Orca Loopscale merger Creates Formation as ORCA Treasury Vote Nears
Orca Loopscale merger: the Solana DEX and lending platform combine as Formation to finance AI, energy, robotics and defense, while ORCA holders vote on a treasury shake-up.
- Loopscale co-founder Luke Truitt becomes Formation's CEO, Mary Gooneratne is COO and Orca's Christopher Montagano is chief strategy and legal officer, per the press release.
- Terms were not disclosed. The Block says both protocols remain the foundation of the ORCA and xORCA token network.
- Separately, an Orca governance vote that would cut xORCA staking rewards from 40% to 10% of fees and move about 14.2 million ORCA plus about 70,000 SOL to a team-run account closes on October 10.
in this block
The Orca Loopscale merger is official. Solana DEX Orca and lending platform Loopscale announced on October 7 that they are combining as Formation, a New York-based company that wants to finance AI, energy, robotics and defense, and it lands while ORCA holders are still voting on a controversial plan to hand the treasury to the team.
What actually happened
Formation plans to combine Orca's trading infrastructure with Loopscale's lending products and vaults. The pitch, per The Block: give new assets a single path from issuance to financing to trading, and eventually open access to regulated U.S. capital markets.
The numbers in the press release: Orca has processed more than $550 billion in trading volume since 2021, and Loopscale has more than $150 million in deposits and has facilitated more than $2 billion in loans. One small inconsistency: the same press release's company boilerplate says Orca has processed more than $500 billion. We report both rather than pick one.
Formation says it already works with Figure, Shinhan Asset Management, Superstate, R3 and Securitize. Over the next 12 months it plans new tools for asset issuers and new capital allocation strategies.
Both teams are OGs by Solana standards. The Block notes Orca raised $18 million in 2021 in a round co-led by Polychain, Placeholder and the now-defunct Three Arrows Capital. Loopscale, formerly Bridgesplit, raised $4.25 million that year from backers including Solana Labs and Coinbase Ventures. In August, Orca also joined a tokenized Korean won bond fund pilot with Shinhan Asset Management.
Why AI and defense?
The release cites an Apollo estimate that nearly $3 trillion will be needed for AI infrastructure alone through 2028. Formation argues that many companies in these sectors are too small or unusual for traditional deals, where fixed legal and underwriting costs favor big, standardized offerings.
"Liquidity alone isn't enough to scale an asset," Montagano said, per The Block. Truitt framed it as finance catching up with technology: every big tech revolution, he said, comes with a financial one. Bold talk for two DeFi protocols, but at least the target is specific.
The vote ORCA holders should watch
The Orca Loopscale merger did not come out of nowhere. Crypto Briefing reports that a proposal titled "Resourcing Orca for Its Next Phase" was posted on September 29 after the Orca Governance Council backed it unanimously. It would split protocol fees 10% to xORCA stakers, 10% to team-managed buybacks and 80% to operations.
It would also move about 14.2 million ORCA and about 70,000 SOL into a team-controlled strategic account restricted to acquisitions, and dissolve the Council. The proposal mentions buying an unnamed Solana DeFi protocol to add credit and yield products, which it expects to lift Orca's TVL by about 50%.
Solana Compass says the vote opened on Realms on October 5 and closes on October 10 at 19:42 UTC. It passes if it reaches 3 million Yes votes, and Solana Compass notes the page does not explain how No votes interact with that threshold. Every forum participant outside the Council opposed or questioned the plan.
Important caveat: neither The Block nor the press release says Loopscale is the protocol the vote refers to. The timing lines up, but we are not treating it as confirmed.
The price action
Crypto Briefing cites SolanaFloor reporting an 84% jump in ORCA as the plan circulated. On Kraken at 05:59 UTC on October 8, ORCA last traded at $2.712. Solana Compass showed it near $2.70, down 5.4% on the day. The rally has cooled, but it is still well above where the proposal started.
What to do as a reader
If you hold ORCA or xORCA, read the Realms proposal yourself before October 10. The trade-off is clear: less fee income for stakers now, in exchange for a team-led bet on acquisitions and a big expansion. Whether that is worth it depends on how much you trust the team with the treasury.
If you are just watching, the Orca Loopscale merger is a sign that Solana DeFi wants to become fintech infrastructure. For more on tokenized finance, see our Ondo private markets coverage and our Drift DFX claims explainer. Nothing here is investment advice.
Not financial advice. DYOR, ser.
