Why Solana Deserves Ethereum's Market Cap ft. Kyle Samani

Good, thanks for having me on the show. Pleasure to be here in this epic little square glass box in the middle of the show floor at Breakpoint.

Yeah. You know, I kind of scrolled through the announcements from yesterday and I followed stuff this morning. You know, what I feel like my kind of thing I'm seeing here is that Solana is an integrated blockchain and everything works. And so like yesterday, State Street announced they were bringing a tokenized money market fund onto Solana, but they announced it in partnership with Coinbase and with Galaxy and I think they're going to do some stuff with some of the big payments companies and Circle and that's kind of exactly what I want to see. You know, like Solana, the whole point of it is that it's a one integrated system that can support all of payments and finance. And what we see here at Breakpoint is it's 6,300 people. It's the largest event in crypto ever. And you've got all of these different groups, whether you're a memecoin trader or a DePIN team or a Wall Street asset issuer or a payments company or a CeFi exchange like Coinbase and all of these people can work together on top of a single piece of shared global infrastructure. And that wasn't possible before. When you look at Ethereum, you see all of this segmentation into like well this chain is for payments and this chain is for DeFi and whatever. And here we get to just make all of money and finance work together as one cohesive whole.

Yeah, I mean I think in '26 the big thing we're going to see is going to be payments companies integrating stablecoins and rolling them out on Solana. Obviously Western Union is doing a big roll out in Q1. Cash App, you know, they just announced they're integrating Solana for USD payments for 67 million customers. Ferve and World Pay and Visa and all the merchant acquirer type of people are all ramping up right now their use of stablecoins all on Solana. And so I think when we look back at the end of '26 that I think that's going to be the thing that's like it's all happening quietly because they're all doing it in the background but I think like that might lead an incremental 50 or 100 million new wallets on mainnet next year.

Yeah. I mean, it's like once you use Solana, you realize very quickly this is what finance should be. And what I mean by that is it should be next to free to use. It should be super fast. It should work even when the markets are volatile. You shouldn't get ADL and have your positions closed out. You should have access to the most number of assets that are available. And then now we have all of this leading intellectual capital building these perp AMMs, building these DePIN things, like all of that leading edge innovation is happening here. And I think that kind of both the user experience side which is like very clear you use Phantom or Solflare, Backpack or Fuse it's super clear and then on the developer side looking at like the quality of the intellectual capital, like it is the leading ecosystem today on both fronts and I think the people who come to Breakpoint kind of really viscerally understand that.

Yeah, I mean look, we kind of helped create the DePIN category with our investment in Helium in 2019. So, it's been 6 years. And I'd say it's been a little slower than we would have liked. But I do think a number of the major DePIN teams are really turning a corner right now, in particular in our portfolio. You know, I'm most familiar with Helium, Hivemapper, and Geonet. And all three of them right now I think are kind of on the cusp of that where the exponential curve really turns upwards. And so I think that will be a major story of '26. With most of these DePIN things, you know, the incubation period takes a while. It's not like launching a DeFi protocol. You got to build up the network, you got to call the customers and ramp up the demand. But like all three of those teams now I think they've kind of completed the incubation phase and are now in the ramp up phase and I'm pretty excited for those guys.

I mean look, I can't speak about other DATs and what their plans are. I assume they have plans. They may not have plans, but I can't speak for them. I can speak for myself and for Forward, so I'll do that. You know, launching Forward Industries has been a lot of brain damage for me just in terms of time. And like I didn't launch Forward Industries so that I could be like, 'Oh, the MNAV is 1.2 and like I can sell some shares and make some money.' I already own a ton of Solana. I've owned Solana since literally you could own Solana. I led the seed round. I'm not doing this much brain damage to myself so I can incrementally get a few more Solana tokens. That's like not worth my energy. What's worth my energy is having this publicly traded vehicle. We're the largest Solana DAT in the world by a factor of about four and we can use this to buy companies, operating businesses and do interesting things on top of Solana with those companies. We haven't done any deals yet and obviously I can't talk about deals that are in pipeline but what I can say is I think the most interesting opportunities available are going to be deals where we buy a company that today is either tangential to crypto or even not in crypto at all but where we can insert crypto as kind of a foundational element of that consumer-facing product and then really change the economics of that business in a very interesting way. And so we're now spending a bunch of cycles looking at a bunch of deals to that effect. I hope we can get some of those across the finish line and then share those with shareholders. In the long run, I think Forward Industries is going to look something more like Bending Spoons. Or if you're not familiar with Bending Spoons, the more classic example would be Berkshire. I think the difference between us and Berkshire is Berkshire is kind of a value shop. And we're going to be a growth shop. And you know that we want to offer investors a vehicle they can get access to. They'll get some SOL exposure obviously, but then you know our ability to identify interesting companies, buy them at attractive prices and hopefully accelerate growth by instituting crypto in very interesting ways.

Yeah, I mean I don't know a ton about UAE, but like what I do know is both Abu Dhabi and Dubai have really embraced the crypto industry with the arms wide open. They have created regulatory regimes that welcome entrepreneurs. You know, I think Binance is registered here. I know the Solana Foundation is registered here. A bunch of crypto squads of our portfolio companies are all based here. And so they're encouraging innovators and they're saying, 'Look, finance needs to have rules. It's great that the base layer is permissionless, but we need to have rules for real investors for investor protection. Here's a framework that you need to comply with.' And Abu Dhabi and Dubai have moved very quickly. They've defined the rules and they've said, you know, please set up shop here and make your services available based here. And like that's what we want is rule of free finance is not good. You don't want to have rules encoded in the base layer. The base layer should be open. Like any technology like you can do good or bad. The internet can be used for good and bad. So you want the base layer systems to be open and then you want to have applications and rules built on top of that that help commercialize these things. And that's what I expect is going to happen. And look places like UAE are really at the forefront of that because they make very quick and rational regulatory decisions. And that's why there's so much of the crypto industry is based here.

Yeah, I mean look like the defining feature of the American Constitution is that it's meant to keep the federal government moving slow both congressionally and executive branch. I know sometimes we as Americans can get frustrated with how slow things are at the federal government, but we have to remember that that is an intentional feature in the design of the constitution. And look it's worked well for 250 years is you know we have our 250th birthday coming up in a few months here. The US has made incredible strides in 2025 and I expect a lot more strides both coming out of Congress and the executive branch. You know in '25 obviously we had the Genius Act passed that's certainly the most consequential piece of financial legislation passed by Congress since Dodd-Frank in 2010. And I think if we look back in 20 or 30 years time, I think the Genius Act will actually be looked at as being far more consequential than Dodd-Frank. If it's going to facilitate, look, if in 30 years time 6 billion people are holding stablecoins, which I US dollar stablecoins, which is kind of my base case, then without question, the Genius Act will have been more consequential than Dodd-Frank. So that's incredibly exciting. And then you just look at all of the engagement we've gotten from every major branch of the administration, SEC, CFTC, FinCEN, IRS, Treasury, all of these departments are all issuing good guidance on issues like collateral for derivatives, DeFi innovation exemptions, tax issues around staking, prediction markets, like all of these things. We're getting that guidance on at this point almost a weekly or bi-weekly basis from these folks. And I expect that will continue, you know, over the next few years as well. Obviously the last kind of big get we're aiming for is the Clarity Act out of Congress. Fingers crossed we'll get there. I know there's a lot of people in DC doing good work. Our team and a bunch of the folks from the Solana Policy Institute have been rolling up their sleeves and I think we're going to get this thing passed in Q1.

Yeah, there's a lot of theories as to why that is. I think the one that to me is probably the most salient is there's a lot of people who are in crypto who they just adamantly believe in this four-year cycle which look it was true for the prior three cycles. Like why it's crazy that it was so predictable like a clock for 12 years basically and therefore and look those people they've been in crypto for a long time they're pretty wealthy now because they've been long crypto for a long time. If all of them, not all, if a lot of them believe four-year cycle must persist, then they're going to sell. And that's just kind of a self-fulfilling prophecy. My guess is that explains like 60 to 80% of the underperformance of what I would have expected this year. I think at this point all of those people have, you know, the people who adamantly believe in the four-year cycle, I think they're basically done selling. Meanwhile you have these tailwinds as you just noted and you see that you know at this conference I mean we're seeing State Street announce products and Square, Cash App, Western Union and all these guys like and you see the excitement coming from Silicon Valley from Wall Street from the payments companies is really palpable. You look at the ETF I mean the Solana ETFs they've raised about a billion dollars of incremental inflows in just over a month. And that doesn't look like it's going to stop anytime soon. And so, I feel pretty good about where we are. And look, like those people who believe in the 4-year cycle, right? They've all called it, sold over the last 90, 120 days, whatever. At some point they will say, 'Oh my, maybe my four-year cycle hypothesis was wrong.' And, you know, the cycle is actually going to continue going. And when those guys then pile back in, you know, you could see this thing really rip up in a big way.

You know I've actually defined this in some of the presentations I've given. I think kind of the most succinct definition of internet capital markets is a very simple idea which is just that anyone should be able to trade any asset anywhere in the world anytime 24/7 with just an internet connection and a phone in their pocket. That's it. It's like shockingly simple. What's crazy is that because of how finance has evolved over the last 150 years around the world that's not true. But like if you were to pause and think about it and say well you know why can't you just trade any asset anywhere in the world 24/7 with an internet connection. Obviously, the way we use the internet today, YouTube, Spotify, email, me, you know, like all of those properties I just described are all true of every major internet service in the world. And 7 billion people viscerally understand that because they use the internet and they're like, 'Oh, these are great services.' And then you go use finance and like it's like, 'Well, it shuts down at 4:00 and like, oh, it's Columbus Day. It's like JK. The banks aren't working.' And obviously weekends are off and like and it's like well I move money between countries and it's like the fees are 3%. It's just like you're just like what the why like the internet does not work like this. But for finance it and so to me internet capital markets is just bringing all of these properties that we all really viscerally understand about the internet and applying them to finance.

You know, look my first true love in crypto was Ethereum. I got into Ethereum in 2016 and by end of '17 I started to grow disenfranchised with Ethereum because I thought they were moving too slow. And so I looked for alternatives, ended up finding Solana, ended up making a bunch of big bets there. Obviously we all know kind of how that played out. I was very right in that Ethereum was going to execute very slow. And, you know, I think today if you ask people who are in crypto, you really people who are in the crypto community and really know what's going on, I'd say it's consensus opinion at this point that Ethereum is way too slow and has really dilly-dallied around for five or six years. What's crazy is that despite the fact that that is the consensus view the amount of inertia in Ethereum has really been hard to appreciate and certainly very few people on the planet earth have competed with Ethereum harder than I have. Probably the two who have their names are Anatoly and Raj, you know, founders of Solana and I have just continually been impressed at the just inertia in Ethereum. Now the flip side of that is you know the bigger they are the harder they fall and I do think Ethereum's reckoning is coming pretty soon.

Yeah, the thing I think the hardest thing to appreciate in crypto is you know, Ethereum's market cap is called 5x Solana's, 4 or 5x something like that. And so based on that, you would assume, okay, well, there must be, you know, four or five times more users, four or five times more fees being paid to the system, four or five times more trading volumes, you know, more four or five times active addresses, like you would just kind of assume like roughly that like all of those stats, you know, would be four or five times higher. And it's just like not true. Ethereum leads in a handful of statistics. The most notable one probably is stablecoins issued. But if you look at statistics that reflect usage, meaning someone waking up every day, opening their phone and clicking a button, you know, people doing stuff, Solana blows away Ethereum on all of those metrics. Stablecoins transferred, daily active addresses, daily transactions, on-chain trading volumes, fees paid into the system, all of the things that demonstrate healthy active usage Solana dominates on. And it takes a lot of people a while I've realized to kind of just recognize and say, 'Wait a minute, like the market cap says, you know, X and 5X call it, but the usage data is inverted.' And you know, I still a lot of people still say, well, you know, Ethereum can never be beaten. It's unseatable. It's invincible. And it's well, it's what everyone uses. And like in my conversations with people, I noticed that that's implied that like Ethereum has this insurmountable lead. And it is just not true. So I just encourage people to like go look at the data, look at the first, use the products, use MetaMask, move some money between L2s, and then go use Solana and then go look at the stats and, you know, I think you'll come to the same conclusion that I have.

Good. Thanks for taking some time today here at Breakpoint.