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## Executive Summary Canadian regulators approved the first spot **Solana** (**SOL**) Exchange-Traded Funds (ETFs) with staking capabilities, while **Ethena Labs** launched an **Ethereum** rollup for **Real-World Asset (RWA)** tokenization, and **Galaxy Research** proposed a new **Solana** inflation governance model. ## The Event in Detail ### Canadian Spot Solana ETFs with Staking On April 16, four spot **Solana** ETFs began trading on the Toronto Stock Exchange, following approval from the Ontario Securities Commission (OSC). These products were launched by asset managers including **3iQ**, **Purpose**, **Evolve**, and **CI Financial**, which partnered with **Galaxy Asset Management**. Notably, these ETFs incorporate staking capabilities, offering an additional yield of 2-3.5% on top of **SOL**'s underlying returns. Up to 50% of the fund's assets are eligible for staking, with rewards typically distributed between shareholders and the fund manager. Management fees for these products range from 0.15% to 1% annually, with some initial waivers. Two months post-launch, the combined assets under management (AUM) across these ETFs have exceeded CAD 191 million. The **3iQ Solana Staking ETF (SOLQ)** dominates the market, capturing 87.6% of total assets, amounting to CAD 167.5 million, and 62.2% of total trading volume. This makes Canada the first country to offer regulated spot **SOL** ETFs with integrated staking, a feature long requested by investors for Proof-of-Stake protocols. ### Ethena Labs Introduces Converge Rollup **Ethena Labs**, in partnership with **Securitize**, announced "Converge," an **EVM**-compatible network scheduled for launch in Q2 2025. This high-performance **Ethereum** rollup aims to integrate traditional finance (TradFi) with decentralized finance (DeFi) by facilitating the tokenization of **Real-World Assets (RWAs)** and stablecoins. Converge features a hybrid architecture: it is permissionless for smart contract deployment and general use, yet integrates a permissioned layer to meet institutional compliance standards. The network is designed to inherit **Ethereum**'s security while offering high-performance execution, with 100ms block times and 100 MGas/s throughput, leveraging **Arbitrum**'s Orbit Stack, **Conduit G2 Sequencer**, and **Celestia** for data availability. Key partners supporting Converge include **Securitize**, a central player in **RWA** tokenization known for its collaboration with **BlackRock** on the **BUIDL** fund, which now manages over $2.5 billion in assets. **Ethena** intends to move its $6 billion **DeFi** ecosystem to Converge, focusing on settlement for both permissionless speculation and tokenized assets like its **USDe** and **USDtb** stablecoins. ### Galaxy's Solana Inflation Governance Proposal **Galaxy Research** submitted a proposal on April 17 for a new governance mechanism for the **Solana** community, termed Multiple Election Stake-Weight Aggregation (**MESA**). This model seeks to reform the network's inflation governance by introducing a market-driven process to refine the **SOL** emissions curve, moving away from binary YES/NO votes. The **MESA** system allows validators to select from a range of predetermined deflation rates, with the final outcome determined by a weighted average of these votes. The proposal aims to accelerate **Solana**'s trajectory towards its long-term target of a 1.5% terminal inflation rate. This initiative follows challenges in reaching consensus on previous proposals, such as **SIMD-228**, which failed to pass despite broad agreement on the need to reduce inflation. The current annualized inflation rate for **Solana** stands at 4.6%. **Solana Labs** co-founder Anatoly Yakovenko has suggested considering a "market-driven" approach to inflation, aligning with **Galaxy**'s proposal. ## Market Implications The launch of spot **Solana** ETFs with staking in Canada represents a significant development for institutional access to the digital asset market. The inclusion of staking yields distinguishes these products and could influence regulatory decisions in other jurisdictions, particularly the United States, where the absence of staking in **Ethereum** ETFs has been cited by **ARK Invest** CEO Cathie Wood as a factor in their initial "underwhelming" inflows. This indicates a growing investor preference for yield-generating crypto products within regulated structures. **Ethena**'s Converge rollup signifies a substantial step in the convergence of TradFi and DeFi. By providing compliant infrastructure for **RWA** tokenization, it aims to attract institutional