Howdy!

TMZ reports that the SEC closed its investigation into the “Hawk Tuah” girl Haliey Welch’s memecoin. It’s great to see regulatory overreach ending so that useful, important crypto builders can thrive.

Today, we’ve got Multicoin’s JTO valuation, negative net APY on Kamino, and an ICYMI for the week’s Solana news:

Multicoin estimates a 3x for Jito’s token

In 2023 and 2024, a number of Solana startups generated native tokens to reward users and let investors and early contributors book returns.

Much of the attention surrounding these tokens went to how lucrative they were for recipients of so-called airdrops — and actual utility took a backseat, especially with a US regulatory regime eager to classify tokens as securities. Now with a friendlier regulatory outlook and the airdrop flow being stemmed, some are looking to how these new native tokens can become valuable assets. 

One such example is early Solana investor Multicoin Capital, which recently published an asset report for JTO, the native token of its portfolio company Jito. Multicoin’s forward-looking base case priced JTO at $6.80, roughly three times its current price. I had the report’s author, Multicoin investment partner Shayon Sengupta, as a guest on the Lightspeed podcast this week to discuss his valuation further.

“If you assume Solana REV is going to increase and you assume that demand for priority blockspace is going to increase, Jito is going to be the direct beneficiary of that,” Sengupta said.

That’s likely true. 93% of the Solana network’s stake runs on the Jito-Solana client, which offers off-chain blockspace auctions that maximize economic returns for validators and makes it easier for users to land transactions. Jito tips from these auctions made up around 56% of Solana’s total REV in February. That’s not to mention Jito offering Solana’s largest LST in JitoSOL — a product it seems to be angling to have included in Solana staking ETFs.

What I’m less convinced of is the concept that Jito’s success as a company will trickle down to the JTO token. JTO’s price-to-earnings ratio swung wildly this year when Jito’s revenue greatly increased and its token price stayed roughly the same. That’s probably because there is currently no direct connection between Jito revenue and the JTO token. 

The Jito Foundation — which oversees Jito’s stake pool as well as JTO — takes in revenue, but if the foundation were to do things like distribute its revenue to token holders, JTO might start to look uncomfortably like a security. That’s likely part of why the Uniswap Foundation is still yet to distribute fee revenue to UNI holders. Sengupta hinted to me that this may change.

“Our general framing is that as capital markets mature, you end up in a stage where revenues are going to matter,” Sengupta said, vaguely citing “changing policy dynamics” as one potential reason why.

Donald Trump’s presidency has brought previously unheard of legal possibilities to the crypto industry. Can it make native tokens great again?

— Jack Kubinec

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Always fun to see some negative rates:

The USDG stablecoin net borrowing APY flipped negative on the Solana lending app Kamino Finance.

This is partly due to liquidity incentives, a popular means for driving investment on the DeFi app. The incentives being paid out by USDG and JTO are high enough that users are functionally getting paid to borrow USDG.

— Jack Kubinec

ICYMI — Stories you may have missed this week:

• Meteora now has a community-driven blacklist to block bad actors from receiving its $MET airdrops. Built with Bubblemaps and Rugcheck, the list is an open source and transparently verifiable way to ensure a fairer airdrop process. It's a rare proactive approach that should allow participants to defend against manipulation by flagging wallet addresses.

• Parsa has created a Range Perpetuals DEX, which lets traders speculate on price ranges instead of single price points. It's a neat concept that delivers continuous payouts within set bounds, offering a more intuitive, options-like structure without the complexities usually associated with traditional derivatives. Built for OG degens and newcomers alike, Parsa is opening the door to more accessible, flexible derivatives trading onchain.

• Zeus Network has launched Apollo — a permissionless Bitcoin exchange on Solana. At the same time, it also intro'd a new wrapped 1:1 Bitcoin asset that it's calling $zBTC. That is good news for anyone looking for BTC liquidity inside Solana's DeFi rails. It also strengthens Solana's position as a contender for Bitcoin-native apps. Zeus Network teased that users can expect more decentralized BTC projects soon. 

• Marinade Finance has a cool new staking rewards history tool that gives native stakers a way to track rewards for crypto tax reporting. It's a small but significant update that coincides with Marinade's deepening appeal to institutional users. Marinade Native is gaining traction, ETF interest is on the rise...tea leaves suggest that Marinade's open-source, bootstrapped ethos is on its way to making it the go-to staking provider for Solana's institutional era.

• Arcium, which is building an encrypted supercomputer on Solana, has joined Nvidia’s Inception Program to advance privacy-preserving AI. Fresh off acquiring Inpher and 30+ confidential computing patents, Arcium can now use Nvidia’s technical resources to motivate its quest for Private AI. In one fell swoop, Arcium may have just become the most adoption-ready stack for encrypted machine learning ahead of its public testnet.

— Jeffrey Albus

A message from Jesse Brauner, co-founder of Lulo: