SOL Earnings Report Q2 2025

Transcript

Good afternoon everybody. Uh this is Ryan Shan Adams. I am today's moderator. We got something exciting for you. This is the Salana Q2 quarterly report. I guess uh Q2 implies quarterly. This is a a Salana report that we're doing every single quarter from now on out. This is being live streamed right now on Bankless Twitter. I should say X and also on YouTube. So what are we doing here? You're in what are you in store for? So imagine if Salana had a quarterly report for token holders for owners of the Soul token. That's what this is. And imagine further if it was presented back in a quarterly earnings call. That's what Mike and I are about to do today. I'll formally um introduce

you to Mike in just a second, but a few housekeeping notes. One is that you can access the full Salana Q2 report. Everything we've we're publishing here and talking about in today's call and then much more. You can access that at the direep.io. We'll include include a link in the show notes. uh and also want to let you know that the data provided on this call and in this report is compiled from public onchain data sets u prepared by the D5 report and by additional data partners within crypto. Uh it's provided as a public service. It's not at all affiliated with the Salana Foundation and it is unuded. This call is being recorded right now. It's going to be

archived on the Bankless YouTube channel within 24 hours. actually right after this call. Um further if you are participating in this call, if you're viewing it live, we will be taking questions at the end. Okay? So think through what you want to ask in order to ask a question. If you're on X, there's a um a chat room. You can leave your question there. One of our moderators will pick it up and get it over to myself and Mike. Also on YouTube, you can leave your question in the chat room. We'll probably run this for 30 minutes. We're going to make efficient use of our time. Uh we'll have some opening remarks. We'll do a state of the network, dive into the reports, dive into the uh the analytics and and the numbers, the onchain numbers. We'll do the Q&A if we have any questions, and

then we'll end with some closing remarks. This is a question to Mike Nato, who is my co-host on the Salana Report uh for this quarter. Why are we doing these quarterly reports, Mike? What's the purpose here? >> Yeah, thanks for thanks for having me, Ryan. Super super excited to do this again. And just a quick shout out to Banklist for giving us the the platform here to share our objective uh research. And the the reason we're here is we think token holders in this case soul holders need a place to go where they can understand not just the network fundamentals and sort of how value is flowing through the chain but also how that acrru to them as soul holders. And so that is what this report is designed to cover. Um this is really the

culmination of like four years in the space really solving our own problems as investors and and working with a lot of the other data companies in the space in doing so. Um so really want to just give a quick shout out to to the other data providers. Most of the data here is sourced by the DeFi report. Um we do have some data in here from Dune an uh we we leverage this through Dune dashboards. So people can access our dashboards uh through this report. Um, but we also, you know, work with Glass Node, Token Terminal. We have some data from Artemis in here, Blockworks Research, Defi Llama, RWA.XYZ.

Um, and so just shout out to those data providers helping to build standards for this industry. Um, and so yeah, I think we're ready to uh to dive in here. >> Yeah, that's great. Um, so you can access those Dune Analytics, all the charts you see in uh in this earnings call on Dune Analytics and you can type in the sole report and that'll get you where you need to go. Uh, all right, let's get started. Why don't we start with some opening remarks? So, a question about highlights for Q2 2025 for Salana and for Soul the asset. What were the highlights would you say?

>> So, key highlights I think you know Salana had a record-breaking Q1. uh a lot of onchain activity. You know, Salana is all about efficiency and sort of transaction volume that really drives the value to to to soul holders. And so coming on the heels of the record breaking Q1, I would say Q2 a little bit more of a a cooling off period I would say say for the network. A lot of the um onchain economics were down for the quarter. And I think we will get into some of this and show that through the efficiency uh metrics of of the chain uh as we get into this report. But to me, I think that's the high level is a bit of a cooling off period and transaction volumes and onchain economics were we're

down a little bit which which we'll get into. >> Okay. Well, let's get into it. So operating performance, let's start with um real economic value. So the acronym for this is REV. Um what are we looking at on the quarter? Yeah, starting starting with Rev and uh and shout out to Blockworks for for helping to standardize this metric. This is looking at base fees, priority fees, uh me tips and and vote fees uh that impact uh sole token holder value. And for the quarter, uh Salana did $271 million in in rev. Uh that was down 667% from from from Q1.

And that's primarily driven, you'll notice that that chart, most of it is is pink and that is geotips. So most of the value that occurs to soul holders is actually me. This is slightly different. We just we did Ethereum earlier today and Ethereum is sort of dominated more a little bit by the base fees. Um Salana's base fees are constant and so it's really about state contention and MEV driving value to soul holders. Um so that's kind of the the main driver there. priority fees were also down uh about 72% on the quarter. Um and in terms of just like the makeup of those those two numbers, 55% of Salana's rev in Q2 came from Geto tips. That's that's

the me portion and 35% came from priority fees. >> Is part of the story for why we're down so much relative to Q1 just that Q1 was uh obscenely strong? >> I think so. I think that's a lot of it. Um, you know, Salana's had a pretty good run the last few years. You can see in that chart that in in Q1 we had a spike up to $50 million uh in in revenue in in one day. I think that might have been the day that Trump launched the memecoin. Um, and things really peaked out and I think we've sort of just sort of kind of leveling off and and getting back to um a more steady state I would say for the network in in Q2. Well, let's talk about how Rev relates to uh real onchain yield and then also total

onchain yield. But first, real onchain yield. Can you explain this one? >> Yeah, so real onchain yield again token holder perspective here. So, uh on Salana, the token holders get access to the geo tips. So, that's all that's that's getting included here is is geo tips that become available to soul soul holders through staking. And the average real yield um in terms of like an APY for the quarter was was 1%. That was down 54% on the quarter and that's primarily due to geto tips again being down uh 66%. The amount of soul staked will impact this yield as well. Soul staked was up 1.5%. So uh that also uh had an impact on the the real onchain

yield. So what's the difference then between real onchain yield and total onchain yield? I guess the total onchain yield number that we're showing here, this is a nominal yield. And so it's it's not real because you have to um subtract what issuance from previous number. >> That's right. So the the big difference here is real onchain yield is coming from users, right? So it's coming from me state contention and and access to block space coming from users only. And then the total onchain yield is is coming from users plus network issuance.

And so uh Salana has higher network issuance. And so that the total total onchain yield was 7.9% in terms of an APY average for the quarter. That was down uh just 14 a.5% and that's primarily because issuance is making up most of this yield. So the issuance is 88%. Um and the the real piece of that total yield is the is 12%. It's the remaining portion there. >> And Salana's annual issuance right now just issuance itself is what around uh you four and a half to 5%. I think this says 4.95% in Q2.

>> Yep. Yeah. So issuance uh so Salana's issuance is just on a sort of uh dropping on a steady state. So it's it's not uh based on the sole stake or anything like that. It just sort of declines uh about about 1.5% per year and so uh issuance was issuance was down a little I'm sorry it's actually declining 8% per year um and trying to get down to 1.5% at its steady state >> and and issu issuance was down four and a half 4.9% in in Q in Q2. All right, let's talk a little bit about some of the efficiency KPIs that you have here. So, this is uh D5 velocity. What is this showing us?

>> Yeah, as we mentioned, Salana, it's all about, you know, just efficiency and and velocity. And so, we look at this D5 velocity metric. We this is a big indicator of sort of what's happening on chain here. And D5 velocity was down 42% for the quarter. What this is measuring is DEX volumes divided by TVL. So it's telling you the turnover rate of of all the TVL that's in Salana DeFi. And when you when you see like the you know we finished the quarter just under point4 there it's kind it's it's essentially telling you that roughly 40% of Salana's TVL is turning over uh on a daily basis.

Uh when that's over one it means that >> uh you know all of the TVL within Salana is actually mo you know moving turning over in a single day. that that was occurring on a on a regular basis uh in Q1. It dropped off a little bit uh in Q2 and it's primarily due to the DEX volume. So uh Radium was down 69% uh in Q2. Meteor was was down 56%, Orcco was down 41% and Pump uh fun was down 31% in the quarter. >> And as a sole tokeno holder, do you want to see uh higher velocity because does higher velocity um infer more me collection? and therefore more real yield going back to token holders.

>> That's right. That's right. So, so a rising D5 velocity factor and we also look at stable coins as well um is is good for value acers. >> Okay, let's keep moving. Uh effective stable coin velocity. So, this is that same metric except applied exclusively to stable coins on salon. Is that correct? >> That's right. Um and this is filtered. So we do strip out a lot of you know wash trading and any circular transactions that that we find on chain. Um this was at 0.042 uh for the quarter. So that's kind of telling you about 4% of the stable coin supply is is turning over on a on a daily basis. Uh that was down 46% in in Q2. That's primarily due

to uh USDT volume being down 31% and USDC volume being down 27%. the stable stable coin supply which is the the denominator here that was also uh down 14% in in Q2. >> Okay. So uh uh Salana lost some stable coins in terms of the assets on the chain in Q2. >> Lost lost some stable coins that were on the chain in Q2 and also uh lost some velocity uh as well there. Yep. >> How about this? Uh Rev divided by active address. What is this showing us?

>> Yes. So rev divided by act this is telling us the real economic value per active address and this is essentially giving you an idea of how you know how good the chain is at turning uh you know active users into into RV. So for the quarter it was 67% uh that was down uh I believe 56%. This is driven primarily by real economic value which which we went over being down 67% for the quarter and also active users were down about 11%.

>> And what does that imply for the cost to produce $1 of real economic value on Salana? >> So yeah, so this is this is an interesting metric. This is really showing more about you know how good is the chain at converting its security expense that they have to pay out to the validators of the network. how good is it at at turning that into real economic value? And so what what this is telling us is is that it was up a little bit. It was up about 70% uh in in Q2. And this is primarily again driven by you know REV being down 67% and then you know your issuance uh was down as well which which factors into that that that metric.

>> So those were the efficiency metrics of this uh relatively high velocity chain. Um let's talk about the token economics for Soul, the asset itself. Maybe we'll start with um issuance. What do you see on the quarter? >> Yeah, so Soul issuance um was was down 4.9% on the quarter. As we mentioned in the beginning, uh Salana's issuance is just it's just it's standardized, so it's just dropping uh at a rate of about 8% per year. Um this is like a 15% disinflation rate that that's applied per epoch. So it's sort of a smoothing process of it of it disinflating over time. Um and and and so the difference here if you're you know if you're also

an ETH holder is that this is not impacted by you know more more soul being staked which it does uh ETH issuance would be impacted by more issu more ETH being staked. Uh this is not impacted. It's just on a set a set set schedule. >> Interesting. Okay. And then uh soul as well as ETH has a burn mechanism here. So what do we see in the soul burn numbers? >> That's right. Um yeah and in and a major you know sort of cliff here occurred uh actually in in Q1 um maybe just to start with the Q2 numbers. Um soul burned about 80 80 almost 84,000 soul for the quarter. Uh that was down 88% from Q1.

And a lot of this has to do with a protocol upgrade that occurred in in February of of this year. Uh that was the SIMD96 protocol upgrade. What that did is it shifted 100% of the priority fees um to validators. Previously, before that was implemented, half of those fees were being burned uh which is why that chart was sort of up and to the right as as the network was um was seeing more onchain activity earlier this year. and then it just dropped off because those fees are no long th those priority fees are no longer being burned. Um they're acrewing to to validators and you know from a if you're a sole holder right now that value is being kept by the the

validators themselves there are potentially some changes coming there where validators are going to start sharing some of those priority fees uh with stakers um but that's the reason why the the sole burned was was down so much in Q2. >> I see. So, this amount goes to validators now, not yet staked soul um holders. It's just sticking with validators. >> Correct. Correct. It used to be uh half burned. Now, it's with validators. And it looks like some of that's going to come back to to soul holders. >> Uh how about sole issuance? Actually, sorry. Uh circ circulating supply. So, I guess this is a culmination of all of these these metrics together. What what does that look like?

>> That's right. So um you know if there are what's interesting here is you do still have some Salana unlocks happening. So with Ethereum there's no unlocks. With Salana there are some unlocks. So this is this is factoring in not just your issuance less your burn but it's also factoring in the um these unlocks. We mentioned that the issuance was down 4.9% for the quarter. Soul burn down 88%. Um what what is sort of causing this 4% increase in the circulating supply is these unlocks that were related to the FTX estate um that that sort of leaked into Q2 and those were fairly large unlocks and so this is impacting uh the total circulating supply. This does not

get expressed through the protocol you know net dilution rate which we'll get to in a minute here. Um but important for people to understand that there were unlocks that is dilutive to uh to to soul holders >> at this point. What is the um circulating supply relative to the the total um diluted supply? So the the total amount of soul to tokens into existence in existence. >> So yeah. So if we maybe if we go to the next chart there if we go to the net dilution rate this is giving you the you know if you're a soul holder and you want to understand you know how much are you being diluted just by holding that token uh just from protocol issuance versus burn it's 5.2% uh from an annualized perspective that was the

average for for the quarter um and so significantly higher than than than Ethereum and some other networks. Salana is a a newer network. And I think that's that's part of why the the issuance um is is is still higher and why um the net dilution is is at that 5.2% uh figure. Again, this impacts you as a sole holder. If you are not staking the asset, if you're staking the asset, you capture that issuance. You capture the me on the network. >> You capture that in a nominal way. And is there a way to see how much more soul um is to be unlocked in future quarters?

>> Yeah, so the the last unlock was one of the one of the one of the large ones. Um there is still um I don't have the number off the top of my head, so we can we can follow up with this piece, but there are some there's still some more unlocks coming before all of the circulating supply is is fully fully into the market. >> Okay, let's uh switch to network fundamentals here. Daily active addresses. What are we looking at in the quarter? >> Yeah, so um you can see this chart. You know, it's it was down in in Q2, but it it's a good looking chart. It's showing secular growth here. Salana averaged 4.7 million active addresses for the quarter. That was down 11%. Um we we talked a lot about this a little bit in the in the beginning there. It was kind

of a cooling off period in Q2 for for for Salana. um less you know DEX volumes less speculative activity on chain a and also pumpf fun um new token issuance was down 27% and so this is impacting you know you know active users on the network >> what do we see when we look at real world assets on salana >> uh growing um so this this chart looks pretty good this is mostly uh US treasury debt salana has uh about $390 million of uh real world assets. We are we're not counting stable coins in this.

We have separate uh data for the stable coins. Um but 390 million that was up 24% largely driven by uh US treasuries and non US uh non-government US debt that was up uh for the quarter. >> The amount of soul staked um are we close to all-time highs there? >> We are close to all-time highs. Not quite at alltime highs but but close to it. So there's uh 390 million souls staked on the network. That's uh almost 2/3 of of the total stake. So much higher stake rate than than Ethereum. Um that was up 1.5% in the quarter which indicates you know a desired for soul holders to capture um the the real yield plus the um the issuance. Um 96 I think

a very interesting stat related to soul staked 96.6% of all salana um staked on the network is with validators that are running goto right. So that makes sense if you're a soul holder. Jetto is the the way that you get access to to me on the network. And so JTO uh is an incredibly important protocol within the Salana ecosystem. >> It's one of holders >> is one of the messages for Soul token holders that if they're holding Soul for uh a longer period of time, even a medium-term time horizon, that they should be staking so that they benefit from this yield.

>> I think so. I I I think so. you know, that comes with risk, right? That comes with smart contract risk. Um, but I think it's something that you have to consider given that uh if you're not staking the asset, you're being diluted at a 5.2% clip just from the protocol. And then you have to factor in the unlocks, uh, as well. >> Total value locked. What's the story here? >> Yeah, so TVL, um, good-looking chart, you know, moving up and to the right here. So Salana has about, you know, much lower TVL than than like the Ethereum network. Um but we saw earlier it sort of turns over that that that uh the assets under management at a higher clip. So 8.6 billion um in TVL that was up 30% uh in Q2. Some of the drivers of

this were Sanctum uh liquid staking solution on Salana was up 76%. uh Camino this is uh lending up 31% JTO uh provides you know MEV also staking 29% was up 29% JTO was up 20 I'm sorry Jupiter was up 23% um and of course we need to mention that you know TVL is also driven by the the price of the assets price of soul so the soul price was up 25 24% on the quarter which impacts uh that TVL number >> and finally we've got new trading token So there's uh some growth here but it was down in the quarter. Uh tell us about this.