capital into the **DeFi** ecosystem, potentially enhancing its credibility and expanding its utility beyond crypto-native applications. **Galaxy**'s **MESA** proposal for **Solana**'s inflation governance reflects the maturation of blockchain networks. A more nuanced and community-driven approach to token economics can improve network stability, enhance investor confidence, and optimize validator participation, positioning **SOL** as a more robust asset in the long term. These developments collectively underscore a trend towards increased institutional engagement and sophisticated financial product offerings within the broader Web3 ecosystem. ## Expert Commentary **ARK Invest** CEO Cathie Wood noted that the initial inflows into spot **Ethereum** ETFs were "underwhelming," partly due to the absence of staking rewards, underscoring the significance of this feature in the newly launched Canadian **Solana** ETFs. **Helius Labs** CEO Mert Mumtaz commented that previous governance votes on **Solana** highlighted the need for more effective governance tools. This sentiment is echoed by **Solana Labs** co-founder Anatoly Yakovenko, who suggested that the community consider a "market-driven" approach to inflation policy. ## Broader Context These events signal a continued evolution in the digital asset landscape, characterized by the increasing integration of traditional financial structures with decentralized technologies. The introduction of regulated, yield-bearing crypto investment vehicles and dedicated institutional-grade infrastructure for **Real-World Asset** tokenization reflects a concerted effort to bridge the gap between TradFi and DeFi. Concurrently, advancements in on-chain governance mechanisms, such as **Galaxy**'s **MESA** proposal for **Solana**, demonstrate a commitment to robust and adaptable network economics. These trends are poised to attract broader institutional capital, enhance market maturity, and further define the role of digital assets within the global financial system.
## Executive Summary The cryptocurrency market faces a pivotal week marked by the distribution of $1.6 billion to FTX creditors, the mainnet launch of Bitcoin (BTC) staking on Starknet, and critical regulatory discussions in the United States. Concurrently, several major token unlocks, including **SUI** and **EigenLayer**, are poised to introduce significant supply to the market. These developments collectively contribute to an environment of anticipated market volatility and strategic re-evaluation within the Web3 ecosystem. ## The Event in Detail ### FTX Creditor Distributions The FTX bankruptcy estate is initiating its third major payout, distributing approximately $1.6 billion to creditors beginning September 30. This disbursement is part of an ongoing Chapter 11 reorganization process. Payout percentages range from 78% to 120% of original FTX account balances as of November 2022. Convenience class creditors, representing 99% of the creditor base, are slated to receive approximately 120% of their original balances. Other classes, including Dotcom customer entitlement claims (Class 5A), U.S. customer entitlement claims (Class 5B), general unsecured claims (Class 6A), and digital asset loan claims (Class 6B), will see cumulative distributions of 78%, 95%, and 85% respectively. The estate has recovered over $15 billion, with total repayments exceeding $7.8 billion to date, leveraging cash reserves, clawbacks, and asset sales such as Sam Bankman-Fried's stakes and significant token holdings like **Solana** and **SUI**. Eligible creditors will receive funds through selected providers including **BitGo**, **Kraken**, or **Payoneer**. ### Starknet's BTC Staking Integration Starknet is rolling out a significant upgrade to launch Bitcoin (BTC) staking on its mainnet on September 30. This initiative allows Bitcoin holders to participate in Starknet's consensus mechanism, with BTC staking weight set at 0.25, accounting for 25% of the total consensus power. **STRK** will cover the remaining 75%. Initially, the system supports wrapped **BTC** derivatives such as **WBTC**, **LBTC**, **tBTC**, and **SolvBTC**, with future plans to expand through governance. The staking release period has been reduced from 21 days to 7 days for both BTC and **STRK** stakers. This move aims to convert Bitcoin's status as a passive store-of-value into an active, yield-generating asset, potentially boosting Starknet's Total Value Locked (TVL) and enhancing **STRK** utility. ### Key Regulatory Developments The week includes key regulatory events in the United States. The **SEC** and **CFTC** are scheduled to host a joint roundtable on shared priorities at 1:00 PM EST. Additionally, the U.S. Senate Finance Committee will hold a hearing on digital asset taxation at 10:00 AM EST on October 1. This hearing is expected to address how existing tax laws apply to cryptocurrencies and evaluate the need for new legislation, potentially building on recommendations for digital assets to be recognized as a separate asset class. These discussions occur amidst a looming September 30 deadline for government funding, which could lead to a shutdown and potentially postpone the Senate hearing. ### Lido DAO V3 Upgrade **Lido DAO** is advancing its **V3 Protocol** upgrade, which introduces **stVaults**. This new primitive enables staking through user-defined validator setups, offering optional **stETH** liquidity. **stVaults** are non-custodial smart contracts that delegate **ETH** to chosen node operators while maintaining withdrawal credential control. Stakers can define parameters such as fees, Maximal Extractable Value (MEV), and custody options. The upgrade aims to increase flexibility and decentralization in Ethereum staking, complementing the existing **Core Pool** model that continues to offer a 1:1 **ETH** to **stETH** ratio. A Snapshot vote related to the **stVaults Committee** is ongoing until September 29, 2025. ### Upcoming Token Unlocks Significant token unlocks are scheduled for October 1, potentially increasing market supply and volatility. **SUI** is set to release 44 million tokens, representing 1.23% of its circulating supply, valued at approximately $138 million. Concurrently, **EigenLayer** will unlock 38.82 million **EIGEN** tokens, which constitutes 13.77% of its circulating supply, valued at approximately $62.59 million. Other tokens, including **Ena** and **Immutable**, are also slated for unlocks. ## Market Implications The convergence of these events suggests an environment of heightened market sensitivity. The substantial **FTX** creditor payout, while resolving historical liabilities, introduces a considerable sum of newly liquid capital into the market, which could result in selling pressure if recipients opt to convert their reimbursements into fiat or alternative assets. Starknet's **BTC** staking initiative represents a strategic move to integrate Bitcoin's liquidity into the Layer-2 ecosystem, potentially enhancing its TVL and network utility, thus positioning it more competitively against rivals like Babylon. However, its capped consensus weight at 25% ensures **STRK** maintains primary network security. Regulatory discussions by the **SEC**, **CFTC**, and the Senate Finance Committee could provide much-needed clarity on digital asset classification and taxation, or conversely, introduce further uncertainty depending on their outcomes. The potential for a government shutdown adds an unpredictable variable to the regulatory timeline. Finally, the significant unlocks of **SUI** and **EigenLayer** tokens are expected to dilute existing supply, placing downward pressure on prices for these specific assets, as has been observed with similar large-scale distributions in the past. ## Broader Context These developments reflect a maturing, albeit still volatile, cryptocurrency landscape. The **FTX** payouts underscore the arduous process of recovering from major exchange failures, while also demonstrating the increasing capacity of bankruptcy estates to navigate complex digital asset recoveries. Starknet's foray into **BTC** staking highlights a broader trend within the Web3 ecosystem to leverage Bitcoin's substantial market capitalization for enhanced network security and DeFi utility across various Layer-2 solutions. This innovation also signals a strategic competitive differentiator, with Starknet aiming to integrate Bitcoin into a composable ZK-rollup environment, unlike some competitors focused on non-custodial native **BTC** staking. Regulatory dialogues are critical for fostering institutional adoption and providing a stable operating environment for crypto businesses in the U.S., with the outcomes of taxation hearings potentially influencing future investment and development. The ongoing **Lido V3** upgrade exemplifies the continuous innovation in decentralized finance, particularly in liquid staking, aiming to offer greater flexibility and user control over staked assets while maintaining protocol robustness. The pattern of large token unlocks remains a recurring feature of the market, necessitating continuous monitoring by investors to assess supply-side dynamics.
## Executive Summary The Digital Asset Treasury (DAT) model, which involves public companies leveraging equity financing to accumulate significant digital asset reserves, has rapidly expanded across various cryptocurrencies. This strategy, often described as a "wealth flywheel," has driven substantial capital inflows into assets like **Bitcoin (BTC)**, **Ethereum (ETH)**, and **Solana (SOL)**. However, the model is now confronting heightened regulatory scrutiny, exemplified by new **Nasdaq** rules, and inherent market risks, including the potential for significant stock price corrections among DAT-centric firms. ## The Event in Detail The **Digital Asset Treasury (DAT)** model centers on publicly traded companies raising capital through equity or bond financing and subsequently converting these funds into major crypto assets. This creates a "wealth flywheel": as token prices appreciate, the company's book value increases, often leading to a boosted stock price and enhanced refinancing capabilities. This allows for further capital raises and additional crypto asset purchases. The trend originated with **Bitcoin** treasuries, notably pioneered by **MicroStrategy (now Strategy)**, which has amassed a substantial **BTC** holding. By mid-2025, average corporate **Bitcoin** purchases by companies other than Strategy reached 343 coins per transaction. The model has since expanded to **Ethereum** treasuries, with companies like **BitMine Immersion Technologies** holding over 2.15 million **ETH**, and **Solana** treasuries, exemplified by **Forward Industries** with 6.82 million **SOL**. Beyond passive holding, some DAT companies are engaging in active management of their digital assets. **Ethereum** treasuries, in particular, are utilizing staking and **Decentralized Finance (DeFi)** lending protocols to generate yields of 3-5% on their **ETH** holdings. Platforms such as **Lido** and **Coinbase** are used to deploy billions of dollars in **ETH**, generating reliable returns while maintaining liquidity through liquid staking. This active approach positions **ETH** as a yield-bearing asset for corporate treasury management. ## Market Implications Recent developments signal a turning point for the DAT model. **Nasdaq** announced new rules, effective September 2025, mandating shareholder approval for public companies using new share issuance to fund cryptocurrency purchases. This regulatory change aims to enhance investor control and accountability, potentially slowing the rapid expansion previously seen by firms that could quickly issue shares for crypto acquisitions. One significant risk factor emerging is the **Private Investment in Public Equity (PIPE)** deal structure. Companies that have raised capital through **PIPE** deals, such as **Kindly MD (NAKA)**, have experienced severe stock price declines as lock-up periods expire. **Kindly MD** saw its stock crash 97% to $1.16, near its **PIPE** offering price of $1.12, after previously surging following its **Bitcoin** treasury announcement. Analytics firm **CryptoQuant** warns that other **PIPE**-funded companies could face up to 50% stock crashes due to this "PIPE price gravity," as investors sell shares to realize profits. For instance, **Strive Inc. (ASST)**, despite holding $476 million in **Bitcoin** against a $378 million market value, saw its stock drop 78%. The market-to-net-asset value (mNAV) of DAT companies is also a growing concern. Research by **K33** indicates that one in four public **Bitcoin** treasuries now trade below their net asset value, with the average **NAV** multiple falling from 3.76 in April to 2.8. This indicates investors are valuing these companies less relative to their crypto holdings. A declining **mNAV**, especially below a 1-to-1 ratio, can hinder companies' ability to use assets as collateral, potentially forcing asset sales. Furthermore, the high leverage employed by many DATs increases their vulnerability. In severe market downturns, coordinated selling by DATs could create negative feedback loops, exacerbating price declines across the broader crypto market. **Ethereum** is particularly exposed, with DATs holding over 4.1 million **ETH**, representing approximately 3.4% of its circulating supply. A severe scenario involving 30-50% stock discounts for **ETH**-holding DATs could see **Ethereum** prices fall to the $2,500-$3,000 range. ## Expert Commentary Experts widely discuss the sustainability and risks of the **Digital Asset Treasury** model. The "wealth flywheel" concept has been a key driver, attracting secondary market funds and leading to substantial growth in corporate crypto holdings. However, analysts are increasingly comparing the rapid expansion of crypto treasury companies to the dot-com bubble of the 2000s, cautioning that most may fail