As widely known, Solana has long harbored a dream of building a PerpDEX.

When founder Toly conceived the Solana architecture back in 2017, his goal was to create a blockchain that was "fast enough and cheap enough to run a viable order book."

Nine years later, Solana’s most successful PerpDEX to date, Drift, was hacked for $285 million, never recovering from the blow.

The abrupt demise of Drift did not shake Solana’s conviction. In the foundation’s narrative, Solana’s ultimate vision is ICM—“on-chain capital markets”—a permissionless Nasdaq where stocks, commodities, and derivatives are all migrated onto chain.

Previously, Solana essentially functioned as a blockchain incapable of supporting a high-performance PerpDEX, failing to live up to this grand narrative. But just last month, Solana’s Alpenglow consensus layer upgrade entered community validator testing. This new consensus mechanism compresses transaction confirmation time from approximately 12.8 seconds down to around 150 milliseconds—approaching the matching speed of traditional securities exchanges. Technical barriers once blocking progress are now being systematically removed.

The foundation is more determined than ever to have a “flagship” PerpDEX.

This PerpDEX is called Phoenix, developed by Ellipsis Labs.

On Solana, Ellipsis Labs is a name with significant weight. Led by Jarry Xiao and Eugene Chen, the team launched their proprietary AMM, SolFi, at the end of 2024—a trading venue without a frontend, excluding retail liquidity providers, and relying solely on market makers’ own capital for price quotes. After launch, SolFi’s trading volume surged rapidly, peaking at 60% of Solana’s total AMM volume.

Phoenix is the product of applying the same expertise to perpetual contracts. According to Ellipsis Labs, market makers can update quotes at lower cost, enabling tighter spreads and deeper order books, while traders benefit from zero gas fees.

A fully on-chain, order-book perpetual contract platform operating independently on Solana’s mainnet without reliance on any off-chain components had never been achieved before Phoenix.

The foundation clearly shares this view. Over the past two weeks, Toly and multiple foundation members repeatedly shared and commented on Phoenix, with promotional intensity visibly escalating.

However, such official endorsements sparked backlash within the community.

Other Solana-based PerpDEXs like Pacifica, Bulk, and Jupiter are doing the same thing—yet remain entirely unmentioned by the foundation.

Pacificas founder Constance expressed restraint: “Our team chose Solana in 2025 without receiving any foundation funding or raising capital from investors—we simply wanted to build a solid product first and let the market decide.” She added that people often ask whether Pacifica’s growth stems from foundation support. The answer is no. In her view, tribalism and pressuring developers to conform to specific agendas risk burning down existing bridges before new ones are even built.

Bulk’s co-founder kdotcrypto expressed regret over the foundation’s bias: “They promote what they believe benefits them most. Excluding others simply because one team meets a certain standard turns friends into enemies.”

The foundation’s logic, however, is internally consistent.

Toly’s core argument is that he favors protocols fully running on-chain and interoperable with other smart contracts—because only these generate revenue for Solana validators. PerpDEXs like Pacifica and Bulk that perform order matching off-chain, no matter how much trading volume they generate, bring zero direct revenue to Solana itself.

Solana developer Anza’s Max Resnick put it bluntly: “Pacifica to Solana is like Hyperliquid to Arbitrum—no matter how much Pacifica outperforms Hyperliquid, it brings no tangible benefit to Solana.”

Multicoin partner, a Solana shareholder, also endorsed this “brand alignment” behavior: “A chain can be neutral, but the foundation doesn’t have to be. It’s natural to concentrate limited resources on the team you believe in most.”

The underlying logic of “Solana Help” goes like this: a public blockchain operates like a mall sustained by rental fees and revenue share. Protocols fully on-chain are tenants who rent space and pay commission based on turnover. PerpDEXs that move order matching off-chain are more like companies that only list the mall’s address on their business cards—real operations happen elsewhere. Customers come through the mall’s branding, but no money stays behind.

kdotcrypto and Pacifica reject this analogy.

Bulk counters that its storefront is genuinely located inside the mall. Bulk is operated by Solana validators, sharing the same validator set as the mainnet, with 12.5% of exchange revenue distributed to Solana validators. kdotcrypto calculated that this revenue share generates far greater value than ten thousand on-chain transactions.

Pacificas Constance pointed out that users must bridge funds onto Solana to use Pacifica—this alone constitutes real network effect. Moreover, Pacifica introduced SOL as the first and only non-stablecoin collateral asset on its platform.

Toly acknowledges overlap between Bulk and validators, but insists this is merely “the same group of people doing extra work,” not a shared security model.

On the mainnet, SOL stakers can vote to enable a feature switch that forcibly alters fee rules. But on Bulk, they cannot—because revenue sharing is controlled by the operators running the exchange, and staked SOL holds no influence. While both systems share the same operators, cost efficiency does not equate to structural integration. Toly compares this relationship to the overlapping guardians of Wormhole cross-chain bridge and Solana validators: superficially the same group, but operationally independent.

Regarding validator revenue, Toly notes that the mainnet itself can generate income via destruction of base fees from high-frequency transactions—even if each transaction burns only a tiny amount, at 100,000 TPS, annual revenue reaches tens of millions of dollars.

Solana has every right to make its own choices.

It is legitimate for the foundation to allocate its limited resources toward what it believes is the correct architectural path. Blockchain neutrality does not require the foundation to treat every team equally; investing in its most favored direction is inherently defensible. Toly and Tushar are not wrong on this point.

Yet the arrogance displayed by the Solana team is another matter entirely.

Toly’s tweet referred to other Solana PerpDEX teams as enemies destined to be “drowned in infinite forks.” Foundation members repeatedly shared an unverified tweet claiming Phoenix is “six times cheaper” than Hyperliquid.

This “six times” claim holds true only on a narrowly selected trading pair—specifically Hyperliquid’s sole gold RWA contract, which disabled growth mode and thus bears full fees. On Hyperliquid’s standard crypto trading pairs, Phoenix offers only about 1.23x and 2.88x lower fees for posting and taking orders respectively. When factoring in the common practice of self-rebates, the gap narrows further.

In comparison to most HIP-3 contracts using growth mode, Hyperliquid is actually cheaper.

High-frequency trader WhiteWhale delivered a scathing assessment of Phoenix: mandatory desktop-only access, visible liquidity depth only about one-fifteenth of Hyperliquid’s, lack of advanced order types, and invitation-code-only entry.

Phoenix may not be bad—but it’s simply too early.

A product unready to handle traffic is pushed under the brightest spotlight with maximum fanfare. The damage isn’t done to Hyperliquid—it’s to Phoenix’s own reputation.

PUMP, not a native Solana team, still dominates on Solana. Pacifica, receiving zero foundation funding, remains the highest-volume PerpDEX on Solana. Real user data, voted with feet, cannot be bought with foundation marketing budgets.

Traders won’t blindly trust foundation endorsements. The winner is always the product with the best experience.

Original: BlockBeats