Solana Swaps Out Its 2020 Voting System for Alpenglow, Targeting About 150 Milliseconds to Finality

Melker opened the show by reporting that stablecoin transfers reached $891 billion in the third quarter. He said the figure is many multiples of what stablecoins handled in the past few years.

He also previewed the rest of the day's stories, including a legal problem for Coinbase in Kazakhstan and a major upgrade coming to Solana.

Melker said Solana's Alpenglow, described as the network's biggest overhaul since 2020, went live on Wednesday. He said it replaces Tower BFT, the voting system Solana has used since 2020, with a new validator voting mechanism.

The upgrade targets roughly 150 milliseconds of potential finality. Melker said Solana could previously take up to six seconds to reach finality on a transaction, which he called very fast but still slow compared with payment networks and high-frequency trading. He said the new target brings finality down to milliseconds.

Melker said the rollout followed months of testing that included a failed migration and a rollback. He also compared the finality timing with Ethereum, which he said takes multiple minutes to settle with finality.

Melker reported that Ripple supports the SEC's Regulation Crypto proposal but seeks clearer guidance on token securities and trading. He said the SEC's comment period on the rule is ending, which is why companies are now submitting comments.

Melker also reported that Chainlink, Cardano, Hedera, Avalanche, Stellar and Aptos asked the SEC to codify digital commodity status in the rules.

Melker recalled that the SEC previously sued Ripple and that Ripple won. He said the ruling gave the market its first clarity on what was and was not a security. In his account, the ruling held that the secondary sale of XRP was not a security, even though the initial offering to investors was.

Melker said that being labeled a security was once treated as a serious setback for crypto projects. He argued that being a security should not inherently be bad news, as long as projects know the rules and what the classification means for sales and offerings. He also noted that some projects still prefer to be treated as commodities and regulated by the CFTC rather than the SEC.

Melker said Ripple submitted a 20-page letter supporting adoption of the rule with some small changes. He said the requests include clearer treatment of Form TR filings and protections for exchanges and brokers that rely on them.

Melker's broader point was that the SEC and the CFTC are moving forward without the Clarity Act, and that rulemaking is advancing as comment periods close. He said the companies most affected by the rules are now providing feedback, and that this was a notable change from the previous administration.

Melker said Fidelity measured how perpetual preferred stock has funded Bitcoin purchases. He said about 135,979 Bitcoin had been bought with funding solely from these products through October 5, and that the figure is probably higher now. He noted that this is about 65% of Bitcoin's maximum 21 million supply, while also saying that millions of coins are believed to be lost, which would make the effective share higher.

According to Melker, Fidelity said more than $7 billion had been raised through these products, financing more than 95,000 Bitcoin of purchases between March and May. Melker named STRC and Strive's SATS as examples, and said Strive's new offering with a 15% fixed rate went live recently. He explained that holders of these preferred securities do not own the underlying Bitcoin, but the issuers can use the proceeds to buy more.

Melker said stablecoin transfers hit $891 billion in the third quarter, citing Coinbase and Block Pro Research, a roughly fourfold increase since 2023. He said total stablecoin market cap did not rise, and that he saw a report that Tether shrank by $1 billion through redemptions.

To explain the gap, Melker compared the activity to a $100 bill passed from person to person. He said the same money circulating more often reflects growing use.

Melker said 73% of stablecoin transfer volume occurred outside US banking hours during the study period. He said the recent snapshot put total stablecoin market cap at about $301.1 billion, down roughly 0.1% over 30 days, even as volume rose sharply.

Melker expects stablecoins and tokenized deposits to move value beyond banking hours and beyond the United States, though he said it is not clear whether the future system will rely on stablecoins, tokenized bank deposits, or institution-specific stablecoins.

Melker reported that a court barred Coinbase and five other exchanges, HTX, Bingx, Bitcoin.com, BitMart and Weex, from offering or marketing unlicensed digital asset services within the Astana International Financial Center (AIFC). He noted that the AIFC covers only certain jurisdictions within Kazakhstan, not the entire country.

Melker said the case shows that crypto companies must obtain clearance one jurisdiction at a time, comparing it to the need to clear each US state, such as New York, after federal approval.

Melker reported that Utah sued two firms for market-making on prediction-market products. He said the complaint accuses the firms of illegal gambling and of facilitating it, not just of offering contracts.

Melker said this is the first time a market maker for prediction markets has been sued, which he sees as a shift from earlier suits that targeted platforms. He doubted the case would go far, but said it shows Utah turning up the pressure.