SOL Strategies CEO: We are not a microstrategy of Solana, but a real tech company.

Organized & Compiled: Deep Tide TechFlow Key Summary In this week's special program, we invite Leah Wald, who brings an exciting share from the DAS NY 2025现场. This episode will focus on the launch of the Solana futures ETF in 2025, deeply analyzing the strategy guide from SOL Strategies, and exploring Leah's unique insights on the current cryptocurrency market. In addition, we will discuss Solana's long-term vision and its latest industry dynamics. Highlights of insights.

In the early history of cryptocurrency, the largest holders were often individual investors.

The institutionalization of Solana is still in its early stages, and more discussions have just begun.

One of Solana's successes lies in its ability to engage in dialogue with various institutions, attracting them to consider running blockchain projects on its platform.

Comparing SOL Strategies to Microstrategy of Solana is actually an incomplete analogy.

A fairer approach is to establish a real technology company.

One thing I really like about the Solana community is that there are various different types of startups exploring innovation.

Like Bitcoin, it took a long time for it to establish itself as a "store of value." Solana and SOL itself are more speculative, so they also need time to find their direction.

Launch of Solana Futures ETF

Jack: We just saw the first Solana ETF in the US start trading. You are an expert in this area, and I would like to ask you about the performance of the volatility shares futures ETF on its first day. How was the trading volume? During this release process, what key points should people pay attention to?

Leah Wald:

This is very important. I think none of us anticipated that things would develop so quickly. This launch comes right after the release of the CME futures products, with a very fast approval speed, and it also introduces the A2X leverage mechanism.

I believe that the choice of Volatility Shares to launch futures products is a very wise strategy. The market performed very strongly on Monday, and in any case, this was a successful demonstration, showcasing the existence of the market and the success of trading. Especially for products with 2x leverage, this is undoubtedly a huge victory. From the perspective of institutional adoption and market efficiency, it is significant for the entire ecosystem.

As for trading volume, I believe there is still a lot of room for growth, but after all, this is just the first day. Many market participants typically do not enter on the first day, so it is more important to observe the performance three months later, including trading volume, market participation, and overall interest.

Jack:

If I remember correctly, when you were at Valkyrie, you launched a Bitcoin futures ETF. Could you share your experiences from that time? For example, how was the trading volume on the first day? When did you start seeing large-scale inflows of capital? Additionally, what lessons from the Bitcoin futures ETF experience do you think can be applied to the Solana futures ETF?

Leah Wald:

We launched the Bitcoin futures ETFs of Valkyrie and ProShares in October 2021. ProShares went live two days earlier than us, choosing to list on the New York Stock Exchange (NYSE), while we chose the Nasdaq (NASDAQ). ProShares' product had a trading volume exceeding $1 billion on its first day, while our first day's trading volume was around $50 million. Nevertheless, this is already a very good achievement, as it is the first Bitcoin ETF in the United States.

The process of launching a futures ETF is very complex, especially in terms of communication with market makers and ensuring the smooth operation of the entire futures trading ecosystem. Compared to spot ETFs, futures ETFs involve more participants, and due to their reliance on CME's paper trading, there is a certain separation from the underlying assets, thus requiring additional considerations in aspects such as tracking error.

Despite Bitcoin's larger AUM and trading volume, the market situation is indeed different. People have more preparation time. It seems that the SEC approved it just two days after the futures launch. So, volatility shares still have a chance to start marketing.

Jack:

How long do you think it will take to make a meaningful assessment of the trading volume for CME futures and volatility equity ETFs? After all, the trading volume on the first day is usually low, does it require a longer period of observation?

Leah Wald:

Many companies are unable to directly purchase futures products due to restrictions in their internal investment portfolios. Furthermore, the range of participants in futures trading is also relatively limited. Therefore, the performance on the first day often does not fully reflect the potential of the product.

I believe that at least three months are needed to observe the market performance of these ETFs, including changes in trading volume and participation levels. Generally speaking, trading institutions like those in Chicago are the main participants, and their behavior can significantly impact market performance. Therefore, a three to nine-month timeframe is a reasonable period to assess the success of these products.

Jack:

What do you think about the prospects of spot ETFs in 2025?

Leah Wald:

I believe this is a key moment worth anticipating. Historically, futures ETFs tend to launch before spot ETFs. Although we cannot predict with certainty, the launch of this futures ETF is undoubtedly a positive signal. Several companies have already submitted applications for spot ETFs, and their product operations are performing well. Therefore, I have an optimistic outlook on the prospects for spot ETFs in 2025.

Are institutions optimistic?

Jack:

Let’s talk more broadly about futures ETFs. We are currently at the DAS conference, which has an overall atmosphere more like a gathering of institutional investors. However, you and I have discussed before that many people, when talking about cryptocurrencies, often regard "institutions" as a unified whole.

I have two questions I would like to ask: First, have institutions started to enter Solana? Second, what does this mean for the market? Additionally, how should we define "institution"? Which ones are considered institutions, and which are not? Based on your current observations, in which areas or sub-markets is institutional capital most likely to enter Solana in the short term?

