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Breakpoint 2025: The State of Returns on Solana

In December 2025, the global Solana community got together for Breakpoint - Solana's annual flagship event. The agenda was packed, and we heard many insightful talks and breaking news announcements from the stage. In this series, we'll recap some of the most interesting talks from Breakpoint 2025.Today we look at Solstice's Ben Naderski talk on the state of returns on the network.In financial markets, returns are the truth. Solana has quietly become the center of gravity for real, verifiable economic returns in crypto. What began as a hunt for incentives has matured into an institutional-grade return architecture: liquid staking, perps and funding markets, efficient routing, deep stablecoin liquidity, and emerging onchain RWAs—all composing a scalable yield stack.How Solana arrived here: a three-stage evolution1) 2020–2022: Subsidy-era yieldEarly yield on Solana was dominated by token emissions and short-lived incentive races. Capital was shallow and extremely mobile, bridging in to chase short-term APY differentials, then leaving when subsidies changed. Returns felt externally funded, not earned.2) 2022–2025: Durability and the rise of real revenueThat cycle purged free-money psychology. Capital began to prefer protocols with real revenue, strong audits, and transparent risk frameworks. Liquid staking emerged as the first credible chainwide passive yield source, supplying a 7–8% base plus additional yield uplift. Yield vaults stopped being simple farms and became structured, risk-rated strategies. Stablecoins got battle-tested and the cost of capital advantage deepened.3) 2025: Institutional-scale returnsToday the ecosystem defines institutional-scale returns. Trading volumes, derivatives liquidity, deep liquid staking, large stablecoin stacks, and nascent RWAs combine into a composable return superstructure that institutional and retail capital can access simultaneously.Key metrics driving Solana’s return stack$4+ billion in spot DEX volumes per day; $320+ billion in Q3 2025 spot volume$10.7+ billion total in liquid staking on Solana$1.7+ billion aggregate open interest in perps and funding markets$134+ billion in stablecoin volumes circulating on the chain$1+ billion of onchain RWA exposure beginning to flow into the ecosystemExamples of infrastructure participants include AMMs, routing layers, liquid staking providers, perps platforms, stablecoin issuers and RWA partnersThe Solana return stack: layer by layerReturns on Solana are best understood as a layered stack where each layer compounds or hedges the one below. Below are the practical layers buyers and allocators are using today.Layer 1 - Liquid staking and base yieldsNative staking yields: 7.1–7.6% APY baselineLiquid staking tokens (LSTs): typical yields in the 8.5–10.2% range, which include protocol-level upliftAdditional validator contributions can add roughly 120–180 bps to yield for high-efficiency operatorsLayer 2 - Composability, routing, and liquidity efficiencyRouting efficiencies (e.g., optimized pathing) can boost LP realized APY by 150–300 bpsAtomic arbitrage opportunities compound small bips-per-trade into substantial returns; typical per-trade capture of 5–20 bpsConcentrated AMM LP returns on SOL pairs commonly range 12–30% APY, depending on volatility and incentivesLow block-based cost pressure preserves >95% of gross strategy yield, unlike EVM gas-driven erosionLayer 3 - Perps, funding, and basis tradesFunding rates on SOL perps oscillate in a band roughly between +8% and -6% annualized, creating carry opportunitiesDelta-neutral SOL basis trades have historically annualized in the 10–18% APY range during stable funding regimesBTC/ETH funding capture on Solana shows 2–8% annualized on localized venues; cross-venue arbitrage can reach 8–15%Market-maker spreads plus rebates on high-volume pairs can deliver 20–120 bps per day on top-volume corridorsLayer 4 - Stablecoins and dollar-equivalent yieldStructured stable products that combine funding carry, LST backing, and perp hedges deliver 7–12% APYUnlevered stable vaults backed by LSTs produce 5–7% APY with lower volatilityUSDC/USDT lending markets on chain commonly offer 3–6% APY given reduced borrow frictionLayer 5 - Institutional strategy and risk-managed performanceInstitutional LST-plus-hedge strategies typically produce 8–14% APY with managed volatilityComposite portfolios that combine LST yield, ME/validator uplift, stable carry, and perp hedges have historically targeted 12–20% APY while maintaining low correlation to spot SOLWhy this matters for capital allocatorsThe architecture on Solana converts raw onchain activity into repeatable, auditable yield. That matters because institutional capital cares about durability, transparency, and risk-adjusted returns—not just headline APYs.When liquid staking becomes a chain-level risk-free reference, stablecoin depth compresses funding spreads, and perps/funding markets provide steady carry, an allocator can design portfolios that:Capture stable, repeatable carryUse hedges to control volatilityLeverage composability to repackage returns into productized, audit-friendly instrumentsReal-world examples and outcomesOn-chain teams and products already demonstrate these outcomes. Exchange and routing partners provide deep arbitrage and spread-capture, LSTs are acting as collateral and yield anchors, perps platforms offer stable funding markets, and emerging RWAs are opening new low-volatility dollars into the ecosystem.One composable native product grew to over $330 million in TVL and has delivered access to double-digit yields over a 12-month window—an example of how protocol-level design plus composability unlocks real economic returns.Where returns are likely to move nextDeeper institutional flows into structured stable products and hedged LST portfoliosRWA pathways bringing low-volatility, onchain capital at scaleMore sophisticated risk-rated vaults and audited leverage loops that expand the investable universeContinued compression of funding spreads as stablecoin and perp liquidity deepenPractical takeawaysThink of returns as a stack - base staking, routing and liquidity, derivatives carry, stablecoin yield, and institutional overlay.Durability matters: prioritize protocols with revenue, audits, and transparent risk frameworks.Use composability: combining LST backing with funding-capture strategies creates predictable, productizable yield.Monitor funding and basis dynamics—those markets are where scalable carry lives.ConclusionSolana’s return architecture is not a single product; it is a layered ecosystem where base yields, market structure, and composable primitives amplify each other. That composition is why institutional and retail capital can now deploy into yield strategies that are auditable, scalable, and repeatable. The most interesting evolution in finance today is the construction of internet-native capital markets—built on liquidity, composability, and transparent returns.In financial markets, returns are the truth.For allocators, the opportunity is clear: build with the stack, focus on durability, and use hedged instruments to convert onchain primitives into investable yield.Watch the full talk here: