Howdy!

I have seen quite a bit of crime on my X timeline today. It’s funny to see some of the crypto world realizing regulatory clarity does not equate to legalized insider trading.

Today, we’ve got SOL unlocks, the shrinking GSOL premium, and Jito’s beef with Paladin.

SOL investors shrug off unlocks

Solana watchers will hope 2025 brings some of those fabled bullish unlocks.

If you search for “SOL unlocks” on X, you’ll find a cascade of warnings that the token’s circulating supply is set to greatly increase in 2025 alongside grainy screenshots of an unsourced spreadsheet showing big unlock figures. While these unlocks are real, industry watchers I spoke to didn’t seem too concerned that the newly-sellable tokens — which account for a small percentage of the overall supply — will add much downward pressure to the asset.

In Solana’s early days, FTX purchased a ton of SOL tokens that came with yearslong lock-ups. After the exchange went bankrupt, the FTX estate sold off a number of still-locked tokens to investors at a significant discount to the market price. The biggest FTX estate Solana unlock is slated for March 1, when $2.58 billion will come available, according to data from Messari. That represents a little more than 2% of Solana’s current market capitalization. 97.5% of SOL is unlocked in total.

“The FTX estate sale of Solana tokens … attracted many new investors to SOL. We will soon learn how many of them stick around for the long term,” VanEck head of digital assets research Matthew Sigel said.

Matt Maximo, an investor also at VanEck, said the buyers of locked SOL tokens he knew were looking for 10x returns and had some appetite to hold. He doubts too many of the locked SOL tokens will hit the market. 

A second potential source of SOL selling could come from the Grayscale Solana Trust, an investment vehicle for SOL. Private placement investors were able buy GSOL shares at the net asset value of the trust, which represents a discount against the market value of the shares. These investors agree to a one year lockup before they can sell their shares, and a number of those private placement shares were sold a year ago this week, per SEC filings. 

When private placement shares unlock, investors can sell those shares to collect their premium, and this sell pressure has already closed some of the gap between GSOL’s market value and NAV.

GSOL only has $125 million in assets under management compared to a $112 billion market cap for SOL, so the GSOL premium may disappear, but it likely won’t show up too much in the asset’s overall price movement.

“None of the [Solana] price action we’re seeing has to do with Grayscale’s instrument regarding SOL,” Jlabs Digital founding partner Ben Lilly said today on a crypto trading podcast, adding that the unlocked shares represent a small fraction of the total shares. “It is very small, like a drop in the bucket in terms of the size of the market.”

— Jack Kubinec

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As you can see, the GSOL premium has compressed quite a bit in recent weeks:

GSOL was trading at a 7x premium compared to its net asset value at times over the summer, presumably as euphoria in the market left investors wanting to get exposure to SOL.

That gap is much narrower now, and the GSOL unlocks this week appear to already have driven the premium from 1.6x on Thursday to roughly 1.45x yesterday.

— Jack Kubinec

Where's the beef, you ask? The Solana validator space, apparently. Lucas Bruder a.k.a. Buffalu, co-founder of Jito Labs, recently criticized Paladin’s architecture on X and in an accompanying Substack post. He argued that Paladin’s approach reduces validator and staker revenue, fragments transaction flows, and lacks meaningful technical innovation. Paladin’s defenders, including Uri Klarman (CEO of bloXroute and originator of Paladin), fired back, accusing Jito of monopolizing order flow and prioritizing bundles over ecosystem fairness.

At the heart of the debate is the question of how MEV infrastructure should function. Jito-Solana relies on bundle prioritization, leveraging tips for higher validator and staker revenue. Paladin’s new token-gated model, meanwhile, promises sandwich-free transactions and prioritization based on $PAL holdings rather than bundles. Critics argue Paladin fragments transaction flow without adding real innovation, while supporters claim it democratizes validator incentives and reduces predatory practices.

Takeaway: The future of Solana’s MEV isn’t about picking sides — it’s about finding what works. Jito’s bundle system has proven effective at maximizing rewards, while Paladin’s model could push for fairer practices. Whether one dominates or both coexist, the real win lies in driving innovation that strengthens the ecosystem as a whole.

— Jeffrey Albus

A message from Tom Wan, head of data at Entropy Advisors: