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Hello!
This is the 50th edition of Lightspeed, and it’s a truly momentous occasion!
Beethoven didn’t write 50 symphonies. Shakespeare didn’t write 50 plays. It took the United States nearly 200 years to reach 50 states. And here we are, with 50 Lightspeed releases already — a feat accomplished at the speed of light.
Seriously, thanks to everyone who shared, corrected, served as a source, or even just read this newsletter. We are very grateful.
Venture capital shies away from high valuations
Solana continues to attract attention as SOL tokens continue to have a banner year and retail crypto users continue to play with memecoins. But while Solana may be one of the most buzzed-about crypto assets, it hasn’t led to an influx of fresh venture capital.
That’s not to say that VCs don’t like Solana. Light Protocol co-founder Sven Schäferjohann posted about a recent “tier-1” VC event where Solana’s founders were in the minority, but the founders and investors who attended said they “liked” layer-1.
Rather, it may be a matter of valuations that are too high in a bull market, Logan Jastremski, general partner at Frictionless Capital, told me. Earlier this month, Frictionless announced it had raised $20 million to invest in “high-performance blockchains,” including Solana.
“The venture market in 2023 was much better,” Yastremski explained, “because as soon as the liquid market started to pick up, everyone started stumbling into the venture market to turn around because they needed premiums that they could show to their investment partners to raise more money and show that they were good investors.”
That rollout peaked in the first quarter of 2024, Jastremski told me. As venture capitalists sought to deploy funds before the end of the bull market, valuations of early-stage startups began to rise.
“Realistically, seed rounds in 2023 were $10 million to $20 million, and now they’re $30 million to $50 million,” Jastremski said. Higher valuations limit investors’ upside, and some appear to be biding their time.
In my non-comprehensive survey of recent venture rounds, Solana startups seem to be somewhat biased toward applications over infrastructure. On the infrastructure side, there has been significant activity from Rome Protocol, which integrates some Solana capabilities into Ethereum, and restaking service Solayer, which has also raised funds.
On the app side, gaming startups like GolfN, Shaga, and Sonic have all raised funding this summer. Streaming rights marketplace SkyTrade has also announced its pre-seed round. And that’s all except the Solana Colosseum hackathon accelerator, whose recent winners have swung in favor of DePIN.
This may be due to a certain openness of Solana developers, which is encouraging new use cases. Anonymous Paradigm partner Frankie wrote over the weekend that they are “impressed by the number of things teams are trying on Solana that they haven’t tried anywhere else.”
Yastremski agreed that he sees “a lot of unusual things getting funded.” But in today’s world, where it seems like every new project is planning to launch a token, that may not be an unambiguously good thing.
“I think there are a lot of perverse incentives where you could potentially launch a token and not have product-market fit,” Yastremski said, adding that “there are probably a lot of applications that are getting funded that probably wouldn’t otherwise get funded.”
– Jack Cuban
Zero in
75%
According to Helium Mobile CEO Amir Halim, this is the amount of Telefonica mobile data that is transmitted to Helium hotspots among users connected to the Helium network.
The context here is that Helium Mobile, the Solana-based DePIN phone operator, struck a deal with Spanish telecoms company Telefonica in January. Under the deal, some mobile data from Telefonica’s network can be offloaded to Helium’s hotspots.
I couldn’t find a publicly available version of the Haleem dashboard, and Nova Labs didn’t immediately respond to a request for comment, but if the figure cited by the CEO is accurate, it could be the sort of thing other major phone companies would find attractive.
– Jack Cuban
Pulse
Solana, like much of the crypto space, has had a wild few days. Prices jumped over the weekend following bullish developments at the Bitcoin 2024 conference, with SOL peaking around $193 early Monday. The move is in line with a broader trend in the markets, driven by renewed investor interest and an undeniably positive mood from some political figures.
The network also hit a number of important milestones on Monday: Solana surpassed Ethereum in total transaction fees and MEV tips on a weekly timeframe for the first time ($25 million vs. $21 million). As Blockworks’ Dan Smith (@smyyguy) noted, “Solana validators and stakers are absolutely consuming this cycle.”
Calls for a “Solana Summer!” have been heard on social media as prices have returned to their highest since April 2024. @van00sa joked, “Once it starts, the price will move so fast you won’t be able to say ‘hawk tua!’” while @VVSDiamondsCoin exclaimed, “SOLANA HAS BROKE $190! THE BULL RUN IS HERE!” @blknoiz06 opined, “It’s going to be funny when solana goes deflationary and people realize about 500 times later than it ever was.”
As per tradition, even a mildly bullish turn in the markets seems to send hopeful holders into ultra-bullish mode, with some optimistically predicting prices above $200, $500, $1000 and beyond. @CryptoSmithyy declared, “SOLANA WILL BE THE KING OF THIS CYCLE,” while @jonbking hinted, “You don’t want to know my goal. It’s a confidence killer at this point.” Others chided their more bearish brethren, with users like @wats4tea enthusiastically saying, “Solana bears [are] We are still waiting for the “final trap” and nothing can stop what is about to happen.”
Of course, at the time of writing, the price has dropped back to $187. But between you and me, I think I might be entering my “I told you so” era again.
– Jeffrey Albus
One good DM
Message from Ian Unsworth, co-founder Kairos Research:
