How Institutions Are Moving Onchain | Catherine Gu

Danny emphasizes the significance of selecting Solana over other blockchain platforms, noting the ongoing evolution in blockchain technology and anticipating major advancements in retail and wholesale sectors over the next five years. Catherine Gu from the Solana Foundation shares her journey from traditional finance to crypto, driven by a desire to redefine financial infrastructure through technological advancements. Her background includes experience at Visa, particularly in Central Bank Digital Currencies (CBDCs), where she highlights a shift in central banks' focus from retail to wholesale CBDC activities.

Catherine discusses Solana's rapid growth and its ambition to serve as the "on-chain NASDAQ," emphasizing the importance of integrating existing financial institutions into blockchain rather than replacing traditional banking systems. She highlights the need to understand institutional perspectives to promote on-chain advantages. The recent launch of the Solana Developer Platform (SDP) aims to simplify access to Solana's infrastructure for financial institutions, offering APIs for tokenized deposits and stablecoins to facilitate payments and compliance.

Early examples of tokenization in financial institutions include money market funds and payment systems, with significant partnerships involving Mastercard and Western Union. The current emphasis is on payment integrations, with expectations for product integrations to materialize within the next 6 to 9 months, focusing on a trading module designed to support fund managers in issuing tokenized money market funds. This module aims to streamline funding, customer subscriptions, and distribution channels.

Privacy and compliance are critical areas of investment, as institutions require privacy features for on-chain operations. Solana seeks to balance privacy with the advantages of a public permissionless chain, clarifying misconceptions that compliance necessitates a private chain. Privacy is nuanced, varying by institution and product requirements, and Solana is developing zero-knowledge solutions and collaborating with ecosystem players to provide modular developer tools.

The Solana Noor programming language simplifies the creation of privacy-first applications. Traditional metrics like Total Value Locked (TVL) are deemed insufficient; instead, the movement of funds is emphasized. Collaboration with Blocks has led to the Sleights feed dashboard, which measures total application revenue and network revenue, highlighting the economic benefits for developers as key indicators of network growth. The velocity of money on Solana is notably high, with daily DEX volume averaging around $3 billion.

The conversation emphasizes the critical role of liquidity in the blockchain ecosystem, particularly for financial institutions. Solana's deep retail liquidity, attributed to its diverse use cases and successful products, makes it an attractive option for institutions seeking new distribution channels. The speakers observe a growing interest among institutions, driven by executive directives to explore stablecoins, although full adoption remains gradual. They stress the importance of regulatory clarity and the need for institutions to define clear use cases for blockchain technology.

Solana's vision of creating an "internet capital market" aims to provide financial infrastructure for billions globally. The potential for significant growth in stablecoin liquidity is highlighted, with projections suggesting Solana could capture a substantial share of the trillion-dollar market. Despite potential regulatory challenges, the speakers express confidence in Solana's resilience and the community's positive outlook during downturns, viewing the current environment as an opportunity for innovation.

The conversation also highlights Solana's growing association with meme coins, which has led to perceptions of the platform as primarily a gambling site. Concerns were raised about whether this association could hinder institutional engagement. A representative from Solana acknowledged that many institutions misunderstand the chain's focus, emphasizing that the Solana Foundation supports all forms of ecosystem growth, including meme coins.

Understanding the historical context of crypto adoption is vital, as retail users were the initial adopters of crypto, including NFTs and meme coins. Solana's network has demonstrated resilience and high performance, maintaining low gas fees compared to other platforms. By 2026, Solana is expected to be well-tested across diverse applications, with the presence of meme coins contributing to a robust retail liquidity ecosystem. The conversation noted the impact of retail trading on stablecoin balances, with speculative trading leading to increased stablecoin balances on Solana, potentially facilitating further capital influx and exploration of new financial products.