Santiago Santos Updates Solana Thesis: Crypto Adoption, DePIN, and Revolutionizing Finance

In a recent episode of the Lightspeed podcast, Santiago Santos, founder of Inversion Capital and co-host of the Empire podcast, joined host Jack to discuss the current state of crypto adoption, the updated Solana thesis, and the biggest opportunities in the cryptocurrency space for 2025. The conversation provided valuable insights into the evolving landscape of blockchain technology and decentralized finance, with a particular focus on Solana's growing prominence in the ecosystem.

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The Broken Funnel in Crypto Adoption

Santos began by addressing what he sees as a fundamental issue in the current crypto ecosystem: the "broken funnel" of user onboarding and retention. He pointed to the recent Trump meme coin launch on Solana as an example of this problem. While the event generated significant trading volume and brought in hundreds of thousands of new users, Santos argued that the retention of these users has been disappointing.

"We have a broken funnel in this industry," Santos explained. "If you came into this industry because you wanted to buy Trump coin, you went in through one of these exchanges, you transferred funds, it was difficult, still is on the margin, and you had a very traumatic experience."

This "traumatic" onboarding experience, coupled with the high volatility of meme coins, often leads to poor user retention. Santos emphasized that while speculative energy is important for technological revolutions, it shouldn't be the only funnel for bringing users into the crypto space.

DePIN and Stablecoins: A New Approach to Onboarding

To address the broken funnel problem, Santos proposed a new approach to user onboarding centered around DePIN (Decentralized Physical Infrastructure Networks) and stablecoins. He argued that these technologies could provide a more natural and less traumatic entry point for new users.

"That user could be buying a mobile helium plan. That user could be serviced a more comprehensive, you talk about stablecoins like yield bearing checking account, which is a checking account or a money market account," Santos suggested.

By focusing on practical, everyday use cases like mobile plans or enhanced banking services, crypto projects could potentially attract and retain users more effectively. Santos envisions a future where users are drawn into the crypto ecosystem not through speculative assets, but through improved versions of services they already use and understand.

The Power of Programmable Money

One of the key advantages of cryptocurrency technology, according to Santos, is the concept of programmable money. He believes that this feature, combined with emerging AI technologies, could revolutionize personal finance management.

"The challenge and the opportunity is when you're interacting on chain, things can break. There's risks on chain. And just communicating that to the user is important," Santos noted. He emphasized the need to strike a balance between allowing users to access powerful financial primitives and ensuring they understand the associated risks.

Santos envisions a future where AI-powered "money robots" could help users manage their finances more effectively, automatically allocating funds based on individual goals and risk tolerances. This could potentially address the issue of idle funds in traditional banking systems, where billions of dollars sit in low or zero-interest accounts despite high prevailing interest rates.

The Solana Thesis: From Skepticism to Enthusiasm

A significant portion of the conversation focused on Santos' evolving perspective on Solana. He admitted that he was initially skeptical of Solana's claims of high throughput, having seen similar promises from other projects in the past. However, his view has changed dramatically over time.

"There is no fundamentally, there was this one day, I said fundamentally, there is no reason in my opinion that Solana should not be at parity with Ethereum today," Santos stated, highlighting his current bullish stance on the platform.

Santos attributed his change of heart to several factors, including Solana's demonstrated ability to handle high transaction volumes, its capital efficiency, and the vibrant ecosystem of projects building on the platform. He now sees Solana as a leading contender in the race to become the primary blockchain for mainstream adoption.

The Future of Decentralized Finance

Looking ahead, Santos expressed optimism about the potential for decentralized finance (DeFi) to transform the traditional financial system. He argued that current banking experiences are often frustrating and outdated, leaving significant room for improvement.

"No one ever has said, I love logging into my bank account. It produces a seamless experience. It's like, it's like Amazon. It's like Netflix. Like no one has, I have never heard someone say that," Santos observed.

He believes that blockchain technology, particularly high-throughput chains like Solana, can address many of the pain points in traditional finance. By offering faster, more transparent, and more efficient financial services, crypto-based solutions could potentially attract millions of new users to the ecosystem.

Inversion Capital's Approach: Acquiring and Transforming Businesses

Santos also discussed his work with Inversion Capital, which is taking an innovative approach to driving crypto adoption. Rather than trying to convince existing businesses to adopt crypto rails, Inversion is looking to acquire businesses and then add crypto functionality.

"I want to 10x the number of active users on chain and I want to do it as quickly as possible. And I think, you know, we can go out and acquire large businesses and do that," Santos explained.

This strategy aims to demonstrate the concrete benefits of blockchain technology by showing how it can improve existing business models. Santos believes that by focusing on real-world applications and cost savings, rather than speculative investments, the crypto industry can accelerate mainstream adoption.

The Importance of Go-to-Market Strategy

Throughout the conversation, Santos emphasized the critical role of effective go-to-market strategies in driving crypto adoption. He pointed out that even excellent technology can fail if it's not marketed properly or if it doesn't effectively address user needs.

"Sometimes the best technology doesn't win. You know, Mint Mobile is an example, which is Ryan Reynolds, the actor's MVNO, you know, has gotten a lot of traction because, you know, it's Ryan Reynolds. He's a recognizable figure. People like him, you know," Santos noted.

This observation underscores the importance of not just building innovative technology, but also effectively communicating its value to potential users and partners. Santos suggested that crypto projects could learn from successful marketing strategies in other industries to improve their outreach and user acquisition efforts.

Managing Risk in Crypto Investments

Given the volatile nature of the crypto market, Santos also shared his thoughts on risk management for both individual and institutional investors. He emphasized the importance of having a clear understanding of one's risk tolerance and investment horizon.

"Optimized for mental clarity. Just assume that the asset can be volatile. It can be up and down 90%. And hurry, like go through that motion and say, okay, if this asset goes down 90%, where will I be psychologically?" Santos advised.

He also recommended studying the approaches of successful investors like George Soros, Howard Marks, and Stan Drunkenmiller to develop a robust framework for managing risk in the crypto space. By thinking in terms of probabilities and constantly reevaluating one's thesis, investors can better navigate the challenges of this rapidly evolving market.

Reviving Old Ideas in Crypto

Towards the end of the conversation, Santos touched on the potential for reviving and reimagining old ideas in the crypto space. He pointed to the prediction market space as an example, noting that while early attempts like Augur struggled, more recent projects like Polymarket have found success.

"There are categories that have been left for dead. I, the first one that comes to mind is, is gaming," Santos observed. He suggested that the initial failures of "play-to-earn" games had soured many on the potential of blockchain gaming, but that a new generation of games focusing on fun gameplay first could revitalize the sector.

This perspective highlights the iterative nature of innovation in the crypto space, where ideas that may have been ahead of their time can find success as the technology and market conditions evolve.

Conclusion: A Transformative Period for Crypto

As the conversation drew to a close, it became clear that Santos sees the current moment as a critical juncture for the cryptocurrency industry. With improved technology, growing mainstream interest, and innovative approaches to user onboarding, he believes the stage is set for accelerated adoption in the coming years.

The discussion with Santiago Santos on the Lightspeed podcast provided a comprehensive overview of the current state and future potential of the crypto ecosystem, with a particular focus on Solana's role in driving innovation and adoption. As the industry continues to evolve, the insights shared in this conversation offer valuable guidance for investors, developers, and enthusiasts looking to navigate the exciting world of blockchain technology and decentralized finance.

Facts + Figures

• The Trump meme coin launch on Solana brought in approximately 500,000 users through Moonshot.
• The Trump meme coin event generated about 100 billion in trading volume within 24 hours.
• Solana's real economic value (tips and fees) returned to pre-Trump levels on a weekly basis after the initial surge.
• Stablecoin supply on Solana increased significantly following the Trump meme coin event and has continued to rise.
• Santos estimates there are currently 38 to 60 million people actively using blockchain technology.
• Santiago Santos is the founder of Inversion Capital and co-host of the Empire podcast.
• The Lightspeed podcast was launched during a period of "despair" in the Solana ecosystem and has since grown in popularity.
• Santos mentioned that at one point, Lightspeed was more listened to than Empire, indicating growing interest in Solana.
• Inversion Capital is looking to acquire businesses and add crypto functionality, rather than convincing existing businesses to adopt crypto.
• Santos aims to increase the number of active users on-chain by 10x as quickly as possible through Inversion Capital's strategy.
• The gaming industry, both in and out of crypto, has faced challenges with user retention and profitability.
• Santos referenced successful investors like George Soros, Howard Marks, and Stan Drunkenmiller as sources of insight for risk management in crypto.

Questions Answered

What is the "broken funnel" problem in crypto adoption?

The "broken funnel" problem refers to the difficulty in onboarding and retaining new users in the cryptocurrency ecosystem. Santiago Santos explains that current onboarding experiences, often centered around speculative assets like meme coins, can be traumatic for new users due to high volatility and complex processes. This leads to poor user retention and limits the growth of the crypto ecosystem.

How can DePIN and stablecoins improve crypto onboarding?

DePIN (Decentralized Physical Infrastructure Networks) and stablecoins can improve crypto onboarding by providing more practical and less volatile entry points for new users. Santos suggests that offering services like mobile plans through DePIN projects or enhanced banking services with stablecoins can give users a more natural introduction to cryptocurrency. These use cases provide tangible benefits that users can easily understand and appreciate, potentially leading to better retention.

What is Santiago Santos' current view on Solana?

Santiago Santos has become increasingly bullish on Solana over time. He now believes that there is no fundamental reason why Solana should not be at parity with Ethereum in terms of market position and adoption. Santos cites Solana's demonstrated ability to handle high transaction volumes, its capital efficiency, and the vibrant ecosystem of projects building on the platform as key factors in his positive assessment.

How is Inversion Capital approaching crypto adoption?

Inversion Capital is taking an innovative approach to driving crypto adoption by acquiring existing businesses and then adding crypto functionality to them. Rather than trying to convince established companies to adopt blockchain technology, Santos believes this strategy can more effectively demonstrate the benefits of crypto by showing how it can improve real-world business operations and reduce costs.

What are the key risk management strategies for crypto investors?

Santos emphasizes the importance of mental clarity and understanding one's risk tolerance when investing in crypto. He advises investors to assume assets can be highly volatile and to consider how they would react psychologically to significant price swings. Additionally, he recommends studying the approaches of successful investors like George Soros and Howard Marks, thinking in terms of probabilities, and constantly reevaluating investment theses to navigate the crypto market effectively.

How does Santos view the potential for reviving old ideas in crypto?

Santos believes there is significant potential in revisiting and reimagining old ideas in the crypto space. He points to the prediction market sector as an example, where early projects struggled but more recent attempts have found success. Santos also mentions the gaming industry as an area where past failures in "play-to-earn" models could give way to more successful blockchain-based games that prioritize fun gameplay alongside crypto elements.

What role does programmable money play in the future of finance?

Programmable money is seen as a key advantage of cryptocurrency technology. Santos envisions a future where AI-powered "money robots" could help users manage their finances more effectively, automatically allocating funds based on individual goals and risk tolerances. This could address issues like idle funds in traditional banking systems and provide more personalized financial management solutions.

How important is marketing and go-to-market strategy for crypto projects?

Santos emphasizes that effective marketing and go-to-market strategies are crucial for the success of crypto projects. He notes that even the best technology can fail if it's not marketed properly or doesn't effectively address user needs. Santos suggests that crypto projects could learn from successful marketing strategies in other industries to improve their outreach and user acquisition efforts.