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 can be redirected to SOL by way of buybacks or burns—both as an “enshrined” protocol function or, extra doubtless, by way of competing digital-asset treasury firms (DATs). “Warming as much as the concept that 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 the moment on Solana, there’s 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 combat aggressively for market share—citing the latest “Bachelor-style” scramble amongst giant stablecoin firms to courtroom enterprise. “For those who 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 getting 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 notice affirm the statute’s classification.
Briefly: Mumtaz’s “commodity” phrasing is rhetorical, not authorized. Nonetheless, the legislation’s most consequential financial element—stablecoins can’t cross curiosity to holders—means issuers (or affiliated constructions) seize the reserve earnings and may determine find out how to use it. That’s exactly the lever Mumtaz needs 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 can be issued with the m^0 basis as a U.S. “Genius compliant” steady. The 1–3% kicker above 100% can be handled as advertising and marketing 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 cut 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 shortly develop into 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 might be then reinvested in a rival’s stack. That’s the “easy drawback” Mumtaz says he needs to repair, whether or not by enshrining or (extra plausibly) by market-driven competitors amongst issuers and DATs.
Multicoin Capital co-founder and managing accomplice Tushar Jain agreed by way of X: “The most effective issues about Solana’s tradition is adopting good concepts from different ecosystems. Hyperliquid’s concept to encourage stablecoin issuers to purchase HYPE with USDH curiosity is a strong option to drive REV. Why ought to Circle maintain the entire curiosity income from USDC on Solana?”
For now, that is solely a proposal—there isn’t any 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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