Hi all, happy Tuesday! 

You’ve had another chance to buy bitcoin at $69,420 this morning. ETF outflows continued Monday to the tune of $484 million.

Today we look at the latest attempt to tweak SOL tokenomics with SIMD 547.

Three months into the Iran conflict, the Strait of Hormuz is still effectively shut, peace talks have stalled, and yet crude is sitting in the low-to-mid $90s. The back and forth is like a bad movie sequel, met with indifference by market observers. A chokepoint for a meaningful share of seaborne crude has been closed for a full quarter, and the price action says the market has either priced a workaround or simply stopped believing the closure will continue into the summer.

US equities remain near record highs, giving equity-linked indexes a boost, yet BTC closed -3.2% on a red day for crypto majors. Michael Saylor followed through on his earlier hint that Strategy would likely sell some bitcoin to fund its STRC dividend. The 32 BTC (or about $2.5M at a roughly $77k average) is minuscule compared to the company’s holdings, but the move erodes the myth that Saylor will never sell.

The bigger story today on the downside starts with Privacy, the worst sector on the board at -4.7%.

The week inside this index was ugly almost everywhere. Zama (ZAMA) was the lone holdout, choppy but up ~10% on the week despite a weekend scare. Last Friday, Circle froze Zama's confidential-USDC (cUSDC) pooled wrapper on Ethereum in response to a court order, sweeping up innocent Zama depositors in the process, and the ZAMA token wobbled on the headline. Yesterday the matter was resolved after the same court found its prior order unwarranted and the freeze was lifted.

The incident has renewed focus on the liability of centralized stablecoins embedded in otherwise censorship-resistant applications. We narrowly avoided a precedent that freezing onchain dollars on a court's say-so should be expected, even if it impacts innocent bystanders.

As the worst performers Monday, privacy and anti-censorship tools continue a week of weakness. Railgun (RAIL) has retraced around -50% from its May 24 high. That's a violent unwind in a name that was recently a momentum darling.

ZEC is similarly linked to the privacy narrative and has retreated 15% from its May highs, currently bouncing off the $500 level.

— Macauley

Bringing Back the SOL Burn

SOL value accrual has become a central tokenholder concern in recent months. Since SIMD 96 was activated in February 2025, the amount of SOL removed from circulation through the burn mechanism has become insignificant, even as Solana network activity remains elevated. Priority fees accrue entirely to validators, with no in-protocol mechanism for sharing them with stakers (SIMD 123 is yet to be activated on mainnet), while the remaining base-fee burn is too small to matter economically.

SIMD 547 is the latest attempt to bring back SOL burn, but with a more targeted design. Introduced by Cavey from Temporal, the proposal would add a fully burned fee based on the compute units (CUs) requested per transaction, on top of Solana’s existing base and priority fees. Rather than raising Solana’s flat base signature fee for everyone, SIMD 547 would tie SOL burn more directly to network resource consumption.

The design is intelligent because a uniform base fee hike would disproportionately affect validators and market makers, which submit high transaction volumes and often pay mostly base fees. A resource-based fee is more targeted. Market makers have already optimized oracle updates and other transactions to consume as few CUs as possible because Solana transaction ordering is based on priority fee per CU. As a result, Cavey estimates that some market maker updates would see only a low-single-digit percentage increase in fees.

Higher-resource transactions, such as retail swaps, would pay more. But Solana fees are already far below one cent, so even large percentage increases may still be nearly invisible to end users. More importantly, users already show a willingness to pay for fast and reliable execution. SIMD 547 would redirect a small portion of that willingness to pay toward SOL burn instead of letting all of it accrue to applications and transaction landing services.

To estimate the potential impact, I analyzed a stratified random sample of 10,000 Solana slots from May 1 to May 31, 2026. Solana transactions requested an average of 132M CUs per block, compared to 29M CUs consumed. At the proposed 0.1 lamport per requested CU burn rate, this would imply roughly 2,850 SOL burned per day under current activity levels, or about a 4.3% offset to daily issuance.

Of note, SIMD 547 would charge the proposed resource-based burn on requested CUs, not consumed CUs. On Solana, transactions can reserve compute upfront by specifying the maximum amount of compute they may need, even if they ultimately consume much less during execution. Today, over-requesting compute is relatively cheap. Under a resource-based burn, that inefficiency would carry an explicit cost, creating a direct incentive for applications and sophisticated users to optimize their requested compute limits

That would not make SOL deflationary. But it would represent roughly a 4x increase from today’s burn rate of approximately 700 SOL per day. More importantly, the burn would scale with both network usage and future capacity growth. If Solana moves to 100M CU blocks and eventually 200 ms slots, the mechanism could become meaningfully larger.

One important caveat: our estimates assume a conservative parameter of 0.1 lamport per requested CU. Cavey has since noted that the mechanism could reasonably be set higher, potentially up to 1.0 lamport per cost unit, which would 10x the burn estimates, and suggested 0.25 lamports as a reasonable starting point. For simplicity, we use 0.1 lamport throughout this note, but the potential burn could be materially higher depending on the final parameter.

SIMD 547 is still in the discussion stage, and it likely needs to wait until after Alpenglow to avoid increasing vote transaction costs. The 100M CU increase has also been merged but is not yet active, while 200 ms slots remain under review. The proposal would be even more impactful if paired with SIMD 411, which would accelerate Solana’s path to its 1.5% terminal inflation rate from 3.82% today. 

Together, the two proposals would improve SOL net emissions from both sides: more activity-linked burn and less new issuance. In other words, the idea is promising, but it is only significant for SOL economics if it makes it to mainnet.

— Carlos

1. The Token Transparency Framework Should Not Have Worked. But it did.

Robert Burkhart from Blockworks published a piece arguing that the Token Transparency Framework (TTF) succeeded in one of crypto’s most adversarial environments because its go-to-market strategy prioritized minimal early disclosures, safety in numbers, and gradual escalation of standards. He explains that the initial goal was to get critical mass by making disclosure feel safe for protocols, market makers, and exchanges, then use that base to roll out more ambitious standards like the B-1 filing and now the upcoming B-2 filing, which aims to clarify what growth is organic versus inorganic and surface more detailed financial and partnership disclosures. The broader point is that token markets broke trust through information asymmetry, and Blockworks is trying to rebuild that trust by creating the crypto equivalent of disclosure infrastructure — one filing at a time.

2. Babylon Trustless BTC Vault Integration on Aave V4

Babylon Labs proposed integrating a trustless BTC vault into Aave V4 so users can borrow against native BTC without relying on a traditional wrapped asset or bridge. The design would keep BTC on Bitcoin while using a constrained Aave-side representation tied specifically to this integration, with the goal of opening Aave to a large base of BTC holders who have historically avoided DeFi because of wrapper, bridge, and custodian risk. The discussion is focused on whether that model can work safely in practice — especially around fraud-proof windows, challenger incentives, collusion and liveness assumptions, loss allocation, and governance coordination between Babylon and Aave. Aave Labs said it supports moving the proposal to a Snapshot vote, framing the key question as whether this new source of BTC collateral can be added without introducing unmanaged settlement or liquidation risk.