Keep an eye on Project Zero (P0), a fast-growing prime brokerage on Solana, which will announce its token launch details at the upcoming Breakpoint conference. The investment case for Solana (SOL) is shifting towards a value play, with its valuation becoming more attractive relative to its growing protocol and application revenue. Look for protocols that use revenue for token buybacks, as this is a strong bullish signal; for example, Pump.fun (PUMP) has already repurchased 11% of its supply. Ethena (ENA) represents a significant long-term growth opportunity as it strategically expands to compete with major stablecoin issuers like Circle. For those interested in Bitcoin DeFi, Aptos (APT) is emerging as a key ecosystem for earning yield on BTC.

Solana (SOL)

• A guest on the podcast, McBrennan Peet, expressed a bullish sentiment on Solana, framing it as a potential value investment in crypto.
• He cited a valuation metric of an $80 billion Fully Diluted Valuation (FDV) against $2.5 billion in protocol revenue from the previous year, calling it a "good multiple" that is compressing.
• He acknowledged that revenue for validators from the chain itself might decrease as capacity increases, but he expects this to be offset by application revenue.
• Massive applications like Pump.fun are generating significant revenue that is not yet fully captured by the core protocol or its valuation, representing a potential future value driver.
• There is major optimism for the state of perpetuals (perps) trading on Solana by 2026, driven by:
  • Innovations at the client level from teams like Harmonic (BAM), Anza, and Temporal.
  • The launch of new and upgraded perp protocols like Bulk and Drift v3.

Takeaways

• The investment case for SOL is shifting towards a "value" play, based on the ratio of its market capitalization to the revenue it generates. Investors can monitor this "multiple" as a gauge of its valuation.
• The growth of the application layer is a key catalyst. The success of apps like Pump.fun and the eventual capture of their revenue by the network could significantly increase SOL's value.
• The "Perps Race" on Solana is a critical theme to watch. If new protocols can solve latency issues and compete with leaders like Hyperliquid, it could drive massive volume and value to the Solana ecosystem. The year 2026 was highlighted as a key timeframe for this to play out.

Project Zero (P0)

• Project Zero is a decentralized prime brokerage protocol on Solana, described as the "fastest growing DeFi app on Solana" since its launch in September, averaging over $1 million per day in new capital inflows.
• Its core function is to allow users to consolidate their capital from various DeFi protocols (Camino, Drift, etc.) to achieve better capital efficiency, rates, and risk management. This enables complex strategies that were previously impossible, such as cross-venue basis trades.
• The project is led by McBrennan Peet, a co-founder of MarginFi, and is positioned as a ground-up rebuild with a highly talented team.
• Roadmap:
  • Short-term (Next 6 months): Achieve 100% integration with all major lending markets on Solana (including Drift, JupyterLend, and LoopScale).
  • Mid-term: Integrate its first derivative markets, likely a perpetuals exchange, followed by interest rate markets.
• A Project Zero token is confirmed to be launching. Details will be announced at the Breakpoint conference (in about a month from the podcast recording).
• The token launch is strategically planned to happen before the integration of derivative markets, which is seen as the project's biggest growth opportunity. The speaker noted this is a positive, as they are "not launching a token at the top."

Takeaways

• Project Zero is a high-growth project to watch within the Solana DeFi ecosystem. Its goal is to become the central hub for capital efficiency.
• The upcoming token launch is a major catalyst. Investors interested in Solana DeFi should pay close attention to the tokenomics and launch details announced at Breakpoint.
• The strategy of launching the token before its largest expected growth phase (derivatives integration) could present an opportunity for early investors to gain exposure before the protocol's value potentially increases significantly.

Investment Theme: Perpetual DEXs

• The perpetuals (perps) market is a major area of focus and competition. Hyperliquid and Lighter were mentioned as current market leaders with fantastic products and strong user demand.
• Solana has not yet "cracked" the perps market, largely due to network latency. Solana's block time is around 400ms, while a specialized chain like Hyperliquid's is closer to 50ms.
• A new protocol on Solana called Bulk is aiming to solve this with a target latency of 20ms, which could make Solana highly competitive in the perps space.
• Prop AMMs (Proactive Market Makers) were discussed as a potential game-changer for perps. The guest believes they could be applied to perps, not just spot markets, which could lead to price discovery happening directly on Solana for the first time, rather than just following prices from centralized exchanges like Binance.

Takeaways

• The perpetuals DEX sector is a key battleground. While Hyperliquid has a strong lead, the landscape is still evolving.
• Investors should monitor new technologies and protocols on Solana, like Bulk and client improvements like BAM, that aim to solve the latency issue. A successful Solana-native perp DEX would be a massive catalyst for the entire ecosystem.
• The application of Prop AMMs to perpetuals is a novel concept to watch. If successful, it could fundamentally change on-chain trading infrastructure and value capture.

Investment Theme: Token Buybacks & Value Accrual

• A clear trend discussed is protocols using their revenue to buy back their own tokens from the open market. This is seen as a strong bullish signal and a direct way to return value to token holders.
• Pump.fun (PUMP) was highlighted for having bought back 11% of its circulating supply while sitting on over $1 billion in cash reserves.
• Hyperliquid was also mentioned as a protocol that has conducted hundreds of millions of dollars in buybacks.
• Other protocols with strong value accrual or buyback mechanisms mentioned include Maker (MKR), Jupiter (JUP), Uniswap (UNI), and Lido (LDO).

Takeaways

• When evaluating a token, a key factor to consider is its value accrual mechanism. Protocols that use their earnings for token buybacks are actively reducing the available supply, which can be a powerful driver of price appreciation.
• Projects like Pump.fun and Hyperliquid serve as case studies for how effective a strong business model combined with an aggressive buyback program can be for a token's performance.

Other Assets & Themes

• Aptos (APT): The podcast sponsor. It was highlighted for its growing Bitcoin DeFi ecosystem, with nearly $400 million in BTC assets on-chain offering yield opportunities. This positions Aptos as a potential hub for users looking to put their Bitcoin to work in DeFi.
• Ethena (ENA): Ethena's strategy to expand from a yield-bearing stablecoin (USDe) to offering "stablecoin as a service" was viewed as a smart, strategic move. This reduces its reliance on high funding rates and positions it to compete with major players like Circle (USDC), representing a significant long-term growth opportunity.
• Prop AMMs: This was described as a major innovation on Solana. The guest is "very bullish" and believes they could handle 80-90% of all trading volume, potentially making traditional order books obsolete. This is a core investment thesis for the future of Solana's trading infrastructure.