Donovan Choy

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed" target="_blank" rel="noreferrer noopener">subscribe</a>.



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ORCA is up 19.6% on the week as the Orca DAO prepares to deploy its treasury assets toward a token buyback initiative.



The governance <a href="https://v2.realms.today/dao/66Du7mXgS2KMQBUk6m9h3TszMjqZqdWhsG3Duuf69VNW/proposal/7tCCK3wSWvbRcQwvSuVRgvBFDqsZRNRSB9xZLjST5tKd/overview">proposal</a>, which opened for voting last Wednesday, would see the staking of treasury assets into the Orca validator node.&nbsp;



Then the Orca Council will withdraw assets when “deemed appropriate” to conduct buybacks over the next 24 months.



As of today, Orca’s <a href="https://solscan.io/account/DWo8SNtdBDuebAEeVDf7cWBQ6DUvoDbS7K4QTrQvYS1S">treasury</a> holds 55,127 SOL ($9.9 million) and 503k USDC.



The vote for the proposal ends in about 24 hours, and is likely to pass with currently a 100% “yes” response and a 51% quorum already met.



Orca is Solana’s third-largest DEX, with about $19-20 billion in July trading volumes.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfP5yYyYHcGNpHtbtSQ_NqLzNqoJagS8KYCzZEwz6LJcjnaU1Tvh3T49hWFks2QtJul3E9JbTevgoZRebjxDI5rmbL6KPMnzwcNDfh6vtTgKduRAzPN_e4O3RuBZBfJOA7zaIhL?key=B-8owsZhO3CYf42-JzF2GQ" alt=""/></figure>



On a YTD basis, Orca has generated about <a href="https://defillama.com/protocol/fees/orca">$115 million</a> in fees.



50% of these fees go toward protocol development, while 30% are directed to the treasury wallet that fuels ORCA buybacks should the aforementioned governance proposal pass.



The remaining 20% of fees are allocated to a separate ongoing ORCA buyback initiative that will eventually go toward ORCA staking.



The Orca team told me that staking is slated for launch in September, so that’s two potential value accrual streams for ORCA token holders in the near term.



On a market cap-to-revenue basis, ORCA trades about 24% lower (7.36x) than RAY (9.63x), which may suggest some relative upside for ORCA if revenues are consistent.&nbsp;



But that’s a big if when you take into account the rise of <a href="https://lightspeed-4bed7b.beehiiv.com/p/seek-peek">prop AMMs</a> on Solana that points to an increasingly hyper-competitive and commoditized DEX landscape.



Orca isn’t resting on its laurels, though. The team also launched <a href="https://blockworks.co/news/orca-solana-token-launchpad">Wavebreak in beta</a> two weeks ago, a memecoin launchpad built on Orca’s own proprietary in-house tech stack.



Compared to your average launchpad, Orca’s Wavebreak is <a href="https://docs.orca.so/wavebreak/what-is-wavebreak?utm_source=chatgpt.com">designed</a> to be “human-first,” meaning tokens in the bonding phase are designed to be protected from sniper bots.



Outside of Solana, Orca is also the dominant DEX on the SVM-based Ethereum L2 chain, Eclipse. Orca’s Eclipse deployment has far lower usage than Solana, though — about <a href="https://defillama.com/protocol/dexs/orca">93 million</a> in July volumes vs. 20 billion on Solana.



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Lightspeed Newsletter

Orca DEX plans buybacks and token staking

Jack Kubinec

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed">subscribe</a>.



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Orca has released Wavebreak, a “human-first” Solana token launchpad.



The launchpad, which I <a href="https://x.com/whosknave/status/1945463174943138117">first</a> caught wind of earlier this month, integrates CAPTCHA with an onchain permission structure to keep bots and snipers from crowding out real humans, Orca CEO Nathan Davis told me. The move comes amid a raft of Solana DEXs releasing token launchpads — or vice versa — to compete in the memecoin-focused Solana DeFi market.



Outside of the onchain CAPTCHA, Wavebreak looks pretty similar to other launchpads on offer, with a few tweaks. One carrot Orca’s offering is daily rewards where users can earn rakebacks from a prize pool based on how much volume they trade.



Orca was launched on Solana by two Tokyo-based builders in 2021, according to the DEX’s docs. The DEX is also live on the SVM-based blockchain Eclipse.&nbsp;



During the doldrums of 2022 and 2023, <a href="https://app.blockworksresearch.com/flashnotes/orca-breaching-in-rough-seas">Orca was</a> Solana’s dominant DEX. Its market share would then come under siege by Raydium, which catapulted in usage in 2024 partly due <a href="https://blockworks.co/news/lightspeed-newsletter-raydium-volume-growth">to its popularity</a> among memecoin traders and partnership with Pump.fun.&nbsp;



Today, <a href="https://blockworks.co/analytics/solana/solana-dex-activity-2-0">Solana’s DEX sector</a> is more competitive than ever — and most of the top players, which include PumpSwap, Raydium, SolFi and Meteora, alongside Orca, have some connection to a memecoin launchpad, if they haven’t already developed one in-house.



The issue with existing memecoin launchpads, says Orca, is the proliferation of bots which buy up tokens as quickly as possible in hopes of selling at a profit. Earlier this year, one research outlet <a href="https://x.com/PineAnalytics/status/1914301091337953734">found</a> more than 50% of new Pump.fun tokens were being sniped, or purchased in the same block they were created. Such trades were profitable the vast majority of the time.



Whether this behavior is strictly bad is a matter of perspective (blockspace can be for bots, too), but it certainly does disadvantage human users.



“It&#8217;s not necessarily that other platforms themselves are intentionally malicious; many are also trying to combat this problem,” Davis explained.



There have been prior attempts to thwart snipers and bots from buying up memecoins, from anti-bot taxes to dutch auctions.&nbsp;



But Davis claims that “[o]ther implementations are exploitable by malicious users. We believe our implementation will be the first to mechanically prevent sniping, bundling, sandwiching and wash trading from being possible.”



Orca plans to host project fundraises on Wavebreak as well. DeFiTuna’s TUNA token will go live on the platform tomorrow, Davis said.



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DEXs

Orca releases Wavebreak launchpad for Solana tokens

Bessie Liu

<div id="highlights-block_63112919bdce2" class="highlights">
 <ul>
 <li>“We’re just on a lower-fee chain that functions very similar to Ethereum,” Milan Patel, head of business development at Orca told Blockworks</li>
 <li>Ethereum remains the dominant blockchain for DeFi applications with a total locked value (TVL) of $34.1 billion</li>
 </ul>
 
</div>



Orca, an automated market maker (AMM) on the Solana blockchain, has announced Wave 1 winners of its <a href="https://orcaso.notion.site/Orca-Whirlpools-Builders-Program-46c69ef251b94bb5ab360a5b6fc3f7a7" target="_blank" rel="noreferrer noopener">Whirlpools Builders Program</a>. 



The first <a href="https://cms.blockworks.co/orca-whirlpools-brings-concentrated-liquidity-to-solana/" target="_blank" rel="noreferrer noopener">version</a> of Orca was similar to Uniswap V2 — an AMM that allows liquidity providers (LPs) to facilitate trades at all prices.



<a href="https://cms.blockworks.co/orca-whirlpools-brings-concentrated-liquidity-to-solana/" target="_blank" rel="noreferrer noopener">Whirlpool</a>, a &#8220;concentrated liquidity&#8221; feature launched in March this year, is similar to Ethereum-powered Uniswap V3, where LPs can choose a price range when they deposit their tokens, Milan Patel, head of business development at Orca told Blockworks. 



Concentrated liquidity means LPs can provide liquidity at any price range — allowing them to earn greater yields and traders to transact at lower costs.



“Similar to how there’s Charm, Gamma and Arrakis [on Ethereum], we want to build something similar for us on Solana,” Patel said. “We would like to improve the usability of Whirlpools, and extend their functionality.”



And so, Orca launched its funding initiative, the Whirlpools Builders Program, to entice protocols on Solana to use its concentrated liquidity pools and find new applications. In total, $225,000 in grants were given to 11 projects, including:



<ul class="wp-block-list"><li>Tulip: a concentrated liquidity vault that reduces <a href="https://tulip-protocol.gitbook.io/tulip-protocol/lending/lending-reserves" target="_blank" rel="noreferrer noopener">divergence loss</a> and <a href="https://tulip-protocol.gitbook.io/tulip-protocol/tulip-autovaults/vault-strategy#difference-between-raydium-orca-and-tulip" target="_blank" rel="noreferrer noopener">auto-compounds rewards</a>.</li><li>Kamino: a vault that gives liquidity providers (LP) exposure to the benefits of concentrated liquidity without <a href="https://docs.kamino.finance/" target="_blank" rel="noreferrer noopener">continuous rebalancing</a>.</li><li>Investin: vaults with active liquidity provision executed by vault managers. LPs would be able to monitor activity through an interface that shows vault positions and performance charts.</li></ul>



“I think a lot of grant programs choose one protocol and give them a very large grant, but this is DeFi, everyone should get a grant and everyone should build and whoever executes the best, we will support them in getting more users. This is why we have 11 grants, even though they’re a little bit smaller,” Patel said.



Orca hopes the push to encourage builders to innovate through the Whirlpools Builders Program will bring more DeFi users to the Solana blockchain.



Currently, Ethereum remains the dominant DeFi blockchain, with total locked value (TVL) across its applications reaching <a href="https://defillama.com/chain/Ethereum" target="_blank" rel="noreferrer noopener">$34.1 billion</a> at the time of writing. 



By comparison, Solana’s TVL sits at <a href="https://defillama.com/chain/Solana" target="_blank" rel="noreferrer noopener">$1.44 billion</a>, significantly less than its rival blockchain. Uniswap currently accounts for about 16% ($5.46 billion) of the TVL on Ethereum and Orca’s existing TVL is around 6% of Solana&#8217;s ($87.92 million).



Patel reasoned the Orca team operates more like their Ethereum counterparts than most Solana developers, as everything related to the project is open source, with a mind to build out the ecosystem through a grants program.



“There are a bunch of parallels between us and Uniswap V3,” Patel said. “We’re just on a lower-fee chain that functions very similar to Ethereum.”



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blockchain

Orca is Uniswap V3 on Solana, Thanks to Open Source Code and Grants

Macauley Peterson

<div id="highlights-block_623b301d7086e" class="highlights">
 <ul>
 <li>Whirlpools promises higher returns for liquidity providers while benefiting traders with lower slippage across a selection of trading pools</li>
 <li>Today Uniswap has roughly $7.5 billion in total value locked, compared to Orca’s $350 million, according to DeFi Llama</li>
 </ul>
 
</div>



The Orca AMM DEX is launching a concentrated liquidity feature for the Solana ecosystem, dubbed Whirlpools, which debuts today, kicking off a two-week beta phase.



The basic idea of concentrated liquidity is that by allocating capital within a custom price range rather than a uniform distribution from zero to infinity, an AMM (automated market maker) can provide increased depth to handle larger volumes with far less total capital.&nbsp;



Whirlpools is designed to bring higher returns via capital efficiency for market makers while providing traders with low-slippage trades.



“It’s still anyone’s game for bringing concentrated liquidity into Solana,” Orca Co-founder Grace Kwan told Blockworks in an interview. She and her co-founder, Yutaro Mori, Orca’s head of engineering, were attracted to Solana in 2020 when FTX CEO Sam Bankman-Fried began ramping up his support for the Solana ecosystem.



“Yutaro’s superpower is always being able to find an area where we have an edge,” Kwan said. “Being able to build one of the key primitives on Solana is a great opportunity.”



In DeFi, Ethereum remains the dominant blockchain platform, with a higher TVL (total value locked) than all other blockchains combined. The DEX (decentralized exchange) world is no different, with Curve and Uniswap accounting for about $28 billion of the $122 billion in TVL.



Uniswap, which allows creation of liquidity pools for any two assets, debuted the feature of concentrated liquidity in its <a href="https://uniswap.org/blog/uniswap-v3" target="_blank" rel="noreferrer noopener">version 3</a> AMM exactly one year ago, which dramatically increased capital efficiency for liquidity providers.



With concentrated liquidity, trades involving similar assets, such as between stablecoins, can have a tiny price range. Initially, however, Orca Whirlpools will be deployed across a selection of three more volatile assets, all trading against the USDC stablecoin: MSOL-USDC, SOL-USDC and ORCA-USDC.



MSOL is a flavor of liquid staked SOL, a derivative from <a href="https://marinade.finance/" target="_blank" rel="noreferrer noopener">Marinade Finance</a>, which currently has a market cap of about $600 million <a href="https://www.coingecko.com/en/coins/marinade-staked-sol" target="_blank" rel="noreferrer noopener">according to CoinGecko</a>. ORCA is the DEX’s governance token, which was launched in August 2021 and is managed by a decentralized autonomous organization (DAO), the site’s <a href="https://learn.orca.so/token" target="_blank" rel="noreferrer noopener">token page</a> states. But more pools will be opened up following the beta phase.



One of the project’s anticipated innovations is what the team calls “community listings” — essentially the ability for anyone to create new asset liquidity pools independently — or “<a href="https://cms.blockworks.co/events/permissionless/" target="_blank" rel="noreferrer noopener">permissionless</a> pools” in crypto jargon. Orca will provide a “very simple guided experience for creating community listing pools,” Kwan said, which will be possible at far lower cost than Uniswap pools and with a much simpler process compared to current options on Solana, involving the Raydium AMM and Serum DEX.



That feature should debut in a few weeks, following the completion and publication of two security audits from Kudelski Security and Neodyme. The team developing Orca also intends to open-source the platforms’ smart contracts at that time, a step commonly seen as necessary to establish the credibility of new DeFi (decentralized finance) products.



Orca’s developers are focused on improving the user experience of an AMM, Kwan noted, referring to her previous role as an interaction designer at <a href="https://www.ideo.com/" target="_blank" rel="noreferrer noopener">IDEO</a> in Tokyo.



“I’m pretty shocked by the types of UX you see on most DeFi applications,” she said.



For instance, Whirlpools will offer “first class support for liquidity mining,” meaning that, unlike Uniswap, options to incentivize liquidity providers beyond trading fees are built into the smart contracts. Users won’t have to deposit a liquidity provider token elsewhere to receive additional rewards.



Kwan thinks the crypto-native nature of an AMM still has plenty of room for innovation. “One of the reasons why we love the AMM model is it’s so radically simple” compared to a centralized order book design, Kwan said.



“The potential has really been shown by Uniswap V3’s adoption, but we’re really just at the tip of the iceberg.”



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decentralized exchange

Orca Whirlpools Brings Concentrated Liquidity to Solana

Sam Reynolds

<div id="highlights-block_614a5ea5e016d" class="highlights">
 <ul>
 <li>Orca is one of the many DEXs that has emerged on the Solana protocol </li>
 <li>Kwan says that Ethereum’s high gas fees exclude all but the largest whales, creating a market for Solana-powered Orca</li>
 </ul>
 
</div>



Orca, a DEX powered by the Solana protocol, announced today that it had closed an $18 million Series A led by Polychain, Placeholder and Three Arrows Capital with participation by other notable names like Sino Global, Collab+Currency, Coinbase Ventures and Solana Capital.



Launched in February, Orca has consisted of a two-member team with eight contributors that come from many blue-chip and TradFi companies like Google, Amazon and McKinsey. Since Orca launched in February, it’s one of the only exchanges that has committed to launching a public governance token. Since then, the protocol has reached $750 million in lifetime trade volume, $250 million in total value locked and over 18,000 monthly unique wallets, Orca said in a release.&nbsp;



Speaking with Blockworks, Orca co-founder Grace Kwan said that Orca, one of the first DEXs to be built on Solana, will use the proceeds of the round to build a capital-efficient and user-friendly automated market maker (AMM) for the DEX. AMM’s are DeFi’s alternative to traditional order books on centralized exchanges, where liquidity is provided by users holding a liquidity provider (LP) token and pricing as well as matching done by automated algorithms.&nbsp;



Orca didn’t raise a traditional seed round prior to the series A, but rather received a development grant from the Solana Foundation to bootstrap the operation.&nbsp;



“During our user research, one of the biggest things we heard was that Ethereum’s high fees crowd out beginner users,” Kwan said. “The high fees mean that it&#8217;s only worth it to move thousands of dollars of assets at a time. This blocks out DeFi for anyone but whales.”



<div class="wp-block-image"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="400" height="400" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/GraceKwan-Headshot.jpg" alt="" class="wp-image-8391" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/GraceKwan-Headshot.jpg?w=400 400w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/GraceKwan-Headshot.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/GraceKwan-Headshot.jpg?w=150 150w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/GraceKwan-Headshot.jpg?w=257 257w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/GraceKwan-Headshot.jpg?w=261 261w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/GraceKwan-Headshot.jpg?w=219 219w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/GraceKwan-Headshot.jpg?w=80 80w" sizes="auto, (max-width: 400px) 100vw, 400px" /><figcaption>Grace Kwan, co-founder, Orca</figcaption></figure></div>



Kwan said that developing on Solana isn’t without its challenges. Initially, there was a lack of developer documentation and tooling but these are things that she and her team are seeing rapidly change. Now, working with Solana is “not much harder than developing on Ethereum if you are experienced in the core concepts of blockchain,” Kwan said.&nbsp;



Nimble DEXs such as Orca have been a subject of investor interest after Uniswap, the first and best known, <a href="https://cms.blockworks.co/are-nimble-dexs-a-threat-to-coinbase/" target="_blank" rel="noreferrer noopener">started nipping at the heels</a> of established giants like Coinbase. In March, Delta, an India-foused DEX<a href="https://cms.blockworks.co/indias-delta-closes-5m-round-token-sale/" target="_blank" rel="noreferrer noopener"> raised $5 million </a>with a small, lightweight team, and 0x <a href="https://cms.blockworks.co/pantera-capital-leads-15m-fundraise-in-dex-protocol-0x/" target="_blank" rel="noreferrer noopener">closed a $15 million round</a> in February led by Pantera Capital.



Although Coinbase’s volumes aren’t in the sights of the likes of Uniswap or Orca, for investors, the thought of a small team creating a product that can pump through billions of dollars of volume is an interesting proposition. According to CoinGecko, DEXs, as a category, average <a href="https://www.coingecko.com/en/dex" target="_blank" rel="noreferrer noopener"> $7.4 billion</a> in volume per day. After all, Orca — with its two full-time staff and eight contributors — have brought in $18 million allowing it to double or triple the size of its team and have years of runway.



Orca’s token is currently trading at $6.70, up 6.6% on-day, according to CoinGecko.



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