Tokenholder Proposal: Resourcing Orca for Its Next Phase

[Cortina]

Summary

If passed, this proposal will:

(i) update the distribution of protocol fee revenue generated by Orca’s autonomous, open-source smart contracts (the “Protocol Fees”) so that, going forward, (A) 10% funds programmatic ORCA purchases deposited as rewards into the xORCA liquid staking contract (the “xORCA Pool”), (B) 10% flows to an account managed by the initial development team (the “Team”) dedicated to open-market ORCA buybacks (the “Buyback Account”), and (C) 80% funds the Team’s ongoing development, operations, and growth of the protocol;

(ii) transfer all the ORCA tokens in the ORCA community treasury wallet (GwH3Hiv5mACLX3ufTw1pFsrhSPon5tdw252DBs4Rx4PV) (the “ORCA Treasury”) to a Team-controlled account (the “Strategic Account”), to be deployed only toward acquisitions of teams, products, or protocols;

(iii) transfer all the SOL in the ORCA community fee treasury (DWo8SNtdBDuebAEeVDf7cWBQ6DUvoDbS7K4QTrQvYS1S) (the “Fee Treasury”) to the Team for treasury management and deployment in DeFi, including validator staking, liquidity provision, and yield strategies, with all principal and proceeds remaining on the Team’s balance sheet in service of the protocol;

(iv) dissolve the Council, and move to a pure ORCA community approval structure for governance matters, paired with a more transparent semi-annual business disclosure regime; and

(v) establish a registry of identified ORCA tokenholders (“Identified Tokenholders”) to give the Team and other governance participants a direct line to the ORCA tokenholder community and clearer visibility into future governance proposals.

Description

Orca is still a startup. While the protocol has been very successful at establishing itself as a premier venue for secondary trading on Solana, staying competitive and building for where the market is going will require significant work. The protocol has processed over $530B in trade volume and has been leveraged by its liquidity providers to generate hundreds of millions in fees, and the Team has shipped the Liquidity Terminal, Adaptive Fees, Wavebreak, xORCA, and many other feature updates since ORCA tokenholders approved the sweeping April 2025 funding and tokenomics proposal. That proposal also set the initial Protocol Fee split of 20% to xORCA buybacks, 30% to the Fee Treasury, and 50% to the Team, which the Council later adjusted by raising the xORCA share from 20% to 40% and reducing the Fee Treasury share to 10% to capitalize on identified market inefficiencies at the time. Notably, ORCA holders who have participated in xORCA since launch have earned over a 65% return as a result.

Two things have changed since then.

First, the current economics do not work to scale. Half of every dollar Orca earns leaves the operating business before the Team can leverage it to scale the protocol and business with engineers, growth, audits, or partnerships. A business directing half of its revenue away from operations is a utility company, not a technology company targeting a more ambitious future for itself. Orca is in a unique position to be a marquee player in a rapidly evolving capital markets environment, but it cannot achieve its full potential on a hamstrung operating budget.

Second, a concrete opportunity has appeared. The Team has negotiated terms to acquire a leading Solana DeFi protocol to combine product lines, engineering teams, and go-to-market. The combination brings in new engineers, a credit and yield product line that Orca does not have today, a diversified revenue base that reduces dependence on spot trading volume, and approximately 50% TVL growth. Executing on it requires capital the ORCA community currently manages and the Team currently cannot access. The Council has preliminarily approved this transaction and intends to formally approve it if this ORCA tokenholder proposal is successful.

This proposal asks ORCA tokenholders to move those resources to the Team, keep meaningful ORCA buybacks in place, and simplify governance so the ORCA community can move at the speed the next phase requires. Each component is described below.

Updated Protocol Fee distribution (10 / 10 / 80)

Under the new Protocol Fee split, ORCA tokenholders retain two token staking/incentive structures funded with 20% of Protocol Fees:

• 10% continues to flow programmatically into the xORCA Pool as staking rewards, using the existing buyback mechanism.

• 10% flows to the Buyback Account. The Team will execute open-market ORCA purchases from this account at its discretion, with the same 2% of 30-day average volume daily cap the Council adopted in July 2025. Purchased ORCA will be burned, deposited into the xORCA Pool, or used for contributor grants subject to at least a one-year cliff and four-year lock.

The remaining 80% funds the ongoing operations of the Team. This brings Orca in line with a venture-stage software business allocating revenue, giving the Team a budget that scales with the protocol’s success.

Strategic Account

The ORCA Treasury currently holds approximately 14.2M ORCA. This proposal moves all of the ORCA Treasury to the Strategic Account. Every deployment from the Strategic Account requires a written summary posted to the ORCA governance forum within 14 days of close. Acquisition targets include teams and protocols that add engineering capacity, new asset classes, or distribution to Orca.