and potentially trigger a wider bear market. **Paul Frambot**, CEO and co-founder of **Morpho**, emphasized that for institutions to adopt **ETH** treasuries at scale, they require the same credit and liquidity safeguards found in traditional finance. **Mati Greenspan**, CEO of **Quantum Economics**, highlighted that liquid staking "captures the true magic of internet money and delivers it to asset managers on a silver platter," allowing institutional funds to maintain liquidity while their **Ethereum** grows in value. However, **Standard Chartered Bank** warns that a falling **mNAV** could force companies into asset sales, a move that would increase market instability and potentially lead to a shake-up within the DAT sector, with only larger firms like **Strategy** and **BitMine Immersion** likely to endure. **CryptoQuant**'s analysis specifically points to "PIPE price gravity" as a significant threat, demonstrating how the expiration of lock-up periods for private investors can lead to dramatic stock price corrections. This analytical perspective underscores the importance of scrutinizing the financing mechanisms underlying DAT strategies. ## Broader Context The DAT model represents a significant bridge between traditional finance and the crypto ecosystem, potentially fostering broader institutional adoption and maturation of the digital asset market. The emergence of a "crypto asset concept stock" sector within traditional markets is a notable long-term implication. Companies like **MicroStrategy** have set a precedent, with their continuous financing and token purchases becoming a blueprint for others. However, the regulatory landscape is rapidly evolving. The **Nasdaq** rules, alongside broader U.S. regulatory shifts, indicate a move towards greater accountability and reduced speculative practices. While these reforms may introduce friction and increase compliance costs, slowing the pace of capital deployment, they are also seen as vital for ensuring market integrity and protecting investors. The shift necessitates that companies move from purely speculative issuance to value-driven models that balance innovation with rigorous compliance. Ultimately, the future of the DAT ecosystem will likely see consolidation, with firms demonstrating weak fundamentals or excessive leverage potentially facing failure, while those with robust strategies and adherence to regulatory frameworks are positioned for long-term growth and sustained market integration.
## Executive Summary Ethena Labs is significantly expanding its ecosystem beyond its **USDe synthetic dollar**, which has rapidly ascended to become a top DeFi revenue generator. The company is developing its own Layer 2 blockchain, **Converge**, in partnership with **Securitize**, alongside the introduction of **USDtb**, a new stablecoin designed for compliance with the U.S. **GENIUS Act**. This multi-faceted expansion aims to bridge traditional finance (TradFi) with decentralized finance (DeFi) by offering institutional-grade infrastructure and regulated financial products, while USDe's market capitalization has grown to over $14 billion. ## The Event in Detail **USDe**, Ethena's synthetic dollar, has seen its market capitalization exceed $14 billion, marking a 21% increase in circulating supply over the past month. This growth positions USDe as the third-largest stablecoin by market capitalization, behind **Tether (USDT)** and **USD Coin (USDC)**. Unlike traditional fiat-backed tokens, USDe is collateralized by crypto assets and maintains its peg through a delta-neutral hedging strategy utilizing perpetual futures markets and spot trading. Ethena Labs recently partnered with **Flowdesk** to enhance liquidity and access for its stablecoin products. In a strategic move to attract institutional capital, Ethena Labs, in collaboration with **Securitize**, is developing **Converge**, a high-performance EVM-compatible Layer 2 blockchain. Converge is designed for institutional DeFi accessibility and compliant settlement, aiming to launch its mainnet in Q2 2025. Key technical specifications include a target 100ms block time, scaling to 50ms by Q4 2025, and throughput up to 1Gigagas/s, leveraging **Arbitrum's Rollup** technology and **Celestia's data availability layer**. Converge will utilize USDe and USDtb for gas fees, reducing volatility-related uncertainty in transaction costs. The network will feature a permissioned Proof-of-Stake (PoS) validator network (CVN) requiring KYC/KYB compliance, secured by **ENA** token staking. Further reinforcing its commitment to regulatory alignment, Ethena Labs has partnered with **Anchorage Digital** to launch **USDtb**. This stablecoin is explicitly designed to comply with the **GENIUS Act**, which was enacted in July 2025. The GENIUS Act mandates 1:1 reserves, AML/KYC procedures, and exposes issuers to supervision by the Office of the Comptroller of the Currency (OCC) and the Federal Reserve. USDtb will be backed by low-risk reserves such as cash and U.S. Treasuries, with a planned launch under U.S. regulation by the end of Q3 2025. This initiative represents a significant step towards establishing a regulated standard for U.S. stablecoins. ## Market Implications Ethena's ecosystem expansion carries substantial market implications. USDe's model tokenizes a delta-neutral carry trade, generating yield from **ETH** staking rewards and derivatives market funding rates. This positions USDe as a significant "crypto-native reserve asset." However, the strategy is not without risks. **Chaos Labs** has flagged liquidity risks associated with the rehypothecation of $4.7 billion of USDe's reserves on **Aave**. The report highlights that Aave's $6.4 billion Ethena-linked exposure could trigger redemptions if funding rates turn negative, potentially leading to cascading liquidations or de-pegging events for USDe. The **Converge Layer 2** aims to attract institutional adoption for tokenized assets, fostering a bridge between TradFi and DeFi. Its permissioned validator model and KYC/KYB requirements address stringent institutional demands for security and compliance. However, this design also introduces centralization concerns for some within the crypto community and creates dependency on external technical stacks like Arbitrum and Celestia. The success of Converge hinges on its ability to align with evolving regulatory frameworks and foster robust ecosystem growth. The introduction of **USDtb** under the **GENIUS Act** framework is a pivotal development for the U.S. stablecoin market. While the GENIUS Act bans yield on regulated stablecoins, it provides clear regulatory clarity that can accelerate institutional participation. This regulatory landscape could indirectly boost USDe's appeal by differentiating its yield-bearing nature from regulated non-yielding alternatives. The partnership with federally regulated entities like Anchorage Digital allows Ethena to access traditional financial rails, potentially expanding the reach of its products to a broader institutional investor base. ## Expert Commentary Industry experts acknowledge the dual nature of Ethena's trajectory. **OAK Research** characterizes the market sentiment as "Bullish to Highly Volatile," noting strong growth potential alongside inherent risks from leveraged strategies and nascent Layer 2s. Nathan McCauley, CEO and co-founder of Anchorage Digital, emphasized that the passage of the GENIUS Act provides "the regulatory clarity that enables federally regulated institutions like Anchorage Digital Bank to fully participate in the stablecoin ecosystem." Guy Young, CEO of Ethena Labs, stated that "GENIUS compliance will empower our partners and holders to confidently and significantly expand USDtb's use," underscoring the strategic importance of regulatory adherence for scalability. Franklin Templeton CEO Jenny Johnson has also previously highlighted that a clear regulatory framework will promote the integration of TradFi and DeFi, aligning with Converge's design principles. ## Broader Context The Ethena ecosystem is attracting a wide array of DeFi protocols building on its primitives and offering incentives to **ENA** stakers. These include **Ethereal, Strata, Terminal, Derive Protocol, Echelon, InfiniFi, Aave, Pendle, Contango, Plasma**, and **Hyperliquid**. Staked ENA (**sENA**) is designed to accrue value similar to the **BNB** token model, with ecosystem applications allocating portions of their token supply to sENA holders. The integration of generalized restaking pools with **Symbiotic** for staked **$ENA** aims to provide economic security for cross-chain transfers of USDe via **LayerZero**. This broad integration positions Ethena to become a foundational layer for both institutional and retail DeFi. The **Converge L2** has the potential to attract substantial total value locked (TVL) and developer activity, fostering new use cases and financial products. However, the complex "looping" strategies and deep integrations, while driving adoption, also amplify systemic risks if market conditions shift rapidly. Ethena's long-term stability and success will depend on its ability to manage these risks, particularly the reliance on sustained derivatives yields and regulatory flexibility, while navigating the inherent volatility of the crypto market.