Stablecoin

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Helius Labs CEO Mert Mumtaz ignited a fresh round of debate inside the Solana ecosystem on September 10 after floating the idea of a Solana-aligned stablecoin whose reserve yield would be redirected to SOL via buybacks or burns—either as an “enshrined” protocol feature or, more likely, through competing digital-asset treasury companies (DATs). “Warming up to the idea that Solana should enshrine a stablecoin,” he wrote, adding that “50% burn of the yield goes back to burning SOL.” Hours later, he reframed the thrust: “it shouldn’t be enshrined, a DAT should do it… fix it and trillions.”

Why A Solana Stablecoin Is A No-Brainer

Mumtaz’s core critique targets what he describes as “yield leakage” from Solana: “Stablecoins are commodities, and currently on Solana, there is one that captures all yield and literally funds Solana’s biggest competitor with it!” He argued that, under the US GENIUS Act, stables are readily swappable and issuers will fight aggressively for market share—citing the recent “Bachelor-style” scramble among large stablecoin companies to court business. “If you don’t want to enshrine a Solana-centric stable, then consider digital asset treasury companies (DATs)… The DAT is literally a machine for buying the underlying token.”

That framing collides with the letter of the new US law. The GENIUS Act, signed in July, carves out “payment stablecoins” as neither securities nor commodities for US federal purposes, consolidating oversight largely under banking regulators and expressly separating them from SEC/CFTC jurisdiction. Multiple legal analyses and a Congressional Research Service note affirm the statute’s classification.

In short: Mumtaz’s “commodity” phrasing is rhetorical, not legal. Still, the law’s most consequential economic detail—stablecoins cannot pass interest to holders—means issuers (or affiliated structures) capture the reserve income and can decide how to use it. That’s precisely the lever Mumtaz wants pointed back at Solana.

Within hours, one builder publicly accepted the challenge. “We (@KASTcard) will put 101–103% of all interest income from USDK on Solana, to buyback SOL,” wrote CEO and co-founder of KAST, adding that the buybacks would sit with a foundation that issues a token after a planned TGE and that USDK would be issued with the m^0 foundation as a U.S. “Genius compliant” stable. The 1–3% kicker above 100% would be treated as marketing spend. KAST and m^0 have previously disclosed plans to launch programmable, application-specific dollars on the networl; KAST’s consumer app and card already target global stablecoin payments.

The proposal’s mechanics are straightforward in concept. A native USD stablecoin accrues reserve yield (e.g., from T-bills) at the issuer level; a DAT structure then commits that income stream to buy SOL on the open market and either retire it or recycle it into ecosystem programs.

Mumtaz even sketched a toy model—“Assume a Solana DAT runs a Solana stable, call it USDmanlet… [it] earns yield. The DAT takes all the yield and buys SOL with it… embed it in the ecosystem and take the yield and pump it back… or into burning SOL.”

Stablecoin Wars Reach Solana

Mumtaz’s “funding the competitor” barb is aimed squarely at USDC’s economics and Coinbase’s Base L2. Coinbase and Circle split USDC reserve income, a line item that has grown into a major revenue stream for Coinbase as stablecoin supply has rebounded; Coinbase incubated Base, an Ethereum Layer-2 that has quickly become a high-throughput venue for on-chain activity.

None of that is nefarious—USDC’s terms are clear—but for Solana purists it is strategically suboptimal to let billions in Solana-settled stablecoin activity originate issuer profits that are then reinvested in a rival’s stack. That is the “simple problem” Mumtaz says he wants to fix, whether by enshrining or (more plausibly) by market-driven competition among issuers and DATs.

Multicoin Capital co-founder and managing partner Tushar Jain agreed via X: “One of the best things about Solana’s culture is adopting good ideas from other ecosystems. Hyperliquid’s idea to encourage stablecoin issuers to buy HYPE with USDH interest is a powerful way to drive REV. Why should Circle keep all of the interest revenue from USDC on Solana?”

For now, this is only a proposal—there is no SIP or governance vote to “enshrine” anything at the protocol layer, and Mumtaz himself emphasized the market-driven DAT route. Whether the proposal takes the form of competing issuers pledging buybacks, a canonical “ecosystem stable,” or a more modular treasury program, the endgame Mumtaz sketched is unambiguous: stop leaking yield, and point it at SOL.

At press time, SOL traded at $228.

SOL surges above the 0.786 Fib, 1-week chart | Source: SOLUSDT on TradingView.com

Featured image created with DALL.E, chart from TradingView.com

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