Howdy!

Many of my sources appear to be out of office currently, but Lightspeed never sleeps. Except for when it does. Please do not hit me up on Wednesday. 

Today, we’ve got a Solana futures ETF filing and a potential layer-1 for AI agents:

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Solana gets a leveraged ETF filing for non-existent futures

A curious filing landed on the SEC’s database Friday. 

Volatility Shares filed for a Solana futures ETF, which would issue securities that track the price movements of underlying SOL futures contracts trading on a CFTC-registered exchange. There’s a catch though: No such SOL futures contracts exist. ETF analysts nevertheless said the filing bodes well for spot Solana ETFs’ chances of being approved sometime in 2025. 

“Many believe that with Paul Atkins as SEC chair, a wider range of products will be possible. This filing appears to be a bet on that,” Bitwise CEO Hunter Horsley said in a direct message.

Volatility Shares is a leveraged ETF specialist based in Palm Beach Gardens, FL. The smallish firm has arguably still helped shift the overton window for regulators: Grayscale argued in 2023 that Volatility Shares’ leveraged bitcoin futures ETF was riskier than Grayscale’s proposed spot bitcoin ETF, so Grayscale’s product should be approved. 

Now, Volatility Shares is offering another nonconsensus product in a Solana ETF space that is currently built on making bets. Its Solana futures ETF would give some investors exposure to 2x or the inverse of the daily price change of SOL futures. SOL futures contracts don’t currently trade (bitcoin and ether both have futures trading on the CME), but Bloomberg analyst Eric Balchunas said the filing is probably a good sign that SOL futures are “on the way.” 

Regulators could be more likely to approve spot ETFs if they see “a healthy market that's liquid enough for SOL to trade,” Sol Strategies CEO Leah Wald said, noting that bitcoin and ether ETFs were only approved by the SEC after CME futures began trading.

Conventional wisdom used to hold that futures were a needed prerequisite for crypto ETFs, but that math seemingly changed with the possibility that a Trump electoral victory would end Gary Gensler’s tenure as SEC chair. At least five firms have already filed for spot SOL ETFs over the past six months despite the lack of futures.

Still, a futures market likely wouldn’t hurt the spot SOL ETFs’ approval odds.

“Alright, I’ve seen enough…Registering formal prediction,” Nate Geraci, president of The ETF Store, wrote on X. “Spot solana ETFs will be approved in 2025.”

— Jack Kubinec

Ai16z, the team behind the Eliza framework for developing AI agents, is reportedly evaluating a tokenomics overhaul and exploring the launch of an L1 blockchain tailored for AI applications. According to contributors, the key challenge lies in addressing misaligned incentives with the $AI16z token, which currently lacks mechanisms to accrue value. Proposals under discussion include launching an AI-specific token launchpad, introducing staking mechanics and positioning $AI16z as the base currency for agent-to-agent interactions.

The proposed L1 would be open source with node incentives, while the launchpad would serve as a hub for deploying AI projects. Additional ideas include implementing a community-driven curation process to vet projects before launch, incentivizing developers through ecosystem funds and revenue-sharing models, and diversifying the DAO treasury with staking and selective liquidity provision.

As these proposals circulate, the community is debating the trade-offs and long-term viability of AI16z’s ambitions. @yashhsm called it “a unique bottoms-up crypto x ai $1.5b+ movement and an emerging ecosystem of its own.” Some, like @limoverseglobal, believe that AI16z’s layer-1 blockchain for AI applications could "redefine the crypto landscape." @worldwarjelly shared a similar enthusiasm, emphasizing collaboration: "Great to see AI16z pushing AI innovation forward — more players in the AI blockchain space means faster progress for everyone building the future."

@0xargumint offered a more critical take: "Oh great, AI16z wants to be the blockchain for AI. Because, you know, what we really need is another Layer-1 to 'revolutionize' AI. Can't wait for those AI agents to pump out buzzword salads at lightning speed." Others raised more practical questions, like @Cybergenm, who asked: "How do they plan to make their AI-specific Layer-1 blockchain stand out from the existing ones, especially in terms of what unique features or benefits it will offer to developers and users of AI agents?"

— Jeff Albus