DoubleZero runs on a more pure token economic model than most projects, and we've done a bunch of writing about this, but as there's a bunch of new people excited about the project, I thought I'd do a summary. DoubleZero is a protocol you can build anything on top of, but one of the most popular products developed is DoubleZero Edge. Edge works this way: - Fees are paid in stablecoin (or credit cards or ACH) and that swapped into solana:J6pQQ3FAcJQeWPPGppWRb4nM8jU3wLyYbRrLh7feMfvd - 45% of that 2z is distributed to the fiber network providers that support the infrastructure network. Importantly, there are no passive emissions, so the only payout fiber contributors get is based on fees paid in. - 45% of that is distributed to the data originators, which in this case are participating Solana validators and Hyperliquid validators. These income streams are segmented by network (So Solana fees go to Solana validators, and Hyperliquid fees go to Hyperliquid validators.) - 10% of the solana:J6pQQ3FAcJQeWPPGppWRb4nM8jU3wLyYbRrLh7feMfvd is burned to permanently remove it from supply by destroying it. - The protocol has no inflation. DoubleZero.

Here’s the master plan for @doublezero - Connect all the places people want to trade, to all the traders (and their agents) who want to trade there, faster then anyone else and faster than the internet. - Support the fastest blockchains and decentralized systems with dedicated high preference infrastructure to compete with traditional finance - Make it all seem easy. DoubleZero

One other announcement we made today, outside of Edge: DoubleZero now offers deduplicated Hyperliquid gossip feed via Block Proxy via our @HyperliquidX Peering Service. This is a specialized product suitable for certain types of clients, and you can read more about it here

Someone who works for a major Solana app today asked me to steel man SGP-0003. This is not my personal view, but an explanation based on my conversations on why some people are voting yes, while a number of application developers are concerned about the fee structure change. There’s lots of good write ups on exactly what this changes but the short summary is light txs can get cheaper. Heavy ones pay more. The new resource fee is burn, not distributed as validator income. The case for it is that Solana takes almost none of the fees generated on Solana. If you add it all up, from chain fees, DEX fees, frontend fees etc, about 7% goes to network layer. 93% is the application layer. And most of that 7% is paid to the leader, not burned. Burn, the thing that actually hits SOL, is tiny. Issuance exceeds burn meaningfully, even at terminal 1.5% Hyperliquid looks different. 97–99% of protocol trading fees go to the assistance fund and get bought into HYPE. Frontends and HIP-3 deployers take a cut on top, and HIP-3 can be 50/50 with the deployer, but the protocol’s share still becomes HYPE. The stack is not inverted the way Solana’s is. How much that matters depends on your assumptions for Solana’s growth. If you think Solana is within 2–3x of TAM, these unit economics get rough. If you think there’s 10x or 100x left, you care a lot less. Because you can make it up in volume. This has been Solana’s game to date. ETH was very successful on value accrual but then tried “scale first, the base layer will get paid later.” And we all know how that’s turned out. L2s kept almost all of the fees. That’s the fear if demand here flattens on Solana. The other side is obvious: people want more fully onchain compute, and this makes that more expensive. Solana is more valuable the more is onchain and compatible. CEX and other chain fees are still much higher than Solana’s. So the question isn’t really whether the chain should be more expensive than today and in line with others, or disruptively cheap. It’s whether more of the 93% should accrue to SOL today, or if the network can grow into value by growing transactions.

Here’s the thing: second homes worth $5 million or above are the best thing that ever happened to the New York City budget. I think about it: they are usually condo buyers which are taxed higher and they don’t use anywhere near as many city services because they are not here often and certainly not the public school system. Plus they employ a ton of service workers.

Our GC @MariTomunen is live now hosting a virtual fireside chat with Joseph E. Silvia (Partner @DuaneMorrisLLP, former counsel to the Chicago Fed) on AML/CFT in the age of crypto. Tune in below: