A fight over Solana’s perpetuals market has opened into a larger public argument over whether the Solana Foundation should concentrate its support behind one likely winner or back multiple teams and leave the outcome to the market.
The debate began after Flash.Trade founder Anas Khader said on Aug. 7 that he was shutting down his Solana perps exchange. Of the three reasons he gave, the second directly pointed to the Solana Foundation. Four days later, Foundation President Lily Liu publicly rejected the label of “king making.”
At the center of the dispute is a familiar ecosystem question: when an organization controls treasury resources and commands a large audience, how should it behave in a category where several builders are competing at once? One option is to direct money, attention, and distribution toward the product it thinks best serves the chain. The other is to spread support more broadly and let market activity settle the contest.
Flash.Trade’s shutdown put the foundation at the center of the story
According to DefiLlama, Solana’s perps market processed $1.34 billion in 24-hour volume on Wednesday and had $445.11 million in open interest. Hyperliquid stood well above that, at $4.45 billion in volume and $11.21 billion in open interest.
Inside the Solana ecosystem, Phoenix — the venue Khader later identified by name — ranked fourth by 24-hour volume at $40.23 million. It trailed GMTrade at $918.05 million, Pacifica at $262.88 million, and Jupiter at $109.65 million. Flash.Trade posted $4.79 million.
Khader wrote on Aug. 7: 「The thing that hurt me personally was the sincere disregard by the folks at the foundation. It was really painful, you never expect such coldness, supporting only one team so dearly bcz it help Solana succeed in their view.」
He said he had learned of a plan to support that team “to the teeth” ahead of Breakpoint, the foundation’s flagship conference, because “Solana needs one winner, and they really do.” In the same post, he added a parenthetical caveat, saying he did not want to blame the foundation outright for the choice and describing his own reaction as emotional: he was “watching one team being crowned dearly,” which he said was also wrong of him. The Aug. 7 shutdown note did not identify the team.
Khader named Phoenix two days later. In an Aug. 9 post, he wrote that Phoenix had been doing lower volume than Flash and had to spend money just to match it, adding that the money came “directly or indirectly” from foundation grants. He did not provide evidence for that claim. The foundation has not disclosed either the recipients or the amounts tied to its perps program.
The Defiant previously reported that Flash never raised outside capital and distributed roughly $520,000 in USDC revenue share to FAF holders over its lifetime. Khader also said that if the protocol is acquired, any proceeds would be distributed pro rata to token holders, with team tokens excluded. He cited team misalignment and exhaustion from running a bootstrapped exchange as additional reasons for the shutdown.
DeFi researcher Ignas responded in even harsher terms than Khader. Replying to the announcement, he wrote: 「Solana failing to support you was obvious. Shilling shitty Pheonix which is inferior product was low.」 The original post spelled Phoenix that way.
Architectural alignment versus open competition
Solana DeFi commentator Fabiano framed the episode as a deliberate architectural choice. In his description, Phoenix runs its order book, matching engine, and market makers onchain, which directly generates activity for Solana. Flash, by contrast, priced off oracles and pooled liquidity, “making Solana primarily the settlement layer,” he wrote on Aug. 8.
Fabiano added that concentrating resources on one credible Hyperliquid challenger might make more sense from a marketing standpoint than backing several smaller protocols at once. His conclusion was blunt: it is brutal for builders, but Solana may need one clear winner in perps.
The language in the foundation’s own program points in a similar direction. Its June 1 call for fully onchain perps promised distribution, technical assistance, and capital. It also said priority would go to teams with no offchain sequencers or matching engines, genuine onchain price discovery, and protocol-level revenue routed back to Solana. Phoenix, built by Ellipsis Labs, fits those criteria. Flash did not.
Lily Liu rejects “king making” and calls for “open meritocracy”
Liu answered publicly on Aug. 10. She said everything the Solana Foundation does is meant to attract talent and capital to Solana, and that concentration cuts against both goals.
Her wording was direct: 「‘King making’ is short sighted and self limiting: it caps how much of either can form.」
She also rejected the opposite end of the spectrum. In her view, credible neutrality may sound principled and fair, and it works well for code, but it falls short when applied to humans, whose role is to exercise judgment while accepting the risk of getting it wrong. Trying to remove taste, judgment, and leadership does not eliminate human judgment, she argued. It just pushes those decisions out of sight.
Liu’s stated principle was “open meritocracy: actively facilitate competition, let the market decide. No one is bigger than the market — for capital, for talent, or for users.”
To support that claim, she pointed to two programs. One was the public perps initiative. The other was Frontier Traders, an institutional program launched on June 11 for firms that had cleared $500 million in trailing 30-day onchain volume.
She did concede an optics problem. Liu wrote that the foundation’s social media presence had not fully represented the actual diversity of support or the range of views it holds on perps, adding, “This will change.”
She also wrote: 「Entrepreneurship is a brutal battle. Most attempts fail, for all kinds of reasons. The presence or absence of RTs aren’t high on that list. Our job is to try to attract the best talent and capital to Solana to compete. The Foundation doesn’t decide who succeeds or fails — the market does.」
Yakovenko and Resnick expand the argument
On Aug. 9, Solana Labs co-founder Anatoly Yakovenko made much the same point, but with sarcasm. Responding to a report that mobile trading app fomo had flipped Hyperliquid in 24-hour revenue, he asked: 「How could they do this without Solana Foundation?」
fomo posted $2.64 million in revenue for the week ending Aug. 8, an all-time high on Solana, with daily revenue peaking near $399,000. Hyperliquid, by comparison, has recorded single days above $6.8 million. fomo raised $75 million in June at a $550 million valuation and had surpassed 625,000 users.
On Aug. 11, Max Resnick, lead economist at Solana core developer Anza, pulled the conversation back to first principles. He wrote that the only goal of the Solana Foundation should be maximizing the long-term value of the SOL token, and that everything else is a distraction. Every action, in his view, should be justified against that objective.
That standard can be used to support both sides of the argument. A foundation focused on token value has a defensible reason to route capital and attention toward the architecture that captures the most fees onchain, which is close to Fabiano’s case for Phoenix. At the same time, Resnick acknowledged discretion in how that mandate gets interpreted. Replying to a critic, he said Google has a fiduciary duty to maximize enterprise value, yet still invests in projects like Waymo.
Mike Dudas, managing partner at 6th Man Ventures, pushed back on the premise. He wrote that it remains unclear whether SOL will ultimately be valued more on fees or on “feels” over the long run.
Not the first time the foundation has faced this question
This is not the first dispute over how the Solana Foundation distributes support. In March, chief product officer Vibhu Norby answered a similar round of criticism by listing grant figures: $10,000 Superteam awards, $50,000 for Y Combinator-track founders, and roughly $40,000 on average for public-goods work. He also said the foundation had promoted more than 300 ecosystem companies on its social accounts since Jan. 1.
SOL market data
CoinGecko data showed SOL trading at $75.74 on Wednesday, up 1.4% on the day. Its seven-day range was $72.30 to $77.63. Even after that move, the token remained 74% below its January 2025 record of $293.31.
The dispute remains unresolved. What is now clear is the line that divides the two camps: whether a foundation should use limited resources to push one architecture and one product it believes best captures value onchain, or keep the field open and allow competition to run longer before the market chooses for itself.