Leah Wald:

This is a very thought-provoking question. We usually classify ordinary users and institutional investors into two categories based on the size of their capital. However, in the history of cryptocurrency, the situation is not that simple. If we consider ordinary investors as individuals managing their own wealth, while institutions are organizations managing other people's capital, then these two represent different types of capital flow, rather than just differences in capital size. In fact, in the early history of cryptocurrency, the largest holders were often individual investors.

As Bitcoin is gradually being seen as a new store of value asset, the trend towards institutionalization is beginning to emerge. For example, financial giants like Blackrock and Fidelity are actively launching Bitcoin ETFs, marking a significant shift in the market. However, for other altcoins like Solana, the primary holders currently remain individual investors. Although these individuals are legally referred to as retail investors, their capital scale and market influence can actually rival that of institutional investors.

As for your second question, what does the entry of institutions mean for the market? Have they already engaged? For Solana, the current discussions are more focused on how institutions can participate in its ecosystem. We can see some signs, such as Franklin Templeton launching a blockchain-based fund and trying to operate on the Solana platform. Moreover, the launch of futures ETFs provides institutional investors with new tools, which may attract more capital into the Solana ecosystem. In the Bitcoin market, we have already seen how institutions are making significant asset allocations through forms like donation funds, pension plans, and sovereign wealth funds. With Solana also having similar investment tools, we may see more institutional participation.

However, overall, the institutionalization of Solana is still in the early stages, and more discussions have just begun.

The ultimate vision of Solana

Jack:

One potentially overlooked issue is the distinction between institutional purchases of SOL assets and institutions operating money market funds on the Solana platform. Compared to the on-chain NASDAQ that may be realized in the future, I believe the likelihood of pension funds purchasing SOL assets is obviously more practical.

Leah Wald:

Your viewpoint makes a lot of sense. It's indeed very interesting to observe the development paths of different projects. I believe one of the reasons for Solana's success is its ability to engage in dialogue with various institutions, attracting them to consider running blockchain projects on its platform. Solana has shown strong persuasiveness in this regard, as it possesses many significant advantages. However, how funds are allocated after entering the Solana ecosystem and which areas they flow into are important issues that need to be explored further. Fortunately, as we discussed two days ago, these topics have started to gain more attention.

Jack:

You mentioned the difference between institutions and regular investors before, but in reality, the scale of funds is not the main dividing line between the two, as there are also some so-called "ordinary whales" (referring to individual investors holding a large amount of assets). Does your SOL Strategies often interact with individuals like Joe who hold a significant amount of Solana for the long term? After all, he may be managing a considerable amount of assets.

Leah Wald:

Indeed, it is an interesting phenomenon. One of my jobs is to communicate with investors, sharing our philosophy and story with them. For investors like Joe, he may be very satisfied with holding SOL for the long term, just like many Bitcoin investors who are happy to hold their Bitcoin and may discuss the importance of ETFs with us. This choice in itself is good, as investors should have a diversified range of investment options.

Currently, we are the only option providing retail investors with stock investment exposure through IRA or similar accounts. This is also a noteworthy topic in the development of Bitcoin ETFs. However, I believe that investors like Joe may prefer to directly hold and stake his Solana assets rather than immediately purchasing our stocks. Unless our stocks become more attractive to them, or they start to engage more actively in stock trading, this shift may take time.

Laine's acquisition strategy

Jack:

Speaking of your validators, I recently saw an interesting piece of news about SOL Strategies. You acquired the Laine Solana validator, and I remember his name is Michael, who also operates stakewiz.com. This acquisition is quite special. I would like to know how you initiated the conversation with him? Why did you choose to acquire this specific validator and also have Michael serve as the Chief Operating Officer? Can you share the story behind this?

Leah Wald:

To be frank, this acquisition is largely due to Michael's personal capabilities. He is an outstanding and intelligent businessman, and also possesses an excellent engineering background; talents like him are indeed very rare. Therefore, discussing the acquisition of Laine validators, stakewiz.com, and other related assets with him completely aligns with our strategic logic for achieving external expansion in the next phase. This acquisition increases our shares to approximately 3.3 million.

Jack:

This is almost equivalent to doubling your shares, and it seems to have been completed in a short period of time.

Leah Wald:

That's right, it really is. Michael's impact after joining has been significant; he is widely respected in the Solana community, not only because of his abilities and intelligence but also due to his sincere commitment to the community. You can also see this focus on the community in the work of our Chief Technology Officer. For instance, we recently supported the SIMD02,2,8 proposal, even though it doesn't fully align with our economic interests as validators, we still chose to support it because it is more beneficial for the overall development of the Solana network.

Our goal is to build a company that is deeply integrated with the Solana ecosystem, and in this way contribute to the long-term development of the Solana network. This is also one of the reasons why we acquired the Laine validator.

Is SOL Strategies Microstrategy of Solana?