>> Yeah, so you know this is this is kind of the story I think for Salana over the last you know year or two. Um you can see that that chart really sort starts to like take off uh really you know from zero just last year right um and this is this is mostly pumpf fun. Um, a lot of the sort of speculative activity originates through pumpf fun through these new trading tokens. Um, and so we saw over three million tokens on Salana launched through these launchpads in in in in Q2. That was that was down from the sort of peak peak um, you know, speculative activity that we saw in Q1 was down 18% in total. That's mostly

driven by pump pump. fund which is about 87% of this sort of new trading token uh market uh 87% of the sort of launchpad market on on Solano. So uh that is the selection of of charts that we wanted to show in this earnings call and for audience listeners if you have any questions we will take questions if there are any from the audience if not we'll just move to closing thoughts and again the way you get that through is on Twitter just get into the chat room ask your question we'll pull it out or on YouTube uh do that as well so now is the time to do that uh if not then we'll just uh move on to closing remarks um there are a few things we didn't cover in today's call,

Mike, that are I think included in the report. So, what didn't we cover? I I guess maybe details on stable coins, you know, fair value correlation type metrics. What else can people look forward to in the full report? >> Yeah, this is just a you know, a smaller subset of the data to try to tell the story a little bit for the for the quarter for this call. The report has uh data. We have a number of metrics that we measure to look at what we think are are decent fair value metrics, a number of correlation metrics as well for for investors to look at. There's a section on stable coins in there that gets into the velocity that gets into stable coin supply and some of the drivers of of the change with with stable coins um onchain. And of course, you know, you

can access our Dune dashboards uh as well and and all that data is is is on chain and uh people can people can look at that, verify that data um and it's it's real time as well. So >> you can get that on Dune of course, go search for the soul report and the full report itself is at the defire.io. Um doesn't look like there's any questions that that came in Mike. So why don't we move to u your closing thoughts? So as a sole token holder, how should uh they be feeling about this Q2 and what should they be looking at?

>> Yeah. So I think um looking at to me everything with Salana is is is related to efficiency and native token issuance. Those were the two drivers of really most of the activity in Q1. So DEX volumes and then this chart we're showing here, the new trading uh tokens. And so I think if you're a soul holder, what you're looking to see here is more activity in DeFi. Uh more more DEX uh trading activity, more more interest, more retail interest in crypto. Um and then you're looking to see these launchpads um you know, you'll pick up again. You know what? Something that I'm looking to see is like a way for these launchpads to to maybe just bring more

transparency to to to the market and and kind of do this in a way where I think some of the the traders feel um like there's just a little more transparency behind things. I think this is probably one of the things Salana is is focused on right now is getting as many tokens trading, doing it in a way where token holders feel they have, you know, the the transparency and and sort of the protections uh needed to to participate in these markets responsibly do that and get these tokens issued and then trading uh within DeFi. And that's really what drives value uh it drives economic activity throughout the network and it also drives value and me to soul holders uh as well. So that's that's what I would be looking for.

>> Well, it's great. It's been an efficient call too, Mike. So, thank you so much for preparing this. We'll we'll close it there. Uh there's a call transcript, the deck, everything else. Uh you can find that on bankless YouTube. Also, the DeFi report for the full report. Also, we mentioned Dune. The next time we do one of these Salana quarterly reports will be October 15th. So mark your calendar. That'll be at the end of of Q3. And of course, we'll have the full summary for the quarter. Uh then and we'll repeat this back. We'll we'll do an earnings call uh in the rest. Also, Mike and I will have a more opinionated episode for you. So, this is very neutral. You know, just the numbers, just the facts. Uh but uh Mike has some investor opinions on Salana the network and other networks as

well. If you want to catch that, we'll have some Banklist podcast coming up later in the week. So go search bank list and subscribe there for that. All right, we're going to end it there. Thank you so much for joining us.