SOL Earnings Report Q3 2025

Here's a comprehensive summary of the YouTube video transcript, maintaining the original language and technical precision:

Key Concepts

• Real Economic Value (REV): Revenue generated from blockspace, including base fees, priority fees, MEV (Miner Extractable Value), and validator tips.
• MEV (Miner Extractable Value): Revenue derived from the ordering of transactions within a block, often referred to as "go-to tips" for Solana holders.
• Total Onchain Yield: The nominal yield earned by stakers, primarily from protocol issuance.
• Real Onchain Yield: The yield derived from actual user payments and MEV, excluding protocol issuance.
• Gross Domestic Product (GDP): A metric representing the total fees generated by applications built on Solana, indicating facilitated economic activity.
• Daily Active Addresses (DAA): The number of unique addresses interacting with the Solana network daily.
• Real World Assets (RWAs): Tokenized traditional assets like public equities and US treasuries on the blockchain.
• Total Value Locked (TVL): The total value of assets deposited, staked, or locked in DeFi protocols, excluding stablecoins.
• Stablecoin Supply: The total value of stablecoins present on the Solana network.
• Stablecoin Velocity: The rate at which stablecoins are transacted on the network, indicating capital turnover.
• Private AMMs (Automated Market Makers): Decentralized exchanges where liquidity is supplied by a specific entity rather than the public.
• Public AMMs: Decentralized exchanges where anyone can contribute liquidity.
• Launchpads: Platforms facilitating the issuance of new tokens.
• Trading Platform Revenue: Revenue generated by platforms that offer trading bot infrastructure and copy-trading services.
• Monetary Policy: The issuance schedule and supply dynamics of the native token (SOL).
• Net Dilution Rate: The rate at which a non-staked token holder's stake is diluted due to token issuance.

Solana Q3 2025 Quarterly Report Analysis

This summary details the findings of the Solana Q3 2025 quarterly report, presented as an earnings call for SOL token holders. The report is based on public on-chain data and is a public service provided by analysts, not affiliated with the Solana Foundation.

High-Level Overview of Q3 2025

Michael Nato categorized Q3 2025 for Solana as a mixed quarter. While overall economic activity on-chain contracted compared to previous quarters (which were themselves down from Q1), there were notable bright spots, particularly in the stablecoin economy and DeFi. A significant development highlighted was the growth of private Automated Market Makers (AMMs) within Solana's DeFi ecosystem.

Real Economic Value (REV)

• Total REV for Q3 2025: Approximately $223 million.
• Quarter-over-Quarter (QoQ) Change: Down 18% compared to Q2 2025.
• Year-over-Year (YoY) Change: Up 241% compared to Q3 2024.
• Drivers of Decline: The primary driver for the QoQ decline was a decrease in MEV (go-to tips). This was attributed to a 30% drop in active users on Solana during the quarter, leading to less state contention and speculative activity, including a decline in memecoin activity.
• MEV and Jito: MEV, often referred to as "go-to tips," is crucial for SOL holders as it represents their claim on these economics. Jito, a critical protocol on Solana for transaction execution and MEV protection, plays a significant role in distributing these payments to validators and, subsequently, to SOL holders. Jito recently secured a $50 million raise from a16z, underscoring its importance to the Solana ecosystem.
• Spikiness of REV: Solana's REV chart exhibits significant spikes, unlike traditional company revenues. This is characteristic of the crypto industry, driven by users chasing narratives and speculative activity, leading to intense competition for blockspace and MEV spikes.
• Sustainability of MEV vs. Priority Fees: Both MEV and priority fees are dependent on state contention and user willingness to pay for blockspace. As Solana's blockspace capacity is expected to expand, priority fees might remain low. MEV, while also affected by contention, is seen as potentially less susceptible to erosion from increasing supply.

Total Onchain Yield

• Average APY for Q3 2025: 7.08%.
• QoQ Change: Down 10% versus Q2 2025.
• Composition of Yield: 93% of the 7.08% yield comes from issuance (inflation), not from user activity or payments for on-chain services.
• Nominal vs. Real Yield: The 7.08% is considered nominal yield.
• Real Onchain Yield: Approximately 0.44%, derived from user payments and MEV.
• Impact on SOL Holders: For stakers, this issuance is paid out. For those simply holding SOL, this issuance results in dilution.

Solana GDP (Gross Domestic Product)

• Total GDP for Q3 2025: $99 million.
• QoQ Change: Down 6.8%.
• Comparison to Ethereum: Solana's GDP is smaller than Ethereum's (over $2 billion in Q3).
• Drivers of GDP: Fees generated by applications on Solana. Notable applications include Pump.fun (trading bot), Axiom (trading terminal), and Radium (DEX).
• Q3 Drivers:
  • Pump.fun fees: Down 41%, indicating less speculative activity.
  • Go fees: Down.
  • Pump.fun fees: Down due to fewer new tokens issued on launchpads.
  • Radium: A bright spot, up 83% after launching Launch Lab, a Pump.fun competitor.
• GDP Mix: Solana's GDP mix is skewed towards trading platforms like Pump.fun and Radium, differing from Ethereum's mix which includes stablecoins and collateralized loan providers.

Daily Active Addresses (DAA)

• Average DAA for Q3 2025: 2.7 million.
• QoQ Change: Down 30%.
• YoY Change: Up (compared to a lower base in the previous year).
• Implications: The decrease in active users contributes to less state contention, reduced MEV, and a ripple effect on SOL holder economics.

Real World Assets (RWAs) onchain

• QoQ Growth: Up 42%.
• Public Equities: Saw significant growth (up 731%) from a small base, with a few hundred million dollars tokenized.
• US Treasuries: Remain the bulk of tokenized RWAs.
• Notable Issuers: Superstate and Galaxy (first publicly traded firm to tokenize stock on Solana).
• Native Tokenization: The tokenization of actual stock ownership on Solana allows for direct dividend distribution to token holders, opening possibilities for using these tokenized stocks as collateral in DeFi.
• Total RWA Value (excluding stablecoins): $682 million.

Total Value Locked (TVL)

• TVL at end of Q3 2025: $11.5 billion.
• QoQ Growth: Up 33%.
• YoY Growth: Up.
• Influence of SOL Price: The significant increase in TVL is partly driven by the 35% rise in SOL price during the quarter, as a substantial portion of TVL is in SOL.
• Key DeFi Protocols:
  • Sanctum (liquid staking): Up 51%.
  • Camino (lending): Up 38%.
  • Jupiter (DEX aggregator): Up 40%.
  • Jito (MEV/validator client): Up 12%.

Correlation to SOL Price

• Solana vs. Ethereum: Unlike Ethereum, where TVL is more correlated with ETH price, SOL price tends to be more correlated with real yield.
• Key Correlated KPIs for Solana: Real yield, transactions, and GDP (less so than on Ethereum).

Stablecoin Supply

• Total Stablecoin Supply on Solana: $14.6 billion.
• QoQ Growth: Up 37%.
• YoY Growth: Up 284%.
• Market Share: Represents about 5.1% of the total stablecoin supply in crypto markets.
• Dominant Stablecoins:
  • USDC: Up 40%, controls approximately 69% of Solana's stablecoin supply.
  • Tether: Controls roughly 20%.
• Growth Rate Comparison: Solana's stablecoin growth rate (37%) was slightly higher than Ethereum's (30%) in Q3.
• Ranking: Solana is on the next tier after Ethereum (62% of supply) and Tron (estimated 25%), holding about 5% of the total stablecoin supply.

Stablecoin Velocity

• Effective Stablecoin Velocity: Up on the quarter, relatively flat year-over-year.
• Significance for Solana: Velocity metrics are crucial for Solana due to its high-throughput, "NASDAQ on-chain" proposition. Higher velocity indicates faster capital turnover.
• Q3 Velocity: Up about 42%, with a velocity of 0.059. This means approximately 6% of the stablecoin supply turns over daily.
• Comparison to Ethereum: Solana's stablecoin velocity is higher than Ethereum's.

USX Stablecoin (Solstice)

• Issuer: Solstice, a sponsor of the report.
• Description: USX is a yield-bearing stablecoin built on Solana, powered by delta-neutral strategies. It functions similarly to Athena on Ethereum.
• Market Position: The fifth largest stablecoin on Solana, finishing Q3 with over $167 million in AUM (and now over $200 million).
• Growth Mechanism: USX's growth scales with delta-neutral strategies, offering a different model than traditional stablecoins backed by reserves.
• User Appeal: Offers a yield-generating option for stablecoin holders seeking a store of value.

DeFi Velocity on Solana

• QoQ Change: Down 18%.
• YoY Change: Up 27%.
• Metric: Measures the turnover of Total Value Locked (TVL) within Solana applications.
• Q3 Velocity: 37% of Solana's TVL base turned over daily. This is described as "astronomical" and indicative of "fast DeFi."
• Comparison to Ethereum: Solana's DeFi velocity is significantly higher than Ethereum's, which has a larger asset base with slower turnover.

Token Economics (Monetary Policy)

• Solana's Issuance Schedule: Programmatically disinflating over time, not directly impacted by the amount of SOL staked (unlike Ethereum).
• Circulating Supply Growth: 16% growth in circulating supply over the last year, primarily due to issuance.
• Burn Rate: Very low today, with only half of base fees being burned. Priority fees are now directed to validators.
• Dilution Risk: Holding SOL without staking carries a significantly higher risk of dilution (16% over the last year) compared to holding ETH without staking (less than 1%).
• Staking Ratio: Approximately 70-80% of SOL is staked, indicating a strong incentive for holders to stake to capture issuance rewards.
• Net Dilution Rate (for non-stakers): Averaged 4.8% for Q3, down slightly due to decreasing issuance.
• Issuance Plan: The inflation rate started at 15% and is scheduled to decrease programmatically over approximately eight years to a steady state of 1.5%.
• Burn Mechanism: Solana's burn rate is currently lower than Ethereum's, and it only applies to half of the base fees, not MEV revenue.

DEX Volumes

• Average Daily DEX Volume: Approximately $4 billion.
• YoY Growth: Up 279%.
• QoQ Growth: Up.
• Public vs. Private DEX Volumes:
  • Public DEX Volumes: Down 9%.
  • Private DEX Volumes: Up 70%.
• Private DEXs: These are DEXs where liquidity is supplied by a specific entity. They offer enhanced execution and user experience by plugging into existing infrastructure like Jupiter and Jito, providing tighter spreads.
• Market Share Shift: Private DEX volumes now constitute 37% of all Solana DEX volumes.
• Radium: Historically the largest DEX on Solana, its market share has dropped to 22%.
• Market Makers' Preference: Private AMMs offer a model where market makers can tighten spreads for users, benefiting all parties involved. Humidify was a notable private DEX that gained market share in Q3.
• "Dark Pools": Private DEXs are described as operating somewhat like "dark pools" due to their private nature and lack of public websites.

New Trading Tokens

• Total New Tokens Launched in Q3: 2.75 million.
• QoQ Change: Down 19%.
• Context: This metric refers to new tokens issued on Solana launchpads, with a significant portion being creator or meme coins.
• Pump.fun vs. Radium Launchpad: Pump.fun, with historically high market share (around 90%), faced competition from Radium's launchpad (partnering with Bonk). While Radium's launchpad was initially successful, Pump.fun regained market share, highlighting the difficulty of retaining users in crypto due to low switching costs and the need for incentives like referral fees and airdrops.

Trading Platform Revenue

• Total Revenue in Q3: $214 million.
• Significance: This metric reflects the activity of trading bot infrastructure on Solana, indicating the speculative nature of the market.
• QoQ Change: Small contraction.
• Axiom's Impact: Axiom, a Y Combinator startup, has aggregated various Solana DeFi services into a single terminal, integrating with launchpads, DEXs, and token discovery tools.
• Axiom's Market Share: Axiom has captured 70% market share in this sector, generating significant revenue without a native token.
• Customer Acquisition: Axiom utilizes an interesting referral program, where approximately 30% of their revenue is kicked back to traders who refer others and are active on the platform.

Closing Remarks and Outlook

• Current SOL Price: Approximately $180 (down from all-time highs but significantly up from bear market lows).
• Overall Assessment of Q3: A mixed quarter, but the Solana ecosystem is considered to be in a healthy shape.
• Solana's Redemption Arc: The network has undergone a significant redemption following past challenges, attracting builders and users.
• Crossing the Chasm: Solana is seen as having crossed a chasm, similar to Ethereum's early development, solidifying its position.
• Future Focus: The next few years will be crucial for understanding institutional adoption of crypto infrastructure and Solana's role in it.
• "Fast DeFi" and Consumer Use Cases: Solana is positioned as a "fast DeFi" and consumer-focused network. The trading of meme coins and creator tokens is identified as a primary consumer use case, akin to a "game."
• Competition: The competition among smart contract networks for institutional adoption and real-world asset tokenization is ongoing.
• Report Availability: The full report and accompanying Dune dashboards are available at thed5report.io.
• Data Partners: The report utilized data from Dune, Token Terminal, Artemis, Glassnode, and RWA.xyz.

The discussion concludes with an announcement of a future episode discussing the current cycle and market outlook, and a reiteration of thanks to data partners.