Jack:

Has the development plan of SOL Strategies always been achieved through acquisitions? When I first heard about SOL Strategies, it was described as "Microstrategy of Solana." I originally thought you would follow Microstrategy's model by issuing debt to purchase a large amount of SOL, and possibly leveraging staking for additional returns, such as staking SOL on platforms like Jito or Helius. This is what I heard on the Lightspeed podcast. However, it seems that you have delved into the realm of validators, not only acquiring validators, but Max also frequently shares his views on SIMD proposals on Twitter. Meanwhile, Michael, as a well-known figure in the Solana validator community, has also joined your team. So, was this development direction planned from the beginning, or is it a strategy that has gradually formed over time?

Leah Wald:

Comparing SOL Strategies to Microstrategy of Solana is actually an incomplete analogy. In my view, the limitation of this model is that it simply plays the "net asset value (NAV) game," which is to enhance company value by accumulating assets, but that alone is not enough. I need to consider how to operate a real business while creating long-term value for the company's shareholders. If the market believes that we are merely waiting for SOL to appreciate, that would be unfair to the shareholders. I think a fairer approach is to build a real technology company.

Our strategy is to achieve growth in a slow but steady manner. Initially, we mainly rely on external acquisitions (inorganic growth) to expand our business, such as acquiring validators and related assets. Over time, we will gradually shift towards relying on our own capabilities for organic growth. Our ultimate goal is to become the infrastructure company for Solana.

In this process, we are indeed accumulating as much SOL as possible and staking it to our validator nodes. But this is just part of the overall strategy, similar to how Bitcoin miners increase the Bitcoin on their balance sheets through financing while running their mining operations. I believe this model is stronger and more meaningful because we are not just "buying SOL", but actually playing a role in the infrastructure ecosystem of Solana. With the help of Max and Michael, we are also actively engaging in dialogue with institutional investors to drive the realization of this vision.

Jack:

Apart from operating validators, have you considered expanding into other infrastructure businesses? Is your goal limited to validators, or are there broader technological directions to explore?

Leah Wald:

We are indeed considering more opportunities beyond the validator business, particularly in the auxiliary technology sector that supports the Solana ecosystem. Currently, we are engaging in discussions with multiple parties to explore more possibilities.

Investment Philosophy of Solana

Jack:

What is Solana's investment philosophy at the moment? It seems that you maintain some connection with Microstrategy. Michael Saylor has played an important role in the Bitcoin space, and can be considered a "spokesperson" for Bitcoin. I feel that you are also trying to do something similar. It seems to be a turning point now, as we have recently seen some decline in the popularity of meme coins, such as the once very popular Fire Dancer, which now seems to be losing attention. So, what is your investment philosophy for the remaining time in 2025? How do you view the Solana network and how are you currently promoting Solana?

Leah Wald:

This is a very profound question, and I will answer it in three parts. I believe Solana is currently searching for its own positioning. As a blockchain still in its early stages, it is still striving to clarify its role and value proposition. Solana has its own advantages and core pillars, which demonstrate that it is more efficient than some other blockchains. But the key question is, who finds these advantages appealing? Who will choose to build on it? Who will become its users?

In the Solana ecosystem, discussions around products are very active, such as the concept of "structured products." So, will Solana become a platform that supports on-chain mutual funds? Or will it evolve into a payment system? These are all possible directions. One thing I really like about the Solana community is that there are various types of startups exploring innovation. This year, I hope to see Solana further clarify its niche market. While it has established core advantages, it has not yet fully found its unique positioning that suits it.

This process takes time. Just like Bitcoin, it took a long time to establish itself as a "store of value." Solana and SOL itself are more speculative, so it also needs time to find its direction. In 2025, I will closely monitor Solana's development and hope to see it find its unique niche.

Final Thoughts

Jack:

Regarding other ecosystems, such as Sui, other Layer 1 blockchains (L1), and Ethereum. Honestly, I think there are similar investment opportunities in these ecosystems like SOL Strategies. Why haven't we seen more holding companies adopting similar investment strategies? Do you think such companies will emerge in the next year and a half?

Leah Wald:

I believe that such companies will indeed emerge, and I have already communicated with some interested enterprises. Overall, I expect to see many companies going public in the United States through IPOs, possibly in the form of Special Purpose Acquisition Companies (SPACs). In Canada, I think some companies may attempt to leverage Real-Time Operating Systems (RTOS).

However, with the increase of such companies, I think the key issue is how to define success; merely going public does not mean success. True success depends on multiple factors, such as market participation, investor interest, and trading volume support within the stock ecosystem. This support can come from either the token community or the capital market ecosystem. Therefore, I believe we will see more companies going public, but they need to have a more comprehensive strategic thinking, rather than just going public for the sake of going public.

I hope to see companies that think more comprehensively, not just focused on going public, but with a long-term perspective. I welcome competition. I believe we will see such situations and look forward to these companies actively participating in ecosystem building. Only in this way can we truly promote the healthy development of the industry.