Flash.Trade founder Anas Khader gave three reasons for shutting down his Solana perps exchange on Aug. 7, and the second one named the Solana Foundation. Four days later the Foundation’s president was publicly rejecting the word “kingmaking.”
The underlying discussion is how an organization with a treasury and a large audience should behave in a category where several teams are competing. It can concentrate support behind the product it judges best for the chain, or spread support across all of them and let volume settle the question.
Solana’s perps market cleared $1.34 billion in 24-hour volume on Wednesday with $445.11 million in open interest, per DefiLlama, against Hyperliquid’s $4.45 billion and $11.21 billion. Phoenix, the venue Khader later named, ranks fourth on Solana by 24-hour volume at $40.23 million, behind GMTrade’s $918.05 million, Pacifica’s $262.88 million and Jupiter’s $109.65 million. Flash.Trade did $4.79 million.
Crowned Dearly
“The thing that hurt me personally was the sincere disregard by the folks at the foundation,” Khader wrote on Aug. 7. “It was really painful, you never expect such coldness, supporting only one team so dearly bcz it help Solana succeed in their view.”
He said he had learned of a plan to back that team “to the teeth” in the run-up to Breakpoint, the Foundation’s flagship conference, because “Solana needs one winner, and they really do.” Khader added a caveat in parentheses, declining to blame the Foundation for the choice and calling his own reaction emotional: “watching one team being crowned dearly, which is wrong of me.” The shutdown post named no team.
He named Phoenix two days later. “Phoenix was doing lower volumes than us and had to literally pay money to even match us and that money is something that comes from foundation’s grants directly or indirectly,” Khader wrote on Aug. 9. He gave no evidence for the grant claim. The Foundation has not disclosed recipients or amounts under its perps program.
Flash never raised outside capital and distributed roughly $520,000 in USDC revenue share to FAF holders over its life, The Defiant reported. Proceeds from any acquisition go pro rata to token holders, with team tokens excluded. Khader also cited team misalignment and exhaustion from running a bootstrapped exchange.
DeFi researcher Ignas was blunter than Khader about the Foundation’s role, replying to the announcement: “Solana failing to support you was obvious. Shilling shitty Pheonix which is inferior product was low.” [sic]
One Clear Winner
Solana DeFi commentator Fabiano framed the episode as a deliberate architecture bet. Phoenix runs its order book, matching engine and market makers onchain, which generates Solana activity; Flash priced off oracles and pooled liquidity, “making Solana primarily the settlement layer,” he wrote on Aug. 8.
“From a marketing perspective, pooling resources on one potential Hyperliquid competitor may also make more sense than supporting several smaller protocols,” Fabiano wrote. “It’s brutal for builders, but Solana probably needs one clear winner in perps.”
The Foundation’s own program language points the same way. Its June 1 call for fully onchain perps offers distribution, technical assistance and capital, and prioritizes teams with no offchain sequencers or matching engines, genuine onchain price discovery, and protocol-level revenue routing to Solana. Phoenix, built by Ellipsis Labs, meets every criterion. Flash did not.
Open Meritocracy
Solana Foundation President Lily Liu answered on Aug. 10. Everything the foundation does rolls up to attracting talent and capital to Solana, she wrote, and concentration works against both.
“‘King making’ is short sighted and self limiting: it caps how much of either can form,” Liu wrote. She also rejected the opposite pole. Credible neutrality “sounds like high-minded fairness. In practice it’s great for code but comes up short applied to humans, whose express role is to exercise judgment, at risk of fallibility. Aspiring to eliminate the need for taste, judgment, and leadership doesn’t remove human judgment. It pushes it into the shadows.”
Her stated principle: “open meritocracy: actively facilitate competition, let the market decide. No one is bigger than the market — for capital, for talent, or for users.”
Liu named the public perps program and Frontier Traders, the institutional program launched June 11 for firms clearing $500 million in trailing 30-day onchain volume, as evidence of breadth. She conceded the optics problem: “I don’t think our socials presence has fully represented the actual diversity of support or range of perspectives on perps. (This will change.)”
“Entrepreneurship is a brutal battle. Most attempts fail, for all kinds of reasons. The presence or absence of RTs aren’t high on that list,” she wrote. “Our job is to try to attract the best talent and capital to Solana to compete. The Foundation doesn’t decide who succeeds or fails — the market does.”
Toly Jumps In
Solana Labs co-founder Anatoly Yakovenko made the same point on Aug. 9 with a sarcastic quote-tweet. Referencing a report that mobile trading app fomo had flipped Hyperliquid in 24-hour revenue, he asked: “How could they do this without Solana Foundation?”
fomo posted $2.64 million in revenue for the week ending Aug. 8, an all-time high on Solana, with 24-hour revenue peaking near $399,000. Hyperliquid has posted single days above $6.8 million. fomo raised $75 million in June at a $550 million valuation and had passed 625,000 users.
Everything Else Is Distraction
Max Resnick, lead economist at Solana core developer Anza, moved the argument to first principles on Aug. 11. “The only goal of the Solana foundation should be maximizing the long term value of the Solana token,” he wrote. “Everything else is a distraction. Everything that they do should be justified with respect to this ultimate goal.”
That mandate supports both sides of the kingmaking argument. A foundation optimizing for token value has a defensible reason to route capital and attention toward the architecture that captures the most fees onchain, which is close to the case Fabiano made for Phoenix. Resnick’s reply to a critic conceded the discretion: Google carries a fiduciary duty to maximize enterprise value, “they still invest in things like Waymo.”
6th Man Ventures managing partner Mike Dudas pushed back on the input. “I still think it’s unclear whether $SOL will be valued more on fees or feels long term,” he wrote.
The foundation has been through this before without resolving it. In March, Solana Foundation chief product officer Vibhu Norby answered a similar round of criticism with grant figures: $10,000 Superteam awards, $50,000 for Y Combinator-track founders, roughly $40,000 average for public-goods work, and more than 300 ecosystem companies promoted on Foundation social accounts since Jan. 1.
$SOL traded at $75.74 on Wednesday, up 1.4% on the day and inside a seven-day range of $72.30 to $77.63, per CoinGecko. It sits 74% below its January 2025 record of $293.31.
