies in the builders and developers within the ecosystem. In the future, as we see projects like Jupiter continuously supporting Solana, the strength of the ecosystem will naturally become stronger.

Darcy: I completely agree with Richard's point of view. Solana does not need a religious leader-like figure. When a project lacks practical applications, it needs faith to maintain its value; once it has practical applications and enters the lives of countless households, there is no need to deliberately create faith. Actual use cases and application logic are the best support for value.

As I mentioned before, Solana is more like the Android of Web3; it represents a pragmatic, inclusive, and practical vision. Through code, it enables more people to afford and access Web3, whether it's games, payments, DePIN, or payment experiences like Visa, all of which are real applications that users can directly experience.

Therefore, I believe that Solana's path should be to promote the popularization of Web3, rather than focusing on the religious narrative or elitism of Web3. Its driving force comes from applications, not beliefs.

Ru7: I understand that the starting points of traditional finance and cryptocurrency investments are fundamentally different. In the crypto space, many investments stem from cultural attributes and beliefs, while Solana resembles a technology company with real-world applications and profitability, even more like Apple than just Tesla. This is because Solana has a rich application ecosystem that goes beyond a single product, encompassing diverse scenarios such as DeFi, payments, NFTs, and DApps, much like how Apple offers phones, computers, watches, and the App Store.

From an investment perspective, Solana has a strong developer ecosystem and continuous innovation capabilities, with solid fundamentals. For traditional financial institutions, this is precisely the type of asset they are willing to allocate to, as they focus on a five to ten-year return cycle, and Solana's future growth potential clearly aligns with this logic.

I also look forward to seeing more institutions like Morgan Stanley, Goldman Sachs, and BlackRock incorporate Solana into their core configurations in the future, even becoming major components of ETFs, driving more users and capital to pay attention to Solana. When this phenomenon occurs, Solana will become a brand that is frequently mentioned and used in daily life, just like Apple, thereby forming a true layer of belief. This belief is no longer an empty cultural narrative, but a consensus formed based on the popularity and frequency of application usage.

Especially in the payment sector, the Solana network has been able to support users in purchasing real goods with cryptocurrency, and in the future, it can help more underdeveloped countries improve payment efficiency. I believe that this tangible application will continually enhance the market's confidence in Solana and the willingness to hold it for the long term.

Margie: From a market perspective, to encourage more people to hold or continuously increase their positions in Solana long-term, I believe it is essential to establish a clear and long-term narrative, such as emphasizing that Solana is the fastest blockchain in the world with ultra-low latency and other technological advantages. This narrative needs to be reinforced repeatedly to create market memory, just as we continually emphasize the million-level TPS capability when promoting Infinite SVM.

Secondly, the Solana ecosystem itself is already very strong. We need the leading projects and founders within the ecosystem to continue to speak out, get involved personally, and actively build confidence. If the market can associate these leading projects with the long-term value of Solana, then this sense of trust will be easier to form, and users will be more willing to hold Solana long-term.