Lightspeed Newsletter: Jupiter looks to collect a critical mass of on-chain assets, liqu..

24.05.2024

Howdy!

Memorial Day is right around the corner, and I for one am looking forward to chomping on a hot dog on a rooftop in Brooklyn somewhere.

But for now it’s a rainy Thursday, and we’re thinking about a future where everything — even perhaps my aforementioned hot dog — is tokenized on public blockchains. Shall we?

Jupiter’s grand plan to unify markets

This week, Jupiter announced its “Grand Unified Markets” initiative, which aims to bring “all assets” to Solana and index them on Jupiter.

Through an initiative like GUM, forex, stocks, real-world assets and crypto could sit in the same “state machine” and transact for fractions of a cent, Jupiter’s pseudonymous founder meow wrote on X a little while back.

Jupiter announced partners for its “GUM Alliance” that include market makers and real-world assets projects. In the next few months, Jupiter will be working with these partners to create liquid markets for more assets on Solana and integrating those markets into Jupiter, according to a post from the protocol on X.

“Anyone who’s spent significant time in DeFi knows that something like GUM is possible, and something we should aspire for,” another pseudonymous Jupiter employee wrote on X. “We want to 10x the scope in crypto.”

Jupiter is a DeFi app that offers things like swaps and limit orders. It’s also a DEX aggregator that searches across different liquidity sources to help find the best possible prices on swaps. The app already lists a large number of crypto tokens, so GUM’s novelty would likely be adding things like credit, T-bills and real estate to the mix.

Tokenizing assets so they can efficiently be swapped or moved around the world is a popular idea in crypto and among some in TradFi. BlackRock CEO Larry Fink is a tokenization fan.

Jupiter’s bet is that it could become the first venue where tokenization comes to life at scale. Because Jupiter collects fees on some of its products, there’s a business motive to build such a giant market.

The point of GUM is to create the “first unified market with [a] sufficient critical mass of assets, [liquidity] and users,” meow told me in a text.

In an email, 21.co’s Tom Wan called GUM a “brilliant” campaign to get market makers and tokenized asset issuers on the same page.

“Onboarding tokenized assets will always have a chicken/egg problem. Issuers are reluctant to tokenize the assets without liquidity, and liquidity wouldn’t pick up until more tokenized assets are launched,” Wan wrote.

— Jack Kubinec

Exclusive

Zeta Markets releases litepaper for its layer-2

You heard it here first, folks. Zeta Markets has released a litepaper for the “Zeta X” layer-2 it’s hoping to send to mainnet in early 2025.

Zeta operates a DEX focused on crypto perpetuals trading, leveraging the Solana blockchain’s high scalability and low fees to provide an improved trading experience. At a glance, building an L2 for Solana might seem unorthodox. After all, the network already boasts high scalability and low fees — features most often cited by developers when proposing new side chains for legacy networks like Ethereum.

But Zeta reps say their network aims to push the boundaries further by offering a highly customized trading experience; one that, according to Zeta representative Tristan Frizza, “competes with centralized exchanges.”

This customization will allow Zeta to optimize block space and transaction processing, delivering low-latency transactions and addressing the higher costs seen on other networks. Frizza explained that rather than building an isolated rollup, Zeta’s L2 solution will be closely integrated with Solana to tap into its growing total value locked (TVL) and liquidity. Basically, its design is akin to an appchain where transactions are low enough in latency to compete with CEX speeds. Similar offerings would be nigh impossible to build on chains like Ethereum, where transactions are often too expensive and require bundling to the base layer for efficiency.

As Zeta looks to the future, it becomes ever more apparent that the evolving DeFi landscape requires constant innovation to meet the needs of modern traders.

— Jeffrey Albus

Zero In

$54 million

That’s the combined market capitalization of Ondo Finance’s USDY and OUSG tokens on the Solana blockchain, according to data from Solscan. The two tokens are notable real-world asset-linked products that offer exposure to US Treasurys. Real-world asset-linked tokens provide a bridge between TradFi and DeFi by enabling investors to gain exposure to conventional assets like government bonds by way of digital tokens. For context, OUSG and UDSY on Ethereum have a combined market capitalization of well over $250 million, per Etherscan.

A significant amount of the portfolio backing OUSG is held in BUIDL, the tokenized fund launched by the world’s largest asset manager, BlackRock, according to Ondo.

— Jack Kubinec