Howdy!

The sudden discourse around Ethereum now trying to scale the L1 feels pretty directly Solana-inspired. Wild to see idols become rivals.

Today, we’ve got a market update, USD-EUR swaps, and Solana’s looming SIMDs:

Midweek Markets: $LAYER falls 55%

Earlier this week, we wrote that Solayer was about to begin its token unlocks.

We noted that this would mark the first real loosening of grip over Solayer’s tightly controlled float, and observed that while the token had surged 87% in a month, traders appeared to be bracing for volatility.

Well, SURPRISE! That volatility came early.

In the 48 hours that followed, $LAYER collapsed more than 55% from its all-time high, wiping out over $350 million in market cap. The selloff was sharp, disorderly and possibly — in the eyes of some — deliberate.

Back in March, onchain researcher Andrew 10 GWEI flagged a series of Solayer team-linked wallets that received large airdrop allocations, deposited funds to Binance and appeared to sell into the market well ahead of this week’s unlock. 

His analysis suggested that only 3.6% of the total token supply — rather than the 12% promised — was actually distributed through the Genesis Drop. He claimed at the time that over $28 million in tokens were routed through wallets tied to the team.

Though Blockworks was unable to directly verify these claims, they have contributed to speculation that the downturn was more of a coordinated exit. But whether orchestrated or not, the crash fed on itself. Thin order books, high leverage and looming dilution made for a classic cascade. The market structure Solayer relied on — thin float, heavy lockups and delayed investor cliffs — is the same playbook that powered dozens of outsized runs this cycle. But this can also be deeply unstable.

When a token trades with a high FDV and low float, price discovery becomes a function of narrative momentum, not actual demand depth. Early buyers are betting they can rotate out before gravity hits, and any deviation — a perceived exit, a mispriced unlock, a sharp funding flip — sparks the kindling.

Once that kind of volatility begins, there’s usually little structural support to stop it.

Zooming out, while Solayer unraveled, the Solana ecosystem posted one of its strongest months in a year. DEX volumes and REV bounced back. SOL outperformed both ETH and BTC in April.

Block space rose to 50 million CUs with 60 million on the way. SolFi and ZeroFi, two closed-source “prop AMMs,” now make up 20% of DEX volume. Stablecoin supply hit an all-time high of $12.6b. Solana’s price at the time of publication is $146.57.

The chain’s fundamentals continue to accelerate. So why then does one of its most high-performing new tokens seem to have imploded?

Maybe because Solayer wasn’t priced on fundamentals — it was priced on narrative. On mechanical scarcity. On the hope that a thin float, institutional heat and Solana tailwinds could suspend gravity. The future of Solana itself may be bright, but its token economy is still wild, still early, and still very much a game of timing.

— Jeffrey Albus

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People are trading a lot between dollars and euros on Solana these days:

Blockworks Research analyst Jacob Sharples pointed out the sudden jump on X this week. Much of that volume originated on Orca, Sharples added.

It’s unclear why exactly folks are swapping between dollar- and euro-pegged stables these days, but the dollar’s recent volatility could have something to do with it.

— Jack Kubinec

Something that’s flying under the radar at the moment is the number of upcoming Solana Improvement Documents, or SIMDs, that are set to upgrade the Solana protocol.

Blockworks Research’s Carlos Gonzalez Campo did a good job documenting these in a recent report: SIMD-256 proposes to raise Solana’s block limit from 50 million to 60 million compute units, which would raise the network’s bandwidth. Solana has said it will double block space this year from a starting point of 48 million CUs.

SIMD-257 would eliminate vote fees, which are small SOL-denominated fees validators pay when voting to bring the Solana network to consensus. This would eliminate a cost that’s especially burdensome on smaller validators, but it could also create network spam issues, Gonzalez Campo said.

SIMD-279 was a proposal from Galaxy Research that is a version of the left curve SIMD-228 I’ve written about previously. Basically, Solana’s disinflation curve would remain predictable, but validators could vote to accelerate the decay time.

SIMD-266 would replace Solana’s current SPL token standard with the p-token standard. Solana developer shop Anza reimplemented SPL into p-token for efficiency gains, potentially reducing CU consumption by 95%.

— Jack Kubinec

A message from Ryan Connor, head of research at Blockworks Research: