It is well known that Solana has always had a PerpDEX dream.
When founder Anatoly conceived the Solana architecture in 2017, his goal was to build a blockchain that was fast and cheap enough to support a functional order book.
Nine years later, Drift, Solana’s most successful PerpDEX, was hacked for $285 million and never recovered.
Drift's "death" has not shaken Solana's resolve. In the foundation's narrative, Solana's ultimate goal is ICM—the "on-chain capital market"—moving stocks, commodities, and derivatives entirely on-chain to create an permissionless Nasdaq.
Previously, Solana was essentially a blockchain that couldn't support a high-performance PerpDex, making it unfit for this narrative. But last month, Solana’s Alpenglow consensus upgrade entered community validator testing. This new consensus mechanism aims to reduce Solana’s transaction confirmation time from approximately 12.8 seconds to around 150 milliseconds—approaching the matching speed of traditional securities exchanges. The technical barriers standing in the way are being systematically removed.
The foundation wants a flagship PerpDEX more than ever.
This PerpDEX is called Phoenix, and the development team is Ellipsis Labs.
On Solana, Ellipsis Labs is a prominent name. Led by Jarry Xiao and Eugene Chen, the team launched their proprietary AMM, SolFi, at the end of 2024—a trading venue with no frontend, no liquidity provision from retail users, and quotes supplied solely by market makers using their own capital. After its launch, SolFi’s trading volume surged rapidly, peaking at 60% of all AMM volume on Solana.
Phoenix is the result of this team applying the same expertise to contract trading. According to Ellipsis Labs, market makers can update quotes at lower costs, enabling tighter spreads and deeper order books, while traders are spared gas fees.
No one had ever created an order-book perpetual contract that runs entirely on the Solana mainnet without relying on any off-chain components before Phoenix.
The foundation clearly shares this view. Over the past two weeks, Toly and several foundation members have repeatedly shared and commented on Phoenix, making the promotional intensity visibly apparent.
However, the official members' promotional activities sparked a backlash from the community.
Other PerpDEX platforms relying on Solana—Pacifica, Bulk, Jupiter—are doing the same thing but have never been mentioned by the official team.
Constance, founder of Pacifica, stated calmly, “Our team chose Solana in 2025 without accepting any funding from the foundation or raising money from investors—we simply wanted to focus on building a great product and let the market decide.” She noted that people often ask whether Pacifica’s growth stems from foundation support, and the answer is no. In her view, this kind of tribalism—pressuring developers to cater to specific agendas—will burn down existing bridges before more have even been built.
kdotcrypto, co-founder of Bulk, expressed regret over the foundation's bias: "They promote what they believe is most beneficial to themselves. Pushing others away just because a team meets a certain standard turns friends into enemies."
The logic on the foundation's side is internally consistent.
Toly's core argument is that he favors protocols that run entirely on-chain and can be composited with other smart contracts, because only such protocols generate income for Solana validators. PerpDEXs like Pacifica and Bulk, which move order matching off-chain, generate no revenue for Solana itself, no matter how many trades they process.
Anza, a Solana developer, Max Resnick, directly stated, “Pacifica is to Solana what Hyperliquid is to Arbitrum—even if Pacifica were to surpass Hyperliquid, it would bring no benefit to Solana.”
Multicoin Partners, a shareholder in Solana, also endorses this kind of “brand alignment”: “Chains can be neutral, but foundations don’t have to be—it’s only natural to concentrate limited resources on the teams you believe in most.”
The logic behind the "Solana Gang" goes something like this. A blockchain is like a mall that survives on rent from storefronts and a cut of sales. Protocols that run entirely on-chain are merchants who lease space in the mall and pay a percentage of their revenue. PerpDEX, which moves matching off-chain, is more like a company that only prints the mall’s address on its business card but conducts all its real business elsewhere. Customers come looking for the mall’s brand, but not a single cent stays in the mall.
kdotcrypto and Pacifica do not accept this analogy.
Bulk's rebuttal is that its storefront is not even located in a mall. Bulk is operated by Solana validators and shares the same validator set as the mainnet, with 12.5% of exchange revenue distributed to Solana validators. kdotcrypto calculated that the value generated by this revenue share far exceeds that of 100,000 on-chain transactions.
Constance from Pacifica pointed out that for users to use Pacifica, they must first bridge their funds to Solana—this in itself is a tangible network effect. Pacifica has also made SOL the first and only non-stablecoin margin asset on its platform.
Toly acknowledges overlap between Bulk and validators, but this overlap is merely "the same group of people doing extra tasks," not "the same security system."
On the mainnet, SOL stakers can vote to enable a feature toggle that forcibly changes fee rules, but on Bulk, they cannot, because Bulk’s governance is controlled by its operators, and the SOL held by stakers has no influence over it. Both systems share the same set of operators—saving costs, but not becoming intertwined. Tolyn compares this relationship to the overlap between Wormhole bridge guardians and Solana validators: they appear to be the same group, but in reality, they operate independently.
Regarding validator income, toly says that the mainnet can generate revenue on its own through the burning of base fees from high-frequency transactions—even if only a tiny amount is burned per transaction, at a load of 100,000 TPS, this amounts to hundreds of millions of dollars annually.
Solana has the right to make its own choices.
The foundation has the right to bet its limited resources on the architecture it believes in. Blockchain neutrality does not mean the foundation must distribute resources equally to every team; allocating resources to the direction it most strongly supports is entirely justifiable. Tolyl and Tushar are correct on this point.
However, the arrogance displayed by the Solana team is another matter entirely.
A tweet from toly referred to other Solana PerpDEX teams as enemies drowning in "infinite forks." Foundation members repeatedly retweeted an unverified claim that Phoenix is "six times cheaper" than Hyperliquid.
This “6x” only applies to a single, carefully selected trading pair—the only Gold RWA contract on Hyperliquid that has disabled its growth mode and thus incurs full fees. For Hyperliquid’s standard crypto trading pairs, Phoenix is only about 1.23x and 2.88x cheaper on maker and taker fees respectively; when factoring in the typical self-rebate discounts used by traders, this difference narrows even further.
In contrast to most HIP-3 contracts that follow a growth model, Hyperliquid is actually cheaper.
Large trader WhiteWhale’s real-world test results on Phoenix were harsh: mandatory desktop-only access, visible liquidity depth only about one-fifteenth of Hyperliquid’s, no advanced order types, and an invitation code required for entry.
Phoenix may not be bad, it's just too early.
A product not ready to handle traffic was pushed into the spotlight by the foundation at maximum volume—damaging not Hyperliquid, but Phoenix’s own reputation.
PUMP isn’t part of Solana’s native team, yet it dominates on Solana. Pacifica hasn’t received a single dollar from the foundation, yet it has become the highest-volume PerpDEX on Solana. Real user activity generates data that no foundation marketing budget can buy.
Traders won't blindly trust the foundation's endorsements—the best user experience wins.
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