Helius Labs CEO Mert Mumtaz ignited a contemporary spherical of debate contained in the Solana ecosystem on September 10 after floating the thought of a Solana-aligned stablecoin whose reserve yield could be redirected to SOL through buybacks or burns—both as an “enshrined” protocol characteristic or, extra possible, by way of competing digital-asset treasury firms (DATs). “Warming as much as the concept Solana ought to enshrine a stablecoin,” he wrote, including that “50% burn of the yield goes again to burning SOL.” Hours later, he reframed the thrust: “it shouldn’t be enshrined, a DAT ought to do it… repair it and trillions.”
Why A Solana Stablecoin Is A No-Brainer
Mumtaz’s core critique targets what he describes as “yield leakage” from Solana: “Stablecoins are commodities, and at present on Solana, there may be one which captures all yield and actually funds Solana’s greatest competitor with it!” He argued that, underneath the US GENIUS Act, stables are readily swappable and issuers will struggle aggressively for market share—citing the current “Bachelor-style” scramble amongst giant stablecoin firms to courtroom enterprise. “In case you don’t wish to enshrine a Solana-centric steady, then take into account digital asset treasury firms (DATs)… The DAT is actually a machine for purchasing the underlying token.”
That framing collides with the letter of the brand new US legislation. The GENIUS Act, signed in July, carves out “cost stablecoins” as neither securities nor commodities for US federal functions, consolidating oversight largely underneath banking regulators and expressly separating them from SEC/CFTC jurisdiction. A number of authorized analyses and a Congressional Analysis Service word affirm the statute’s classification.
Briefly: Mumtaz’s “commodity” phrasing is rhetorical, not authorized. Nonetheless, the legislation’s most consequential financial element—stablecoins can not go curiosity to holders—means issuers (or affiliated buildings) seize the reserve earnings and may resolve methods to use it. That’s exactly the lever Mumtaz desires pointed again at Solana.
Inside hours, one builder publicly accepted the problem. “We (@KASTcard) will put 101–103% of all curiosity earnings from USDK on Solana, to buyback SOL,” wrote CEO and co-founder of KAST, including that the buybacks would sit with a basis that points a token after a deliberate TGE and that USDK could be issued with the m^0 basis as a U.S. “Genius compliant” steady. The 1–3% kicker above 100% could be handled as advertising spend. KAST and m^0 have beforehand disclosed plans to launch programmable, application-specific {dollars} on the networl; KAST’s shopper app and card already goal international stablecoin funds.
The proposal’s mechanics are easy in idea. A local USD stablecoin accrues reserve yield (e.g., from T-bills) on the issuer stage; a DAT construction then commits that earnings stream to purchase SOL on the open market and both retire it or recycle it into ecosystem packages.
Mumtaz even sketched a toy mannequin—“Assume a Solana DAT runs a Solana steady, name it USDmanlet… [it] earns yield. The DAT takes all of the yield and buys SOL with it… embed it within the ecosystem and take the yield and pump it again… or into burning SOL.”
Stablecoin Wars Attain Solana
Mumtaz’s “funding the competitor” barb is aimed squarely at USDC’s economics and Coinbase’s Base L2. Coinbase and Circle break up USDC reserve earnings, a line merchandise that has grown into a significant income stream for Coinbase as stablecoin provide has rebounded; Coinbase incubated Base, an Ethereum Layer-2 that has rapidly turn out to be a high-throughput venue for on-chain exercise.
None of that’s nefarious—USDC’s phrases are clear—however for Solana purists it’s strategically suboptimal to let billions in Solana-settled stablecoin exercise originate issuer income which are then reinvested in a rival’s stack. That’s the “easy drawback” Mumtaz says he desires to repair, whether or not by enshrining or (extra plausibly) by market-driven competitors amongst issuers and DATs.
Multicoin Capital co-founder and managing associate Tushar Jain agreed through X: “Probably the greatest issues about Solana’s tradition is adopting good concepts from different ecosystems. Hyperliquid’s thought to encourage stablecoin issuers to purchase HYPE with USDH curiosity is a robust technique to drive REV. Why ought to Circle maintain all the curiosity income from USDC on Solana?”
For now, that is solely a proposal—there isn’t a SIP or governance vote to “enshrine” something on the protocol layer, and Mumtaz himself emphasised the market-driven DAT route. Whether or not the proposal takes the type of competing issuers pledging buybacks, a canonical “ecosystem steady,” or a extra modular treasury program, the endgame Mumtaz sketched is unambiguous: cease leaking yield, and level it at SOL.
At press time, SOL traded at $228.
Featured picture created with DALL.E, chart from TradingView.com
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