Howdy!

I was almost late delivering the feature today because I — last to the party — discovered “Italian Brainrot” in the middle of troving for market insights. The internet is a dark place, and using X for professional research of any kind is ill-advised, even at the best of times.

Today we’ve got the meh market reaction to Solana’s staking ETF despite its surprisingly strong day-one volume, and an anti-Sybil validator initiative. Let’s dive in.

Midweek Markets: SOL dips despite ETF launch

Bad news first. Solana closed June at $155, which is down 1.2% month over month. That's not catastrophic, considering a broader altcoin slump, but SOL has underperformed BTC and HYPE for the second straight month.

Real economic value (REV) fell 48% in June, DEX volume dropped 35%, and Token Holder Net Income plunged 56% MoM, according to a recent update from Blockworks Research — though it's worth noting Solana still leads across all networks by these metrics.

On the upside, Solana processed over 2.1 billion successful transactions in June, setting a new record. App revenue hit $150 million, up from $133m in May, which was 35% of all application revenue across chains. The highest-earning apps (Pump and Axiom) pulled in over $76 million in June, driven by memecoins and leverage.

It's now Wednesday, and as promised, the REX-Osprey SOL Staking ETF is live. The price of SOL popped to $161 on the anticipatory lead-up but fell back toward $146 within a day. At the time of publication, SOL prices hover around $152. 

Pump flipped Raydium in DEX volume for the first time, closing June with a 32% share vs. Raydium's 26%. Trading-focused apps now account for nearly 90% of Solana's total application revenue. 

Meanwhile, xStocks — tokenized US equities — went live June 30. There are 11 listings so far (SPYx, TSLAx, MSTRx, etc.), with 40 more in the pipeline. Day-one volume cleared $1.3m.

Validator income is compressing fast. Jito tips dropped to 51% of total REV, and the validator set shrank by 25% due to Solana Foundation offboarding.

With FCFS and app-specific sequencing on the horizon, revenue for operators may decline further as latency supplants fees as the primary competitive advantage.

In June, Solana apps generated $2.40 in revenue for every $1 in REV, another all-time high. With the pump.fun ICO confirmed (timeline still TBD), don't be surprised if that trend accelerates.

— Jeffrey Albus

P.S. Fill out our short audience survey and help us build a better Lightspeed. Thank you!

Top 1%

That’s where Bloomberg Intelligence’s Eric Balchunas said he would rank the first Solana ETF’s inflows among new ETF launches.

The staked SOL ETF being offered by REX Shares and Osprey Funds began trading today. SSK has already seen roughly $30 million in volume. I’d bet the traditional SOL ETF applicants, still waiting for the SEC’s approval, aren’t too happy to see this.

— Jack Kubinec

BlazeStake is offering additional stake to verified validators in its stake pool in a bid to limit Sybil attacks. 

Stake pools collect staked SOL and delegate it amongst a group of participating validators. Users who add funds to these pools then receive an LST. Jito is the largest stake pool, and BlazeStake is eighth-biggest.

These pools can suffer from Sybil attacks, where one validator pretends to be many others in order to gather more rewards, BlazeStake explained in an X thread. The group argues that even KYC checks — which the Solana Foundation Delegation Program uses — don’t work, as validators can have friends and family sign up on their behalf. 

BlazeStake asks each verified validator to explain how they’ve contributed to the Solana ecosystem, arguing that verifiable impact is harder to fake. 

This move is the latest from Solana validator organizations trying to disincentivize bad behavior, following similar moves from the Solana Foundation and Marinade. 

“[This] is great! [It’s] important validators are doing more than just operating the machines — they should be real stakeholders in the network and contributing wherever they can,” Kairos Research co-founder Ian Unsworth said. “[This] is another positive incentive for them to do so.”

— Jack Kubinec

A message from Nick Carpinito, analyst at Blockworks Research: