Bringing Institutional Grade DeFi to Solana

Recorded at Solana Breakpoint 2025, Abu Dhabi, day three.

Hodl Up: Hello again! We're here at Breakpoint, this is day three, and today we have a very special guest: Ben from Solstice. Ben, thank you for coming.

Ben: Thanks so much for having me.

Hodl Up: It's our pleasure. We usually ask people for their origin story at the beginning, and to be honest with you, they're not always that interesting. But yours actually is: from nuclear physicist to TradFi, and now building Solstice, with the TGE coming up soon. There's quite a lot to talk about.

Ben: Absolutely, I'd love to talk through it. My career started, I guess, when I was 15 years old. I started working in physics laboratories and was focused on that industry in a very deep way. Then I found another way to apply my physics knowledge, in the finance industry, right afterwards: trading on Wall Street. I was doing derivatives trading, to be honest, execution trading at a bank. For anybody listening who's part of that world: you're a slow computer, that's all you are. You're an execution monkey, and that's all you do. It wasn't something that really engaged me. In that same time frame, around 2013, I was getting involved in crypto, and the obsession just kept growing. I've worked on the institutional side of crypto since then, at companies including R3, ConsenSys, SIX Digital Exchange, Galaxy Digital and, most recently, Deus X Capital, before founding Solstice out of Deus X. That's where the origins of Solstice came from: a combination of being a crypto degen for 10-plus years, having the institutional crypto narrative deeply infused in me, and integrating a lot of great technical concepts into our protocol to deliver a strong protocol to both retail and institutional investors.

Hodl Up: All right. We've had artists who joined crypto on our podcast, we've had developers, all kinds of people. I want to ask you specifically how your scientific background ties into crypto, and DeFi specifically. I know it's not an easy job right now: most DeFi projects have a hard time surviving and building the foundation and fundamental framework to keep going and deliver. So how does it help you?

Ben: When you're working in physics, you can go down rabbit holes very easily and deep-dive into specific equations, formulas, derivatives, whatever it might be. The physicists who do really well, the ones who break new ground, are the ones who see how all these things fit together in beautiful ways, and you start to see beautiful connections across the field. What I've taken most from it is, coming into the Solstice world, especially within the Solana ecosystem, seeing how our protocol and our partners fit into that ecosystem, and seeing this symphony of partnerships and value propositions across the industry work together to evolve into what I believe is truly the next step: institutional DeFi. Traditionally that's an oxymoron, but now we're at a point where we have institutional frameworks sitting under the hood, while on the front end it's just as simple to access DeFi products as it was back in 2015, with a very different level of infrastructure. Seeing all those pieces fit together has been a beautiful symphony, and a huge shout-out to our team and partners for putting a lot of those pieces together.

Hodl Up: What do we say to people who fear crypto is becoming over-institutionalized? And how do you find going from physics and TradFi to being in one of the most degen ecosystems out there?

Ben: It's a really good point. I was asked for a controversial take on the crypto ecosystem yesterday, and I said that over 50% of projects right now are building glorified back offices for TradFi. So many protocols forget why we're even in this industry in the first place. We're not here to recreate traditional finance at all. We have to create permissionless products. We have to create data sovereignty. We have to create true equality of access to financial assets across the world. That's where Solstice specifically fits into the ecosystem: whether you have $5 or $50 million, you get access to the same level of institutional-grade yield. That kind of product delivers what institutional DeFi means. Institutional crypto is traditional finance, in my opinion. DeFi and institutional versions of DeFi are right on that cusp, but actually delivering a new value proposition. Those are the projects, companies and partners we look to work with most, and that's what we're really driving toward: preserving those permissionless principles within our protocol.

Hodl Up: All right. First I want to talk about the stablecoin, and the whole stablecoin sector, and then touch on CBDCs, because to me that's one of the best discussions to have at this point in time, when mass adoption is happening through institutions and governments, and everything is suits and ties. Talk us through the stablecoin and the whole process. I've done some research, and I know you've overcollateralized your stablecoin by quite a lot compared to competitors. Give us a brief on that.

Ben: Absolutely. At a high level, you can think of stablecoins in three buckets. First, you have true stablecoins, the most vanilla version: fiat-backed, with dollars or treasuries in the bank backing a dollar-pegged or other fiat-pegged stablecoin. Right now 98%-plus is in US dollars, and we're looking for other currencies around the world to follow that same model. Then you have what we have: a synthetic stablecoin, USX, which is what we've issued. What we realized is that USDC, USDT and some other stables are now so liquid and trustworthy, with their banking backgrounds and all the procedures on the back end, trusted at the level of hundreds of billions of dollars in volume, that you can actually create a stablecoin using USDC, USDT and other stables as collateral. That allows deeper composability and easier access for crypto-native users, and you can use it across the ecosystem more smoothly. So USX is a synthetic stablecoin backed by USDC and USDT. It's overcollateralized because we have insurance policies on the back end for any liquidity events. We saw events like October 10th come and go with effectively no effect on USX. We saw no effect on our protocol: zero depeg, zero ADL exposure, zero redemptions. It was a smooth transition because of our model. Since our September 30th launch, we've grown to about $330 million in TVL, which is great usage for USX, and we'll be looking for more applications. The third bucket is asset-backed tokens: think USDe from Ethena and others, with Bitcoin, Solana, ETH or whatever else on the back end. Those are delta-positive assets that are hedged and margined on the back side, so you have neutral exposure, which is still great for a Bitcoin investor who doesn't want to liquidate, but it's a different type of token. So those are the three stablecoin models in the market right now.

Hodl Up: That gives me a bit of peace of mind, because I remember Terra/LUNA and the whole crash, and I was scared of stablecoins. I use stablecoins daily, but coming into this cycle in 2024, I was quite hesitant at the beginning to start using them and keep my money in stablecoins. So thank you for that.

Ben: Terra/LUNA is a big point, and I'll just say one thing I always say: do basic due diligence. If they're not showing you real-time, third-party-audited proof of reserves, it's no longer "trust me, bro." It's "look at our third parties," and our third parties are attesting to real-time proof of reserves, real-time collateral and real-time access. You need that kind of verification. That's what I mean by institutional DeFi. We're not giving up permissionless access. We're just saying, "Trust us by looking at real data and real facts." It's a very simple due diligence process. We're not taking that leap of faith anymore.

Hodl Up: You mentioned hundreds of millions in TVL. So you're the fifth-biggest stablecoin on Solana.

Ben: We're the fifth-largest stablecoin on Solana and the 24th-largest in the world as of right now. But what's most exciting to us is that we're the largest Solana-born, Solana-native stablecoin. We came out of Solana, and right now we're only on Solana. The reason is that the Solstice protocol and USX are focused on unlocking the full stack of Solana: payment partners, DEX partners, CEX partners, loop partners, borrow/lend partners, PT/YT partners. The whole stack of what Solana offers needs to be fully and properly integrated before we look at anything else in the cross-chain ecosystem. That loyalty says a lot, because it says there's a lot of value here. A lot of teams do one thing well, then say, "Great, we have a bunch of money, let's go chuck it over to another chain," and the utility just erodes when you expand horizontally without actually integrating into the L1s.

Hodl Up: And from what I remember, you've distributed more than a million dollars in yield.

Ben: Absolutely. Part of the Solstice protocol is a yield-based vault. Any USX holder has one-click access to lock it up in our yield vault, which runs a delta-neutral strategy, and we've distributed over $1.3 million in yield to our users so far, which is verifiable on-chain.

Hodl Up: And more importantly, for me as an F1 fan, I saw the Solstice logo on Ollie Bearman's helmet. Once you make it to F1 sponsorships, you've made it.

Ben: Let me clarify one thing, because everyone should be aware, if you know the scene, that it's a very expensive price to be a team sponsor, I'm assuming. We're wholly funded by Deus X Capital, and the Deus X Capital group is a $1.5 billion asset manager managing 40 portfolio companies, with CEO Tim Grant, who is our executive chairman and someone I've worked with for the last 10 years across several companies. Deus X sponsors Ollie Bearman, so as part of the portfolio we had the opportunity to come in for the Abu Dhabi race this weekend and get the Solstice logo on the helmet. It was a great experience. We were out there with Lily Liu, the Solana Foundation president, as well as David Rutter, the CEO of R3, and our executive chairman. It was a great showing of the industry together over the weekend.

Hodl Up: I'm listing all of Solstice's achievements, and I'm very excited about the TGE now. I know you already gave a talk on the main stage. For those who couldn't make it, the likes of us who had to record back to back, can you give us some alpha?

Ben: Absolutely. Here's the exciting part with a protocol like ours that's institutional-grade: the trade-off we were able to avoid is that we can still be a true DeFi protocol. And as a true DeFi protocol, we can have native utility tokens that incentivize users on both a retail and institutional basis. We have a Flares program right now, which is points: use USX and eUSX, our liquid yield-bearing asset, across the ecosystem and you generate points, which will all be converted to Flares. So many people have come to the booth saying, "We're a top 1% Flares holder, we just wanted to come by and say hi," which shows the ecosystem's support. What's exciting about the upcoming TGE is that you'll see a huge amount of utility from the use cases USX is gaining across the industry, all incentivized by SLX. And with several new Solstice business lines coming out in the new year, a bit of alpha, we'll use SLX to tie that whole flywheel together. That means governance, utility and incentive programs across the whole thing. It starts on the winter solstice this year, December 22nd, with our pre-sale for SLX, our native utility token, and the TGE shortly after.

