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- Could Solana Out-Lobby Ripple?
I’ve said it before and I’ll say it again: it’s truly remarkable how much this beat has shifted since I started in October. When I began, everyone was angry with the federal government, but commiserating. “The current administration hates us,” they would say. “Regulators are trying to eliminate our whole industry.”
But oh, how the mood has shifted. Now, it's everyone for themselves. Trump is pro-crypto, sure — but even his proponents are bickering online about how the president is expressing his support. Companies that were credited for generating a win for the entire industry just a few months ago are drawing the ire of other projects whose demands for legislation don’t align.
Overall, it seems we are entering a new phase of crypto policy making. Thomas Hobbes would be proud.
Solana’s New Lobbying Group Wants the $58 Billion Blockchain to Be Its Own Champion
Crypto is going through a bull market breakup. And now it's every blockchain for itself.
Miller Whitehouse-Levine left his role as chief executive of the DeFi Education Fund to become CEO of the Solana Policy Institute. Photo Credit: Solana Policy Institute
Under the Biden administration, Gary Gensler, the former chair of the Securities and Exchange Commission (SEC) was crypto’s great unifier. Seen by the industry as an overzealous regulator, he encouraged American crypto firms to band together in a shared strategy: fight his agency’s enforcement actions in court, and lobby for the passage of bills that would restrain him from doing more damage.
“When everyone faces the choice of living or dying, everyone’s on the same page: they want to live,” said Miller Whitehouse-Levine, newly-minted CEO of the Solana Policy Institute (SPI).
But that is no longer the case, explains Whitehouse-Levine, as crypto has gotten virtually everything that it could have ever wanted in the last election. It now has a pro-crypto president, a Congress that is pushing through legislation with haste, and an SEC chairman in Paul Atkins, who once consulted for some of the very crypto firms he will be regulating.
With their newfound power, different blockchain ecosystems are now shifting focus towards their own projects, where their interests don’t always align. “It’s only natural that disparate interests become more pronounced,” Whitehouse-Levine explained.
Everyone for Themself
In one prominent example, Coinbase wants a complex market structure bill more relevant for its business passed at the same time as a stablecoin bill, despite many other firms' concerns that such a bundling could delay the passage of any legislation. In the world of stablecoins, the $140 billion Tether is at odds with $45 billion competitor Circle over nuances in upcoming legislation, such as how these tokens would be regulated on secondary markets and reserve requirements governing how their tokens get collateralized.
And sometimes, projects now just want to make sure that they have their own seat at the table to address critical issues that could impact their own futures. Ripple Labs, the primary developer behind the $114 billion XRP Ledger blockchain, has ruffled feathers by using its war chest to buy its own access to President Trump and Congress. Most recently the company even seeded its own policy group, the National Cryptocurrency Association, with a $50 million grant.
“Given the amount of money [Ripple’s] spending, they’re in every single room,” a source familiar with the Solana Policy Institute’s thinking said, adding that they weren’t aware of any developers building on the XRP Ledger that Ripple Labs could be advocating for. “I don’t know what their objectives are other than perpetuating their business model [of selling XRP tokens into the market], if one wants to call it that.”
With the SPI, Whitehouse-Levine says he aims to tip the scales in favor of Solana developers, whom he says are not well represented. “Ripple's done a lot over the last 10 years and awareness of them in Washington is pretty strong. We want to make sure there's a Solana-specific voice in the conversation,” he said.
A representative for Ripple Labs did not comment on its lobbying efforts.
Solana Stretches Its Legs
Aside from the resetting of crypto’s relations with Washington, the timing is right for Solana supporters to get more active in lobbying and advocacy. The $58 billion blockchain has staged a remarkable comeback from its price collapse after the 2022 bankruptcy of crypto exchange FTX and the arrest of its most famous supporter, Sam Bankman-Fried.
Its price surged 86% in 2024 on the back of a memecoin craze that defined the industry. However, there is a lot more activity occurring on the ultrafast, albeit somewhat centralized blockchain behind these speculative tokens. Some of the high-profile development onchain includes automated staking platform Marinade, music streaming platform Audius, and decentralized exchange platform Raydium. More than $6 billion is locked up in decentralized finance (DeFi) platforms on Solana, up from $1.4 billion at the start of 2024.
“There’s a reason why memecoins happened on Solana. They happened on Solana because they could happen there,” explained Hadley Stern, chief commercial officer at Marinade. “The throughput that the Solana blockchain affords in terms of the ability to issue a token and trade it quickly, can only happen right now on Solana.”
SPI’s Funding and Leadership
The Solana Policy Institute is a 501(c)4 nonprofit, a type of organization that is not required to disclose its donors. However, three sources in the Solana ecosystem said they understood the organization to be supported with funding from the Solana Foundation. The Solana Policy Institute declined to say the amount of funding they had, which organizations had donated, and which Solana ecosystem projects would be weighing in on their decisions.
In order to achieve his mission, Whitehouse-Levine began hiring an influential team. Kristin Smith – who as CEO of the Blockchain Association was credited for growing the organization from a one-woman operation to a powerful membership org with influence that extended to the White House – will begin as president of the SPI in May. Colin McLaren, who played a key role in designing several highly influential attack ad campaigns against crypto-skeptical politicians and regulators last year at the Cedar Innovation Foundation, was recently hired as SPI’s head lobbyist.
What the SPI Actually Wants
So what does the SPI hope to achieve? Right now the issues they’re focused on, according to Whitehouse-Levine, will coincidentally still help developers of other DeFi ecosystems, like that on Ethereum.
For example, the Institute would like the regulation of secondary markets transacting with stablecoins, like cryptocurrency exchanges or lending protocols, to be left to market structure bills rather than the GENIUS or STABLE Acts moving through the Senate and House. His fear is that a stablecoin bill could force arduous AML/KYC requirements on small-time developers who incorporate these tokens into their platforms, which would choke stablecoin adoption on Solana.
Whitehouse-Levine said he would also like clearer guidelines in the bills describing how decentralized stablecoins are to be regulated, something which he says is ambiguous in the current texts and could hamper innovation if not made distinct from the reporting requirements for centralized stablecoins.
These rules are particularly important for Solana, which has a small but growing share of the stablecoin market. More than half of the $232 billion stablecoin market resides on Ethereum. By comparison, Solana only has $12.5 billion, according to DeFiLlama.
He is also concerned about forthcoming market structure legislation that could treat all crypto projects as financial applications due to the prominence of crypto trading. This could mistakenly force builders of non-financial applications into expensive and arduous compliance frameworks designed to lower financial risks they are not responsible for. Instead, a market structure bill like FIT21 should limit its focus to registrants in the markets, like custodians, dealers, brokers, or exchanges, Whitehouse-Levine argues.
But more than these immediate concerns, the SPI aims to make sure that they can advocate for the Solana blockchain without their message getting diluted or competing with the interests of dozens of other projects within prominent lobbying groups, such as the Digital Chamber or Blockchain Association (the Solana Foundation is a member of both). This could become increasingly important in the future as legislation moves forward and unknown challenges and opportunities await in the future.
In fact, Whitehouse-Levine expects many more blockchains and projects to follow his lead. When asked if he expects to see more blockchain ecosystems form their own policy organizations, Whitehouse-Levine said, “I hope so. We need the help.”
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