Lightspeed Newsletter: Squads raises $10M amid smart accounts shift

Hey Solana peeps,

Michael McSweeney here, filling in for Jack as he finishes up his New Hampshire sojourn. 

This is probably the part where I’m supposed to mention some kind of sportsball or what-have-you. Ah yes, sportsball. The game of champions. Played by, uh, squads of people. 

Speaking of squads…

Squads raises $10M amid smart accounts shift

The digital asset management platform Squads announced $10 million in funding this morning. 

Electric Capital led the Series A round, which also drew participation from RockawayX, Coinbase Ventures, L1 Digital, Placeholder and Mert Mumtaz.

The Dubai-based firm launched in 2021 with Solana-based tooling for DAOs. It’s since pivoted more into the enterprise lane, offering features like multi-signature wallets for businesses running on Solana. 

Squads co-founder Stepan Simkin told me this multisig focus first got the company moving in the direction of smart accounts, or wallet accounts that don’t require private keys or seed phrases. Squads is continuing down that road with its new smart wallet named Fuse that promises to abstract away seed phrases. 

With the fundraise announcement, Squads released Fuse on TestFlight, an Apple venue for releasing beta versions of apps. Simkin said Squads is holding back on putting Fuse on the App Store until it’s “feature complete,” which he expects to happen in July.

Thus continues the ballyhoo around smart wallets. Last week, Coinbase debuted a smart wallet of its own. Coinbase’s company PR surrounding the wallet focused largely on its simplification of things like onboarding. 

And don’t look now, but this could all be setting up a technical arms race between two prominent Solana companies. In May, the wallet app Phantom acquired the embedded wallet provider Bitski. Phantom teased email sign-ins as part of what Bitski’s tech would enable.

Still, Simkin told me he doesn’t view Coinbase and Phantom’s offerings as competitors to Fuse — seeing his own wallet app as more of an asset vault rather than a connector to interact with other apps.

“[I]f Coinbase smart wallet and Phantom are the means of getting to a place, Fuse is the destination, it’s the ultimate savings account for your assets that you can trust with [the] majority of your digital net worth and not rely on cold wallets or CEXs,” Simkin said in a text.

— Jack Kubinec

Zero In

Source: DefiLlama

$2.7 billion

That’s how much money Solana-focused startups and projects have raised to date, according to DefiLlama data. I was curious about the total, given today’s Squads news (read above if you haven’t already). 

As shown in the chart above, Solana — like many other crypto subsectors — underwent a major jump in venture funding during the 2020-2021 bullrun. 2024 has seen some measure of return in activity, but obviously not at the same level.

A total of 165 Solana startups and projects have drawn venture capital to date. The biggest: Forte’s $725 million (Nov. 2021), Solana Labs’ $314 million (June 2021) and Magic Eden’s $131 million (June 2022). 

Thus far, February is 2024’s busiest month thus far for VCs, drawing $180 million in commitments per DefiLlama. It was also the busiest month since December 2021. 

Time to wait and see if February prove to be an outlier — or a portent of more to come.

— Michael McSweeney

The Pulse

Solana v1.18.15 is now available , with the network recommending validators adopt this upgrade to enhance performance and security. 

Solana has long faced challenges with transaction prioritization, which relies heavily on compute budget priority, leading to inefficient resource usage and cost recovery. This update addresses these issues by adding CA-certificates to the Docker image for improved security, and introduces the “clean_queue” bugfix to ensure valid transactions are processed efficiently. It also includes new ways to monitor for threshold failures and optimizations in the scheduler, which should improve the network’s overall stability and performance.

Social sentiment around this release was positive at the time of publication. 

Helius Labs CEO @mertheliushsol was one of the first to post on the upgrade, saying : “Brace yourselves, some big upgrades include the central scheduler (which should help make fees less random), different priority calculations, and better program deploys.” 

Some community members had questions, such as @defi_kay_ who asked , “Does this make higher priority fees more meaningful as compared to before?” Others expressed optimism, with users like @imranfaststart tweeting , “Fast chain go faster” and @SolusRGB simply stating , “Stoked”.

— Jeffrey Albus

One Good DM

A message from Stepan Simkin, co-founder of Squads:

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter .

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter .

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.