$500 billion in trading volume over 5 years, $2 billion in loans over 1.5 years. Two of Solana’s veteran protocols have suddenly announced a merger. Their new name is Formation 🦖
🕐 最新解读群里更新
On October 7, two protocols in the Solana ecosystem, Orca and Loopscale, announced they were merging to form a new entity called Formation. The official goal is to provide capital markets services to so-called frontier economies such as AI, energy, robotics, and defense—in other words, to redirect decentralized lending and liquidity tools away from crypto trading and toward financing real-world industries 🤖
First, let’s look at what each brings to the table. Orca is one of the earliest decentralized exchanges on Solana, specializing in concentrated liquidity. Since launching in 2021, it has processed more than $500 billion in cumulative trading volume. Loopscale, meanwhile, is a lending protocol that has facilitated more than $2 billion in loans since April 2025. One is a gateway for trading activity; the other is a lending ledger for capital. Together, they form a complete chain from issuance to the secondary market.
The merged entity’s strategy is also clear: Formation doesn’t plan to serve only crypto-native users. It’s targeting capital-intensive industries with limited access to financing, such as AI computing, energy, robotics, and defense, and aims to connect them with on-chain credit and liquidity tools. This shift addresses a real problem: for years, DeFi has been chasing yields within its own ecosystem, while frontier industries that genuinely need capital have struggled to borrow cheaply. Whoever can bridge the two sides could capture the next wave of growth.
But it’s not that simple. Lending to industries such as AI and defense entails real credit and regulatory risks. The collateral and liquidation rules used by on-chain protocols may not translate well to the cash flows and legal jurisdictions of traditional businesses. Solana itself is also under pressure: SOL is trading at around $116, down about 3.6% over 24 hours; Bitcoin is around $83,260, down about 2.7%; and Ethereum is around $2,572, down about 4.6%. The broader market is pulling back 📉
In my view, the real significance of this merger isn’t two protocols banding together for safety. It’s that DeFi is trying to move beyond zero-sum competition within crypto and address the financing needs of the real economy. If this works, DeFi’s valuation model will need to be rewritten. If it doesn’t, this may just be another rebrand—old assets wrapped in a new narrative.
Two things are worth watching: first, which industry will receive Formation’s first real-world financing deal; and second, whether it can bridge the hard rules of on-chain liquidation with the softer credit considerations of industries such as AI and defense. If it succeeds, Formation could go from being a protocol on Solana to a financing gateway for traditional industries.
Would you trust DeFi to lend to industries like AI and defense, or do you think it will ultimately stay within its own bubble? Join the discussion in the comments.
Tap the profile picture to watch the livestream. Every day, we bring you the latest developments in crypto and DeFi—not just what’s happening, but the logic and opportunities behind the headlines 👀🚀
🕐 最新解读群里更新
On October 7, two protocols in the Solana ecosystem, Orca and Loopscale, announced they were merging to form a new entity called Formation. The official goal is to provide capital markets services to so-called frontier economies such as AI, energy, robotics, and defense—in other words, to redirect decentralized lending and liquidity tools away from crypto trading and toward financing real-world industries 🤖
First, let’s look at what each brings to the table. Orca is one of the earliest decentralized exchanges on Solana, specializing in concentrated liquidity. Since launching in 2021, it has processed more than $500 billion in cumulative trading volume. Loopscale, meanwhile, is a lending protocol that has facilitated more than $2 billion in loans since April 2025. One is a gateway for trading activity; the other is a lending ledger for capital. Together, they form a complete chain from issuance to the secondary market.
The merged entity’s strategy is also clear: Formation doesn’t plan to serve only crypto-native users. It’s targeting capital-intensive industries with limited access to financing, such as AI computing, energy, robotics, and defense, and aims to connect them with on-chain credit and liquidity tools. This shift addresses a real problem: for years, DeFi has been chasing yields within its own ecosystem, while frontier industries that genuinely need capital have struggled to borrow cheaply. Whoever can bridge the two sides could capture the next wave of growth.
But it’s not that simple. Lending to industries such as AI and defense entails real credit and regulatory risks. The collateral and liquidation rules used by on-chain protocols may not translate well to the cash flows and legal jurisdictions of traditional businesses. Solana itself is also under pressure: SOL is trading at around $116, down about 3.6% over 24 hours; Bitcoin is around $83,260, down about 2.7%; and Ethereum is around $2,572, down about 4.6%. The broader market is pulling back 📉
In my view, the real significance of this merger isn’t two protocols banding together for safety. It’s that DeFi is trying to move beyond zero-sum competition within crypto and address the financing needs of the real economy. If this works, DeFi’s valuation model will need to be rewritten. If it doesn’t, this may just be another rebrand—old assets wrapped in a new narrative.
Two things are worth watching: first, which industry will receive Formation’s first real-world financing deal; and second, whether it can bridge the hard rules of on-chain liquidation with the softer credit considerations of industries such as AI and defense. If it succeeds, Formation could go from being a protocol on Solana to a financing gateway for traditional industries.
Would you trust DeFi to lend to industries like AI and defense, or do you think it will ultimately stay within its own bubble? Join the discussion in the comments.
Tap the profile picture to watch the livestream. Every day, we bring you the latest developments in crypto and DeFi—not just what’s happening, but the logic and opportunities behind the headlines 👀🚀
