Solana's Orca merges with Loopscale in push to finance AI, robotics and defense

Solana-based decentralized exchange Orca and lending platform Loopscale have merged under the new name Formation. The combined team will be led by Loopscale co-founder Luke Truitt as CEO, according to an announcement shared with The Block.

Formation looks to combine Orca's trading infrastructure with Loopscale's lending and investment vaults to give emerging assets a route from issuance to financing and trading, all under one umbrella.

The companies want to move beyond crypto trading and lending into more capital-intensive business sectors like AI, energy, robotics and defense.

"The frontier economy is creating new business models and financing needs more rapidly than traditional market infrastructure is evolving to serve them," Truitt said.

Formation says traditional financing can be too expensive for smaller deals in many cases. It plans to cut those costs and eventually offer access to regulated U.S. capital markets.

Over the next year, Formation plans to roll out tools for asset issuers and new investment strategies. It said it is already working with Figure, Shinhan Asset Management, Superstate, R3 and Securitize to bring assets to market and help distribute them.

"Liquidity alone isn’t enough to scale an asset," said Orca’s Christopher Montagano, who will serve as Formation’s chief strategy and legal officer.

The release confirmed that both existing protocols will remain foundations of the ORCA and xORCA token network. Financial terms of the merger were not disclosed.

Building on Solana roots

Orca has processed more than $550 billion in trading volume since 2021, while Loopscale reports more than $150 million in deposits and facilitating over $2 billion in loans.

The deal is a logical step in Orca's push into the tokenized finance segment. In August, it joined Shinhan Asset Management, the Solana Foundation and Etherfuse in a proof-of-concept project for a tokenized Korean won bond fund.

Orca raised $18 million in 2021 in a round co-led by Polychain Capital, Placeholder and the now-defunct Three Arrows Capital. Loopscale, formerly known as Birdgesplit, raised $4.25 million that year from investors including Solana Labs and Coinbase Ventures.