SOL treasury management

The Fee Treasury currently holds approximately 70k SOL, most of it staked in the Orca Validator pursuant to the approved July 2025 governance proposal. This proposal moves all of the Fee Treasury to Team control, which lets a single operator manage validator stake, liquidity, and yield alongside the operating budget rather than through separate governance actions for each decision.

Council dissolution

The Council has served its purpose of streamlining operations of ORCA tokenholder governance, but with the large changes needed on the horizon, we propose moving to a pure ORCA tokenholder governance approval process for the protocol. Furthermore, after implementation of the foregoing matters, ORCA tokenholder governance would be limited to proposing and approving dilution of ORCA by minting additional tokens.

Identified Tokenholder Registry

With the removal of the Council, establishing a registry of informed Identified Tokenholders will give the Team and other protocol participants a direct line to the ORCA tokenholder community so that those who elect to participate receive meaningful protocol and Team updates. After this proposal passes, a form will be shared through which ORCA tokenholders may submit their information (e.g., contact information, proof of ownership, etc.) to become Identified Tokenholders. Identified Tokenholders’ information will be kept confidential pursuant to a privacy notice delivered with the form and will only be used by the Team to communicate with Identified Tokenholders.

Objectives

This proposal seeks to:

• give the Team the operating budget and balance sheet to scale product and engineering at the pace the current dynamic DeFi market now demands as it emerges into a phase of institutionalization;

• preserve ongoing ORCA buybacks through the xORCA Pool and Buyback Account while reducing the fee burden on operations; and

• simplify governance so that the ORCA community’s remaining decisions can be made and executed quickly.

Risks

• Concentration of control: This proposal moves the majority of ORCA community assets to Team control. Mitigated by public wallets and ongoing reporting.

• Reduced xORCA yield: Cutting the xORCA allocation from 40% to 10% lowers near-term staking rewards. Mitigated by the Buyback Account (which may also feed the xORCA Pool) and by the expectation that a better-resourced Team grows the absolute fee base.

Reporting

The Team commits to a semi-annual report on the governance forum covering Buyback Account purchases (tokens, cost, average price, disposition) and Strategic Account deployments and remaining balance. The first report will cover the six-month period in which this proposal passes.

Conclusion

The April 2025 proposal gave the Team enough runway to keep building and growing the fee base of the protocol. This proposal finishes that work. It puts Orca’s balance sheet where the operators are, keeps buybacks flowing to tokenholders, and funds a combination that gives Orca engineers, products, and revenue lines it would otherwise take years to build. We are asking ORCA tokenholders to support the Team with the flexibility and resources required to run Orca like the business it can, and must, become.

By passing this proposal, ORCA tokenholders request Orca Foundation, its Board of Directors, and the Council to take any and all actions they deem necessary or appropriate to implement each component of this proposal, including amending the Bylaws, restructuring the business, and authorizing the transfers described above.

Council Discussions and Approval

This proposal was discussed during the Council meeting convened on 24 September 2026. All Council members unanimously voted in favor of this proposal and endorsed the submission of it for an on-chain tokenholder vote.

Governance Process

Forum Discussion

This proposal will be posted here for a discussion period of at least 4 days before it is formally put to a tokenholder vote. This period allows community members to review the details of the proposal and share feedback.

Voting

After 4 days, a Council member may submit the proposal using their Council Token to the Contracts Governance account (4rxdK…6WNGt). The account contains the following voting parameters:

• Voting Period: 5 days

• Tokenholder Threshold: 3,000,000 ‘yes’ votes

• Veto Threshold: 4 Council votes

• Cool-down Period: 2 days

Execution

If the proposal passes and the veto threshold is not met during the cool-down period, its contents will be implemented by Orca Foundation, its Board of Directors, and the Council in accordance with Article 4.3 of the Bylaws, including through any amendments to the Foundation’s governing documents required to effect the Council dissolution.

[chmelevsky]

This proposal seems to be very harmful to current Orca holders in multiple ways.

First of all, Orca is, amongst other use-cases, a governance token. Hence, its’ ability to cast a vote on the future of a protocol is a big part of its’ value. As far as i see it, this proposal practically eliminates Orca governance utility by dissolving the Council and limiting the set of topics on which tokenholders can vote to only dilution. This isn’t governance. This isn’t real utility.

Second, spending up to 14.2 million (nearly 20% of total supply) of Orca tokens on acquisition of other projects might and will create immediate sell pressure even without possible dilution. Even if cliffs and vestings are applied. And the buyback speed/volume is reduced at the same time to counter that.

Third, there is now a possibility of a future dilution in itself and the team has 20% of supply to vote for it and do whatever it wants with the newly created supply.

Fourth, the staking rewards will be slashed by a factor of 4. Buybacks that are mentioned in the proposal have not really happened, please correct me if I’m wrong. Why exactly they will happen in the future if the same approach (i.e. buybacks are discretionary in timing and volume) is adopted?

Fifth, how exactly does the team intend to keep the holder list up-to-date? What happens in case of transfers and many other scenarios?

So, the Council is dissolved. The team manages all tokens, including 70k SOL and 20% of Orca supply, as it wants, and doesn’t consult with holders, only informs them twice per year. Also, the team will be able to enforce dilution to opportunistically purchase/acquire other projects at expense of long-term holders. This happens when xOrca yields drop to 10-15% p.a..

I honestly don’t see any good news for existing token holders. Except for the promise (not even a specific plan) for growth. What I see several red flags for the token’s future in this proposal, and zero green

[Cortina]

Hi, thanks for the engagement. Going through your post to hopefully provide some clarity. While the initial proposal was a collective effort, this response reflects my views and may not represent those of other members of the council.

1. I believe the governance council has been useful for Orca since it was put in place but we should also recognize that there is a cost associated with compensating the governance council with ORCA tokens. It is unrealistic for every tokenholder to be informed and provide input so a governance council is one method for representing the views of tokenholders. The above proposal is coming from your governance council saying to tokenholders that we think this is the best path forward. Important: mint is still controlled by governance and would need tokenholder approval.

2. Any usage of the Strategic Account will be structured to not create any immediate sell pressure, e.g., token consideration would be subject to long-term vesting schedules and/or contingent on performance milestones. Ultimately the market will either be very excited about what these tokens are being used to acquire or the market will not like the deals. I am sure you can imagine that there are good reasons that we aren’t able to provide more information about acquisitions before they’re formally announced.

3. I do not believe this is a fair representation of the incentives, nor does it consider the long-term strategy of the protocol. The governance council thinks this is critical for continued meaningful value creation of the protocol in an increasingly competitive landscape. We are not thinking of short-term token price appreciation, but rather long-term sustained material value creation, which is in the best interest of ORCA tokenholders. That is why the members of the ORCA Governance Council unanimously approved submitting this proposal for an ORCA tokenholder vote. Furthermore, I again want to highlight that we are talking about existing treasury tokens; no new ORCA is minted, and any future minting would still require a tokenholder vote. Tokens used for an acquisition will be subject to long-term vesting and/or performance milestones to moderate market impact and ensure the target team is incentive-aligned with ORCA tokenholder value creation.

4. Buybacks have happened. Approximately 70% of the funds provided for ORCA buybacks have been successfully deployed through a variety of avenues to ensure efficient execution. Approximately 3M USDC remains in the buyback account.

5. The registry is voluntary. It gives the team a way to reach engaged holders with protocol updates and context on governance decisions. Anything material will still be shared publicly.

Regarding the reduced staking rewards: Every company/protocol etc. has to land at an appropriate balance of near-term rewards/incentives with investing in long-term growth given its lifecycle stage, submarket dynamics, and macroeconomic conditions. We believe the opportunities ahead are compelling enough that we should be investing in Orca’s future rather than constraining resources with aggressive buybacks. Nothing is guaranteed. I believe the opportunity is worth the risk.

[CouncilSecretary]

The tokenholder vote on this proposal is now live on Realms: Tokenholder Proposal: Resourcing Orca for Its Next Phase | Orca

Voting period ends: 10 October 2026, 19:42 UTC

Cooldown period ends: 12 October 2026, 19:42 UTC

As set out in the proposal and in Articles 4.1.2 and 4.1.3 of the Bylaws, the proposal passes if it reaches the tokenholder threshold of 3,000,000 “yes” votes during the 5 day voting period. If it passes, it cannot be implemented during the 2 day cooldown period. Unless the Council veto threshold is met before the cooldown period ends, it will then proceed to implementation in accordance with Article 4.3 of the Bylaws.

[Liege]

The idea of acquisitions and disbanding of the Council might be expected. However, Xorca yields that are better than the competition is what draws investors and they were coming in, in fact as soon as they became aware of the superior yields. So, keep the staking rewards at the 40% and the team can keep 60%, the rest is abhorrent, if you need treasury funds for an acquisition, then only that portion needed for the acquisition should be released and returned if no acquisition follows.

I’ll post shortly what my AI thinks about the proposal, I feel similar.

[RKingMidas]

Long term holder. Thousands of XORCA held.

1st. This proposal is attrocious. Why not state the financials of the company you’re trying to aquire and let the tokenholders decide if its a good use of OUR FUNDS. Blockchain was built with the idea of transparency in mind.

2nd Still atrocious. In the Age of AI, get off your lazy butts and compete. You want a lending platform. Then build it. You have the traffic to build and grow it. We don’t know if the other company is even making money. why not start with that in your proposal. We’re not imbeciles. Put me on the team with a Claude 200$ plan and I will add everything you need. for free in a month. Defi trading like hyperliquid, lending, margin, etc.

3rd: What is up with this voting mecanism. 3m yes votes? what if theres 3m yes votes and 5m no votes? does proposal get denied?

4th Believe in yourselves like Hyperliquid. Put your head down and put 99% of fees to burn if you have the balls and conviction and faith that we have in you or did have in you if this proposal passes. Set impossible vesting goals like Elon Musk if you’re true competitors and not just jokers.

5th This proposal/ask is still atrocious. It scream lazy and instant gratification like most penny stock schemes in the stock market. Believe in yourselves. Believe in the future.

6th this proposal is disgusting. Spend nothing. PAy yourselves the bare minimum if you believe in this project. The only thing you should be spending on is AI usage. I’ve seen this toxic financing structure play out a million times in stocks and crypto. It always leads to 0 for the token holders.

Elon musk is living in a box and here you are asking for an additional 6m a year… Crazy. It’s making me ask the question like do you want to win at all??? Capitalism is not a game, its a competition of the fiercest who can use finances and reourses the best. You are failing yourselves and the community.

What do you think drove us all to XORCA, the small team and proposals inching towards a higher burn rate and the growth of the burn. We cannot determine the worth of this acquisition with your lack of transparency.

I think I speak for 90% of ORCA holders who will not stick around and have our money played with by shysters

[RKingMidas]

Claude reworded:

Follow-up with specific questions, since voting closes Oct 10:

1. Name the acquisition target, or at least its revenue, profitability, TVL and the price. Tokenholders should vote on the deal itself. Handing over 14.2M ORCA and 70k SOL, with a report 14 days after closing, is not a vote.
2. How do No votes count? The forum says it passes at 3,000,000 Yes. If there are 3M Yes and 5M No, does it pass? On-chain, Yes and No are set up as separate options.
3. xORCA holders can’t vote. The docs promise xORCA “boosted voting power,” but only deposited ORCA counts, and unstaking takes 7 days, longer than the vote. The holders losing 75% of their rewards are shut out. Extend the vote or let xORCA count.
4. Publish an itemized budget for the 80%. The last numbers, from January, were about 42 staff and $11M a year.
5. Split this into separate votes: the fee split, the treasury transfer and dissolving the Council.
6. Add an end or review date to the 10/10/80 split, and keep a tokenholder vote on the fee split.

xORCA holders backed this project because of a small team and a growing burn. This proposal reverses both without the transparency to judge it.

[Pixeltoy]

I think @RKingMidas has written some extremely valid points. My vote is NO but I cannot vote because I have xOrca and the voting platform on Squads does not recognize my holdings!

Added to what RKing has written, a social media post caught my eye: “this is one of the most insane things I’ve seen in crypto, a whale withdrew $3.8M from bybit and started TWAP’ing ORCA for 3 days straight, pumping it 65% another one bought $1M in the same period. Both staked their full amounts. No idea what’s happening, but I assume something big is coming for @orca_so”

Tends to happen before a big exploit or it’s just obvious insider trading.

My vote is NO.

[tonyY]

I see the community user replies valid and solid. Is any of the suggestions going to be taken into account, or not? given only 3 days left to the proposal, and apparently not many are paying attentions right now.

[RKingMidas]

I Doubt it. I believe the voting is an illusion of democracy. They can pass whatever they want as long as they get 3m yes votes…

Regardless, of the number of no votes.

No 1 from the team has clarified this yet…

[Liege]

Basically it seems the team will drop 3 million ‘Yes’ votes themselves and declare a victory and take the treasury.

[Cortina]

Voting Timeline Update

Update: new on-chain vote opening October 11

Thanks to everyone who has weighed in. We understand the concerns about xORCA holders’ ability to vote, and since we weren’t able to extend the live vote on Realms, we’re cancelling the current on-chain vote and re-posting the same proposal for a new vote, so that all tokenholders who wish to participate have the opportunity to do so. xORCA holders who want to vote can unstake, which takes 7 days, so please start right away, or swap into ORCA on the secondary market at any time before voting closes.

Updated timing: Voting will open on October 11 at approximately 10am ET and close on October 16 at approximately 10am ET, followed by the 2-day cool-down through October 18 at 10am ET.

Vote mechanics: To pass, the proposal needs at least 3,000,000 ORCA voting Yes and more Yes than No votes. During the cool-down, the proposal can’t be implemented and the Council can veto it.

Burn: There is no ongoing burn in the current tokenomics. The April 2025 proposal included a one-time burn of 25% of total supply. Under this proposal, ORCA purchased through the Buyback Account may be burned, added to the xORCA Pool, or used for contributor grants.

The acquisition: As announced on October 7, 2026 at 6 pm ET, Orca has merged with Loopscale: https://www.theblock.co/news/defi/2026-10-07-solanas-orca-merges-with-loopscale-push-to-finance-ai-robotics-defense-417924. Specific deal terms remain confidential under the definitive agreement, and Strategic Account usage will be reported as described in the proposal.

Your feedback: The points raised on reporting and transparency will shape how we implement the proposal, including the first semi-annual report.

[Liege]

I’ll add, you’ll now need 4 times more money to retire with, as APR is going to drop by 75%. Just when you bought close to the bottom and think you have found the jackpot with APR to retire, they always have to pull the plug. Not to mention the ‘point earners’ at Loopring expecting a large portion of our treasury being airdropped to them. No more worthwhile APR and airdrop dumpers that will dump all they got for free… I’m glad I dumped 75% of my holdings at $3 after reading this proposal. I’ll only buy back if the proposal doesn’t pass.

[RKingMidas]

I appreciate that post. But there are tax consequences to swapping I would love to avoid. Development of an all inclusive voting platform with fair weightings for XORCA holders should be a main concern.

2nd. I appologise for my intense language. It’s just that I believe in this project/team, so much it hurts when I see a move that potentially weakens long term outlook. I was getting ready to invest 6 figures + USD with the previous burn mechanics

3rd. If you dying for capital bad, why not sell covered calls like on your solana. Estimates on yield are 840k-1.24m annually based off the 70k sol in treasury on yearly covered calls at the 200$ strike(Extremely otm). Many companies are monetizing their treasuiries. Mara, Metaplanet, Gamestop, CleanSpark.

4th. I would actually be in favor of converting all of the ORCA treasury to solana and use the Covered Call method to monetize the rest of the treasury (14.2m orca), 35-45m at last few days prices is 3.5- 6.75m in annual premium income far out of the money at a 200$ strike. This money could be used to fund operations/Aquisitions when needed and to burn/back XOrca when surpluses exist as well on the discretion of the team.

5th. I believe a good goal to keep all our motivations in sync would be to vest some earnings. I believe burn line should be going the other way(up as a percentage ratio). Regardless, a good compromise for now would be 30% burn programmed automatically, 10% for treasury/grants. 10% vested for the team unlocked upon completetion milestones (program revenue maintained at new highs for 2-3Qs in a rowe, YOY, Ex.) and 50% for operations.

Treasury should be beefed up. Burn should be beefed up. These are the rules of war

This is the most fair and logical arrangement. Everything else, is conjecture.

I am open to pm from the Devs if any advising or consulting is needed for free. Just waiting for a reach out.

Pete

MBA

Finance

[tonyY]

Thanks to taking the communities reply seriously and I see things are going into a better track. According to the original proposal, the treasuries are going to be spend for acquiring another lending blockchain, which is loopscale. In the news, published, it says “Orca and Loopscale have merged and going to be called Formation, and led by Loopscale CEO”. This is contradicting to an acquirement deal, isn’t it? If it’s an merge, why only Orca’s treasuries and xOrca’s holding interests are impacted. What about Loopscale? Does anyone know what they’re paying for the merge or interests that are losing.

[CouncilSecretary]

The tokenholder vote on this proposal is now live on Realms: Tokenholder Proposal: Resourcing Orca for Its Next Phase | Orca

Voting period ends: 18 October 2026, 18:38 UTC
Cooldown period ends: 20 October 2026, 18:38 UTC

As noted above, the previous on-chain vote was cancelled on 8 October 2026 in response to community requests to postpone the vote. Votes cast in the cancelled vote do not carry over, so tokenholders who wish to participate will need to vote again on the new proposal linked above.

@tonyY It is correct that after careful consideration, Luke Truitt, the co-founder of Loopscale, was appointed CEO of the go-forward business. He reports to a Board comprised of two Orca appointees (Michael Hwang and Chris Montagano) and one Loopscale appointee (Mr. Truitt).