Data & Insights: Bitwise's Record Setting ETF; Polymarket Sees Record Traders

Bitwise Stakes its Claim

• The Solana exchange-traded product market welcomed a new heavyweight on October 28 with the launch of Bitwise's BSOL, a staking-enabled ETF that has quickly dominated the space.
  • BSOL recorded the highest launch-day volume of any ETF in 2025, marking the second consecutive year where a crypto ETF claimed this distinction, following last year's Bitcoin ETF launches led by BlackRock's IBIT.
  • After its first trading week, BSOL sits at approximately $400 million in AUM, quickly overtaking Rex-Osprey's SSK at $370 million.
• The ETF's structure provides direct exposure to staked Solana, with an average annual yield of 7% for holders. Bitwise has set the management fee at 0.20%, with a promotional 0% fee on the first billion in assets for three months.
  • Staking operations are conducted through Helius Labs, a leading RPC and API provider for the Solana network. Bitwise aims to stake 100% of the ETF's Solana holdings, with rewards passed directly to ETF holders.
  • This staking model serves a dual purpose of providing attractive yields to investors while contributing to the security and decentralization of the Solana network through increased validator participation.
• While BSOL is incredibly successful, Solana ETFs are still far away from challenging the likes of Bitcoin ETFs, which saw nearly a billion in inflows in its first week.
  • The introduction of a competitively-priced, staking-enabled product from a recognized issuer appears to have unlocked significant institutional and retail demand for regulated Solana exposure. This, in turn, may incentivize other large issuers like BlackRock and Fidelity to also consider issuing a Solana ETF, ultimately making the space more competitive to the benefit of investors.

ETH Stake Entry Queue Up

• The Ethereum validator queue has continued to grow, with approximately 1.5 million ETH waiting to enter the staking system while 2.45 million ETH sits in the exit queue as validators exit.
  • The queue system exists as a rate-limiting mechanism to maintain network stability. Ethereum processes validator activations and exits at a fixed rate per epoch (approximately 6.4 minutes), preventing sudden shocks to the network's security model from mass entries or exits.
  • Validators must wait their turn in line, with current entry queue times extending several days depending on the backlog, while exits face similar delays as the network methodically processes withdrawal requests.
• Native staking represents a deliberate choice over liquid staking derivatives, despite the latter's flexibility advantages. Protocols like Lido and Rocket Pool offer immediate liquidity through tokens like stETH and rETH, allowing stakers to deploy their capital elsewhere while earning rewards.
  • However, native staking appeals to validators seeking direct control over their infrastructure, avoiding smart contract risk inherent in liquid staking protocols, and eliminating counterparty dependencies. 
  • The 32 ETH minimum requirement and technical overhead create barriers, but also align incentives for serious, long-term network participants. The decision to lock capital in native staking involves accepting withdrawal delays, exposure to potential slashing penalties for validator misbehavior, and smart contract risks in the staking mechanism itself. 
  • These trade-offs filter for participants with extended time horizons and ultimately greater conviction in Ethereum's future.
• The network has established itself as the primary settlement layer for significant economic activity, with the majority of stablecoin volume occurring natively on Ethereum and leading DeFi protocols like AAVE conducting substantial portions of their lending activity on the mainnet.
  • As institutional comfort with Ethereum grows, more participants appear willing to commit capital for extended periods to help secure the network while earning yields. The rising entry queue suggests increasing confidence that Ethereum will remain the dominant smart contract platform, making the opportunity cost of locked capital acceptable for yield-seeking participants.

Perpetually Tougher Competition

• Total trade volume for perpetual futures (perp) DEXs saw record highs of $1.2 trillion in October, nearly double the previous month’s total.
  • This push was led primarily by Lighter, Aster, EdgeX, Pacifica and ApeX, all of which saw record monthly volumes.
  • Hyperliquid was the outlier among major perp DEXs as it ended the month ~16% below its peak two months prior.
  • With this, Lighter is now the leading perp DEX on the market with a 27% share.
  • Meanwhile, Hyperliquid’s market share has fallen to just 10% at the time of writing, down from 33% just a month ago.
• Record perp DEX volumes across the board can be boiled down to two main reasons that being respective incentive programs and the 10/10 liquidation event.
  • For the former, almost every leading perp DEX is running a “points program” or similar schemes that are expected to convert into airdrops
  • There are, of course, more nuances for specific platforms beyond just simply incentive programs.
  • For example, Aster benefits from a direct distribution pipeline supported by BNB Chain and, by extension, Binance.
  • While Lighter benefits from offering zero maker/taker fees, a design that naturally attracts high-frequency volume.
  • On the other hand, October 10’s market selloff forced unwinds across long and short perps, causing liquidation engines to execute market orders at scale.
  • The aftermath of the event led to significant losses for a large number of traders, some of whom likely continued to trade at higher frequencies to “revenge trade” in an attempt to recoup their losses.
• In the next month or two, we’d expect a total perp DEX volume across the board to cool off from October’s figures, barring any further cascading liquidation events.
  • But we should also expect a higher baseline than pre-October figures, supported by ongoing incentive programs.

Everybody Predicts Everything

• Polymarket just posted over 477K active traders in October, the platform’s highest ever in a single month
  • After trending lower for most of the year, active traders jumped 48% MoM in October.
  • This number has even surpassed the prior US election peak in January 2025 of ~462K traders.
  • Both volume traded and the number of new markets on the platform also set record monthly highs in October, with the former more than doubling the previous month’s total with over $3 billion.
  • Open interest (OI) has also been grinding higher since the post-election dropoff, looking set to approach prior highs.
  • Beyond organic adoption, the spike in Polymarket’s metrics this month was likely driven by the confirmation of a POLY token and airdrop, coupled with their imminent (re)launch in the US market, as well as a potential raise at a $15 billion valuation.
  • These headlines not only pulled in new users but likely re-engaged lapsed ones and encouraged market makers and LPs to seed additional markets.
  • On the other side of the field, Kalshi also printed record high volumes with over $4.4 billion traded in October, as the prediction-market category as a whole is benefiting from a rising-tide moment.
• Record users and OI strengthen the case that prediction markets are moving from niche, single-event-driven phenomena to the mainstream.
  • As more traders trade on the platform causes tighter spreads, larger max stakes, and better price discovery, it can in turn attract higher-quality market makers and institutional bettors.
  • October’s spike looks less like a one-off and more like a step-change for prediction markets, as token expectations likely keep activity elevated in the short and medium term
  • We’d also expect episodic OI and volume spikes around major news cycles, though long-term viability will hinge on post-airdrop retention, compliance and regulations, as well as improvements in liquidity.

Big Boys Leading

• The on-chain volume on stablecoins on Ethereum, which measures the summed USD value of all stablecoin transfers, came in at $2.82 trillion in October.
  • This figure represents a 31% MoM increase and the highest ever recorded.
  • Though the monthly growth was driven primarily by the two largest stablecoins, USDT and USDC.
  • USDT’s on-chain volume for the month stood at over $895 billion, while USDC’s stood at $1.62 trillion, both higher than the prior months.
  • However, other notable stablecoins such as USDe, USDS and PYUSD, among others, failed to surpass their previous month’s totals.
• The surge in USDC and USDT volumes was likely driven by the continued scaling up of payment and payout adoptions, as more fintechs and marketplaces settle payrolls, vendor payments and customer withdrawals in stablecoins, creating repeat, high-velocity flows.
  • On-chain “points programs,” RWA yield programs and restaking strategies are also typically funded in USDC/USDT, generating bursts of transfer volume as users rotate capital.
  • Other typical stablecoin use cases, such as cross-border remittances and savings in volatile FX regimes, may have added many small but persistent transfers.
• In the long term, barring a major policy or peg shock, we see no reason for these metrics to slow down.
  • On-chain stablecoin volumes should continue to trend up as merchant payouts and cross-border use continue to expand
  • However, more of the processing may shift off Ethereum and into L2s while settlement and large treasury moves remain on Ethereum.