Solana DEX leader Orca merges with Loopscale to fund AI and defense

Orca, Solana’s top decentralized exchange, has merged with lending protocol Loopscale to form a company called Formation.

The New York company is pitching itself as credit plumbing for AI, energy, robotics and defense.

The two teams announced the deal on October 7. Loopscale laid out the terms in a merger FAQ on its documentation site. Financial terms were not disclosed.

A frontier-finance pitch backed by a $3 trillion AI bet

Formation’s message is that the industries building the next wave of physical and digital infrastructure get poor service from traditional capital markets, and it was formed to change that. Its stated targets are AI, energy, robotics and defense companies.

According to Apollo Global Management, the funding gap in the AI infrastructure will take an estimated $3 trillion in financing to fill by 2028.

Figure, Shinhan Asset Management, Superstate, R3 and Securitize were also announced as Formation’s partners in bringing digital assets to market.

Loopscale’s co-founder, Luke Truitt, who is now the CEO of the newly formed company, said, “Every major technological revolution has been paired with a financial one. We’re at an inflection point that requires capital markets to keep pace with the industries reshaping the economy.”

Orca’s liquidity meets Loopscale’s credit order book

A new asset needs both a place to trade and a place to borrow against, and that is the logic that the new company is running on.

Orca already runs concentrated-liquidity pools that it calls Whirlpools. Loopscale matches lenders and borrowers at fixed rates through an order book. It added curated lending vaults in June 2026.

Put together, an issuer can go live with trading and credit at the same time, Loopscale’s FAQ says.

In the announcement on Formation’s homepage, it was stated that Orca has processed more than 550 billion in trading volume since 2021.

Loopscale is listed with more than $150 million in deposits and over $2 billion in loans facilitated.

Orca currently has around $316.8 million in total value locked and over $8 billion in DEX volume over the past 30 days per DefiLlama data.

Mary Gooneratne, who is also Loopscale’s co-founder, is now Formation’s chief operating officer. Christopher Montagano, who joined Orca in 2022 as its chief legal officer, takes the strategy and legal brief.

A tokenized securities venue under the SEC’s Innovation Exemption

Formation also plans to operate a tokenized securities venue and to ship issuer tools inside 12 months. That plan rides on an SEC order that was released on September 17.

The regulator granted tokenized securities venues (TSV) a five-year, conditional “Innovation Exemption.” This allows qualifying venues to trade tokenized National Market System stock through permissioned automated market makers and liquidity pools without registering as exchanges.

However, the relief also comes with limits on symbols and volume. The operators must be US persons under OFAC rules and also have an opt-out for companies whose shares a venue want to tokenize without their involvement. It covers tokens backed by real shares.

ORCA holders face a rescheduled governance vote

The merger has tangled with Orca’s own governance. Its Council is scrapping an on-chain vote that was opened on October 5 and reposting the same proposal. However, the voting is now set for October 11 to October 16. It also has a two-day cool-down through October 18, according to a forum update from a Council member. 

The original vote had been due to close on October 10. The Council cited trouble letting xORCA stakers participate.

The proposal itself would cut xORCA’s share of protocol fees from 40% to 10%. It would also dissolve the Council, and shift a community treasury of 14.2 million ORCA into a team-controlled “Strategic Account” earmarked for acquisitions.

Its native token, ORCA, is trading around $2.34 having dropped by over 16% since the news came out.