_{Brought to you by:}

Howdy!

A week from today, I’ll be in beautiful Salt Lake City looking at the big temple helping get ready for Permissionless, Blockworks’ yearly conference.

The Solana content is going to be top notch, and I’d love to meet some of our Lightspeed readers in person. Register now, because ticket prices are going up at midnight!

Startups are building for Solana restaking — before it’s even live

Solana restaking has long made intuitive sense: Take Ethereum’s most successful narrative from the past year and apply it to the blockchain making the strongest attempt at grabbing Ethereum’s mantle. 

For some crypto startups, it’s an intuition worth staking their business on. Multiple startups have already begun developing tools for Solana restaking, essentially betting that the technology will be implemented — and further betting there will be demand for it once it’s available.

Restaking is the EigenLayer-popularized concept of taking staked tokens used to secure blockchains and staking them a second time to secure another layer of infrastructure and services (which are sometimes called AVSs, though Jito calls them NCNs).

On Solana so far, there are two main competitors: Jito and Solayer. Jito Restaking has open-sourced its code, and I most recently heard it was hoping to deploy the platform by the end of the year (although, obviously, these things are subject to change). Solayer is live, but restaked tokens are currently limited to so-called endogenous AVSs, which don’t enable slashing and are mostly focused on providing the protocols better bandwidth in the form of stake-weighted quality of service (SWQoS).

Still, there are at least two businesses building solely atop these platforms, meaning their success hinges on the success of protocols that are yet to fully launch, let alone prove robust demand.

Both appear to have started building full Solana restaking platforms. Cambrian came to light in February of this year promising a “modular security layer for Solana” (restaking is sometimes referred to as modular security because it lets a protocol swap in different security sources). It added to this vision in June, promising “orchestration for different services” on top of other Solana restaking protocols. There’s not much else out there about the project, but it appears to be leaning more into the “orchestration” side of things lately.

There’s also Fragmetric, which is planning to launch a liquid restaking token (LRT) on top of Jito Restaking. The LRT plans to solve the problem of how AVSs or NCNs can distribute rewards to restakers without encouraging tokens to be dumped onto the market. It hopes to accomplish this with transfer hooks, a feature of Solana’s SPL token extensions that let specific actions happen when a token is transferred (in this case, updating the balance in Fragmetric’s “rewards module”).

Sang, a co-founder of Fragmetric, told me they were building a Solana restaking protocol themselves, but it felt like a “disaster” when they learned Jito was launching a restaking protocol because of its size and developer quality. But still being bullish on the prospects for Solana restaking, Fragmetric pivoted to building on Jito.

“Many people in the Solana ecosystem hate restaking,” Sang told me, because it has been used mainly to focus on infrastructure on EigenLayer, which hasn’t ingratiated itself much with the Solana community. But, Sang added, Solana restaking is more focused more on user-facing products and services compared to EigenLayer, pointing to Jito’s StakeNet and Squads as examples. 

FragSOL is meant to launch in two weeks. Would it be another such disaster for Fragmetric if Solana restaking doesn’t manage to take off?

“Yeah, that’s right,” Sang said.

— Jack Kubinec

Permissionless has the galaxy brain content you read the Lightspeed newsletter for, but IRL. 

Catch the brightest minds in the Solana ecosystem as they discuss the challenges and future of blockbuilding in Solana.

After weeks of decline, Solana’s TEV suddenly spiked over the past few days. Call it the Moo Deng bump?

TEV, or total economic value, can be thought of as a blockchain's income. The metric dipped pretty consistently since early August, alongside the price of SOL.

But amid a brief resurgence in memecoin trading over the past few days, Solana’s TEV hit levels not seen since Aug. 8, topping out at over $3.5 million on Friday. Memecoins continue to be a large apparent driver of Solana’s chain income. For more on that round and wet baby hippo and its memecoin, read on below.

— Jack Kubinec

Enter MOODENG: a Solana-based memecoin inspired by the impossibly cute baby pygmy hippo from Thailand. Launched on Pump.fun some 20 days ago, MOODENG has generated $47 million in trading volume in the last 24 hours alone, according to Gecko Terminal. The Khao Kheow Open Zoo has leaned into the madness, live-streaming the hippo 24/7 for Moo Deng’s growing fanbase, who can’t get enough of her "bouncy pork" cheeks.

Bull Take:

What do you mean "irrational exuberance"? This is exactly the type of fun Solana needs to shake off the bear market blues. MOODENG’s meteoric rise is proof that there’s always room for a good meme to pump one's bags.

According to @Shitcoin_Surfer, "Love it or hate it, MOODENG was exactly what the market needed. It’s bringing life back into the trenches, and the money is flowing again." While @JaredRonis speculated on the coin's potential reach, "Moodeng is the first time I've seen the same meme plastered all over both my IG feed and here. This might just be the first #crypto native to normie crossover hit."

Bear Take:

Sure, Moo Deng is cute, but is she worth a $190 million market cap? While the market is enjoying the ride now, the liquidity tells a different story. With only $3.4 million of liquidity backing a $190 million market cap, this could unravel fast.

Some, like @bubblyrene1, are already skeptical, asking, "Where can I short this peace of shit?" While @Cyril_Dziku warns, "As per usual, the scammers have hijacked the current zeitgeist and are exiting as we speak."

With such thin liquidity, any large sell-offs could cause the price to nosedive, and we all know what happens when the meme dies—the market moves on, and the latecomers get left holding the bag.

— Jeffrey Albus

A message from Sang, co-founder of Fragmetric: