Howdy!

Circle’s IPO has been remarkable. However, my quant (Forward Guidance host Felix Jauvin) said the price feels a bit rich, so I am remaining sidelined for now.

Today, we’ve got a stablecoin update in Solana land, Solana app revenue growth, and Jito’s faster auction times:

Solana stablecoin supply dip led by $1.8B USDC outflow 

Solana’s real economic value, app revenue, and DEX volumes were all up on the order of 20-30% in May, but one noteworthy figure didn’t keep pace: stablecoin supply.

Today, there are 15% fewer stablecoins on Solana than a month ago, per Blockworks Research data. Stablecoins are often an important source of liquidity for doing things like swapping in and out of SOL, although Solana’s stablecoin dip comes after the gray swan that was Donald Trump’s memecoin.

Solana’s stablecoin supply doubled essentially overnight when Donald Trump’s memecoin was paired with USDC, meaning investors essentially had to buy TRUMP with Circle’s stablecoin. Interestingly, the fresh stablecoin supply didn’t evaporate when TRUMP investors flocked for the exits, and it even hit a fresh all-time high in April when the presidential memecoin was far from its initial highs.

So given that context, some in Solana find the decline in stablecoin supply unconcerning.

“[Y]ea this chart looks a lot better than the SOL price chart lol,” Lulo co-founder Jesse Brauner said when I asked him about the stablecoin supply dip.

In any event, the stablecoin exodus has been led by USDC, which saw its market cap on Solana shrink by some $1.8 billion in May, according to Blockworks Research analyst Carlos Gonzalez Campo. Perena founder Anna Yuan speculated that the sudden drop in supply could be funds shorting the dollar in a topsy-turvy macro environment.

Non-USDC stables actually grew last month, notably including PayPal’s PYUSD, which saw its supply grow 48%.

PYUSD is one of several newer stablecoins vying for a piece of USDC’s 70% market share on Solana. It’s joined by USDG — a Paxos-issued stable that pledges to share revenue with its network partners, which include Robinhood and Kraken — and USX, a forthcoming basis-trade token that its developer company dubbed “Solana’s stablecoin.”

I have speculated previously that Solana may look to drive adoption on non-USDC stablecoins, since a significant portion of Circle’s revenue goes to Coinbase, which is possibly building Solana’s chief competitor in Base. On a permissionless network, however, disincentivizing usage of a product that users want is pretty difficult.

Gonzalez Campo noted how alternative stablecoin growth strategies have so far mainly revolved around shelling out incentives for users, but paying for adoption is ultimately unsustainable.

The analyst added he’d like to see a B2B model where upstart stablecoins like USDG share revenue with DeFi protocols to create a vested interest in supply growth.

— Jack Kubinec

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These memecoin startups sure do create a lot of revenue, and quickly:

This visualizer from SolanaFloor shows how Photon and Axiom both surpassed pump.fun in speed to the $100 million mark. 

These figures reinforce how valuable owning the user interface/frontend is. Trading bots aren’t the most technically complex products in the world, but they are quite good at value capture.

— Jack Kubinec

According to a Telegram channel post, Jito Labs has increased the frequency of Block Engine auctions from once every 200 milliseconds to every 50 milliseconds. The team says this update — a 4x speedup — has actually been live since April.

Jito’s Block Engine acts as an off-chain MEV auction house. Instead of sending transactions through a public mempool the way other chains do, searchers bundle them and bid in private auctions. The highest-paying bundles are passed directly to validators, who insert them into upcoming blocks. The goal is to cut consensus bloat while squeezing out the maximum value from transaction ordering.

Takeaway: This probably sounds like obscure infra-plumbing to any normies out there. But the gist is that blockspace on Solana is becoming something you can price and compete for in real-time. That means faster apps, fairer fees and smarter decisions about what gets into a block — and when.

When Lightspeed reached out to Jito Labs CEO Lucas Bruder for comment, he posted a sticker of Pepe the Frog dressed as a biblically accurate JD Vance along with the response: “IBRL”

— Jeffrey Albus

A message from Josh Deems, head of Americas at Figment: