BP 2025: The Institutional Case for Solana: Multicoin Capital / Forward Industries

One of Solana's earliest institutional backers has doubled down on their conviction, declaring that internet capital markets represent one of the most important ideas in the world today—right alongside artificial intelligence. At Breakpoint 2025, Kyle Samani, founder and managing partner at Multicoin Capital, laid out a comprehensive framework for why Solana is uniquely positioned to capture this opportunity.

Summary

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As seed investors in Solana who have repeatedly rewritten their investment thesis as the asset appreciated, Multicoin Capital has once again concluded that Solana remains the best-positioned smart contract platform for global dominance. Samani's presentation articulated a vision of internet capital markets—a system where anyone can trade any asset, anywhere in the world, 24/7, using only a phone and internet connection.

The presentation moved beyond surface-level bullishness to address a fundamental question that has largely gone unanswered in the industry: what core properties does a system actually need to support internet capital markets at global scale? Samani identified four essential characteristics and explained how Solana's technological roadmap, particularly through multiple concurrent leaders (MCL) and application controlled execution (ACE), addresses each requirement in ways no other blockchain currently does.

The framework represents a significant departure from typical blockchain investment theses that focus on metrics like transaction throughput or developer activity. Instead, Samani's analysis centers on the complex intersection of global finance, regulatory sovereignty, and decentralized infrastructure—acknowledging that internet capital markets must be simultaneously global in scope while respecting regional realities.

Key Points:

Global Liquidity: Beyond Simple Cross-Border Access

The first property Samani identified is global liquidity, but his definition extends far beyond simple cross-border transactions. Using a practical example, he illustrated a scenario where a U.S. investor wants to purchase a stock that trades on three on-chain venues: a tokenized New York Stock Exchange offering, a London Stock Exchange equivalent, and a permissionless decentralized exchange like Drift.

The critical insight is that investors with proper KYC credentials should be able to tap into liquidity across all three venues simultaneously, receiving the underlying asset directly to their wallet. This represents a fundamental reimagining of how markets can function—preserving the global foundation while acknowledging that different regions will have different regulatory frameworks and trading venues. Solana's unified state machine makes this cross-venue aggregation technically feasible in ways that fragmented Layer 2 ecosystems cannot achieve.

Censorship Resistance: Proven at Scale

Samani addressed censorship resistance as a non-negotiable feature for any system powering global capital markets. Governments will inevitably attempt to restrict access to on-chain financial services, making decentralization essential. The presentation acknowledged that crypto has already demonstrated its ability to create genuinely censorship-resistant systems.

Bitcoin, Ethereum, and Solana have all proven themselves as censorship-resistant networks, with the key property being geographically distributed block producers across many jurisdictions. Currently, these networks operate thousands of block-producing nodes across more than 100 countries, making coordinated censorship practically impossible. This existing infrastructure provides the foundation for building censorship-resistant financial applications.

Credible Neutrality: The Overlooked Challenge

Perhaps the most nuanced property Samani discussed was credible neutrality—the idea that participants in different regions must perceive the system as fair and not weaponizable against their interests. While credible neutrality correlates with censorship resistance, the relationship becomes complex in real-world scenarios.

Solana currently operates approximately 1,000 block-producing nodes across 48 countries. However, with 210 countries in the world, many nations lack direct representation. More critically, even achieving one node per country doesn't guarantee perceived neutrality if that node controls only 0.01% of stake. A regulator in a smaller nation is unlikely to view such minimal representation as credibly neutral to their citizens.

This insight reveals a fundamental scaling challenge: credible neutrality is relatively easy to achieve in major financial centers but becomes progressively harder as you move toward smaller jurisdictions. Solving this requires new technical approaches beyond simply adding more validators.

Jurisdictional and Application Sovereignty

The fourth property appears to contradict the first three, which are all inherently global. Samani argued that internet capital markets must respect the heterogeneous realities of global financial regulation. Different jurisdictions have different market microstructure requirements—taker speed bumps, maker-cancel priority, maker rebates, prioritized liquidations, and countless other mechanical variations.

Examining major global trading venues across equities, commodities, and foreign exchange reveals no uniform standard for market microstructure. A single global system must somehow reconcile these differences while maintaining unified liquidity. This represents a design challenge that most blockchain systems have completely ignored.

MCL and ACE: The Technical Foundation

Samani identified two technologies under active development by Solana's core engineering team as the keys to achieving all four properties: multiple concurrent leaders (MCL) and application controlled execution (ACE).

MCL, first introduced by Anatoly Yakovenko two years ago, fundamentally changes blockchain architecture. Today, virtually all major blockchains—whether Layer 1s, Layer 2s, EVM-based, or SVM-based—operate as single-leader systems where one block producer holds a monopoly at any given moment. MCL enables multiple entities to produce blocks simultaneously.

The implications for credible neutrality are significant. If a network has 100 concurrent block producers and you control 0.1% of global stake, your effective influence equals 10% in a single-leader system. This multiplication effect allows more nodes in more places, making regulators and developers in smaller jurisdictions more comfortable trusting the global system.

ACE, introduced at last year's Breakpoint, addresses jurisdictional sovereignty. On the surface, Solana's single integrated state machine seems antithetical to supporting diverse market structures. ACE resolves this tension by allowing developers to specify custom ordering rules—maker prioritization, taker speed bumps, maker-cancel priority, custom liquidation mechanics—while remaining on one global system with unified liquidity.

This enables regulated entities like the London Stock Exchange or Hong Kong Stock Exchange to define jurisdiction-specific rules while still accessing Solana's global liquidity pool. Samani described this capability as "super underappreciated" in the current market discourse.

Facts + Figures

• Multicoin Capital was a seed investor in Solana and has repeatedly rewritten their investment thesis as the asset appreciated, most recently earlier this year
• Solana currently operates approximately 1,000 block-producing nodes across 48 countries
• There are 210 countries in the world, meaning over 75% of nations lack direct Solana node representation
• Major censorship-resistant networks (Bitcoin, Ethereum, Solana) collectively operate thousands of nodes across more than 100 countries
• MCL technology was first introduced by Anatoly Yakovenko at Breakpoint two years prior
• ACE technology was first introduced at the previous year's Breakpoint
• With MCL enabling 100 concurrent block producers, a 0.1% stake becomes equivalent to 10% effective influence compared to single-leader systems
• Both MCL and ACE are currently under active development by Solana's core engineering team
• Internet capital markets are positioned as one of the two most important ideas in the world, alongside AI

Top Quotes

"From an allocator's perspective, we think internet capital markets is really one of the most important ideas happening in the world today, up there with AI."

"Internet capital markets are global, but the world is regional."

"The more censorship resistant a system is, the harder it is for any one actor to weaponize the system against other actors."

"It's fairly unlikely that if you are a regulator in a smaller country that you're gonna look at a system in which you have 0.1 or 0.01% stake and think that's credibly neutral to the citizens of your country and jurisdiction."

"There is not one correct construction for market microstructure."

"Ethereum, maybe it's credibly neutral, it's definitely censorship resistant, it definitely provides global liquidity. But if you look at the L2s, they don't really achieve any of the first three objectives."

"We think Solana is really building the most ambitious vision for the future of internet capital markets."

"ACE really allows regulators and exchange operators, whether you're the London Stock Exchange, the Hong Kong Stock Exchange, or anyone else, to define their own custom rules while still tapping into the benefits of Solana as a global system."

Questions Answered

What are internet capital markets?

Internet capital markets describe a system where anyone can trade any asset, anywhere in the world, 24 hours a day, 7 days a week, using only a phone and an internet connection. This vision goes beyond simply putting existing markets online—it represents a fundamental restructuring of how global finance operates, enabling seamless access to liquidity across jurisdictions while respecting regional regulatory requirements. The concept implies unified global settlement with localized compliance, creating efficiency gains impossible in the current fragmented financial system.

Why does Multicoin Capital believe Solana will win the smart contract platform competition?

Multicoin Capital's conviction stems from Solana's unique ability to satisfy four essential properties for internet capital markets: global liquidity, censorship resistance, credible neutrality, and jurisdictional sovereignty. While other platforms may achieve some of these properties, only Solana's technical roadmap—particularly MCL and ACE technologies—addresses all four simultaneously. The firm specifically notes that Ethereum's Layer 2 ecosystem fails to achieve the first three objectives, while Solana's unified state machine combined with upcoming innovations positions it as the only viable infrastructure for global-scale capital markets.

What is multiple concurrent leaders (MCL) and why does it matter?

MCL is a fundamental architectural change that allows multiple block producers to create blocks simultaneously, rather than the current model where one producer holds a monopoly at any given moment. This matters because it effectively multiplies stake influence—a validator with 0.1% of global stake in a 100-concurrent-leader system has influence equivalent to 10% in a single-leader system. This multiplication enables more geographic distribution of validators, making the network more credibly neutral to regulators and participants in smaller jurisdictions who would otherwise see their representation as negligible.

What is application controlled execution (ACE)?

ACE is a technology that allows application developers to specify custom transaction ordering rules within Solana's unified system. This enables different market microstructure designs—such as taker speed bumps, maker-cancel priority, prioritized liquidations, or maker rebates—to coexist on the same network. The technology is crucial for institutional adoption because it allows regulated entities like traditional stock exchanges to implement jurisdiction-specific trading rules while still accessing global liquidity, essentially bridging the gap between regulatory compliance and decentralized infrastructure.

Why can't Ethereum and its Layer 2s power internet capital markets?

According to Samani's analysis, Ethereum's mainnet may achieve credible neutrality, censorship resistance, and global liquidity, but its Layer 2 ecosystem fails on all three dimensions. Layer 2s typically have centralized sequencers, making them susceptible to censorship and lacking credible neutrality. Additionally, liquidity fragmentation across different Layer 2s prevents the unified global liquidity pool that internet capital markets require. This architectural limitation means Ethereum's scaling strategy is fundamentally incompatible with the vision of seamless, global capital markets.

How does Solana address the needs of regulators in different jurisdictions?

Through ACE technology, Solana allows regulators and exchange operators in different jurisdictions to define custom rules for their specific markets while remaining connected to the global Solana network. This means the London Stock Exchange, Hong Kong Stock Exchange, or any other regulated venue could implement their required market structures—including specific order types, priority rules, and compliance mechanisms—without fragmenting from global liquidity. This approach respects jurisdictional sovereignty while maintaining the efficiency benefits of a unified global system.

What makes a blockchain credibly neutral?

Credible neutrality means that participants across different regions perceive the system as fair and not capable of being weaponized against their interests. It correlates with censorship resistance but extends further—even a censorship-resistant system may not appear credibly neutral to a small country with minimal stake representation. Achieving credible neutrality requires sufficient geographic distribution and stake allocation that regulators and citizens in all jurisdictions feel their interests are represented in the system's governance and operation.