Hodl Up: All right, I want to go a bit deeper on the TGE, because back in 2024 and even this year, TGEs got a bad name. The teams didn't execute properly; they were rushed. Can we expect something more? What did you consider beforehand?

Ben: I'm so glad you're bringing this up. Let's open the book a bit. What does it take to do a TGE in 2025? Money, right? It takes money, but it takes a lot more than that. You have to coordinate. First, you usually want a pre-sale partner to activate the community and do the initial raise. There are a lot of fantastic partners; I'll highlight Legion as our partner of choice. They're fantastic on regulation and transparency, they've executed several very successful TGEs, and they have a very clear path on regulatory guidance. Shout out to Matty.

Hodl Up: Shout out to Matt.

Ben: Exactly, the Legion guys are fantastic. When you look for a pre-sale partner, there are a lot of more degen efforts that just raise, and it doesn't matter where the money comes from or how; they just get money in. We're past that narrative with TGEs. So first you check for a good pre-sale partner. Then you go into exchange listings, and that process is a bit of a nightmare. Unfortunately, the process used to be that with a lot of these exchange partners, if you wanted certain FDVs or certain token prices, you had to make a lot of backroom deals. That's why there's been so much turnover at the CEXs: these guys were taking bribes, whatever it might be. You have to play that game very carefully. Not anymore in 2025. We go in with a real product and say: we've distributed real yield, we have seven figures of ARR, we're distributing $1.3 million of yield to the ecosystem, we have 131,000 monthly active users, and we've generated 15% yield over the last 12 months. These are real, factual statistics. We use them to price the token at a real FDV, because the biggest issue with TGEs is an overinflated FDV. I've seen several this year come out at what I'd estimate are 10 to 15x premiums, with not even a fifth of our users. So you wonder where that value actually comes from, and it's just artificial price inflation. To see whether a TGE is going well, and which ones meet the bar of due diligence: do they have a good pre-sale partner that looks at regulatory requirements? Do they have the on-chain numbers and data that matter? And when the FDV comes out, how is it being valued? These are very basic statistics. When you see multi-billion-dollar FDVs floated out there, you have to say, "Wait a minute, this is just price scalping over the first several months, and people on the back end are taking massive profits." We're taking a much more appropriate approach to launch, and you'll see a much more conservative FDV. We're not trying to be the sexiest player in the world, or boost it 10x in the first month. We're going to take it slow, show the next set of products and the next set of value, and keep going on a linear path, as opposed to exponential swings up and down with a lot of price scalping on the back end.

Hodl Up: That brings me to my next point, because you've been stress-tested in the last few months with the price of Bitcoin declining, and your APY is still higher than most of your competitors'. My question is: are you prepared if things keep going south with the rest of the market? Say Bitcoin decides to free-fall to $50K. In my opinion that won't happen, but are you prepared?

Ben: Absolutely. Look at Solstice's strategy. We take the USDC and USDT deposits and hold them with Ceffu and Copper on the back end. We mirror those onto the CEXs, and we execute a three-part delta-neutral strategy. We do funding arbitrage, the basis: the difference between spot and perps, long spot and short perp, capturing that natural market inefficiency consistently. We also do hedged staking, which is the same trade while staking the underlying spot asset. And we do tokenized treasury allocation. During this period, when spot dropped 20% over several months, we were still producing positive 5 to 6% APY on a monthly or weekly basis. How? Because we were able to shift into more staking yield and treasury yield during periods when funding rates were low. So when I say 15% APY, I'll be hyper-transparent: with all these other delta-neutral strategies, you have to challenge very hard where the yield comes from. If a player is just doing Bitcoin or ETH perps, for example, and that yield was only 2% over the last week, how are they posting 5, 6 or 10%? Either internal revenues are being passed back into that yield, or something else is going on in the back end and they're not showing you the real data. On our side, we won't have the sexiest yield, but we can shift into what's effectively a floor around treasuries no matter what. So even in a -20% spot market, we're still producing positive single-digit returns for our investors. If this continues into a bear market across the cycle, that's definitely a concern for us, and for everyone in the industry. But if we see massive swings, we can also flip the trade and trade the perp in the other direction, so we're keeping an eye on that. And I do think 2026 will be very positive. What drives the perp and basis trades is net new retail activity, and that takes a bull market swing. Based on all the activity we've seen here this week in Abu Dhabi, I think we're in for a good 2026.

Hodl Up: I'd rather choose safe than sexy in crypto right now, by the way, because I have so much PTSD from stablecoins, projects and altcoins. Altcoins specifically have been underperforming, not just right now but for the past three years. Only maybe 10 or 15 have performed well. Look at Solana: the ecosystem has never been this big, look at Breakpoint, it's massive, but the price doesn't go up. So I have PTSD, and I also choose safe over sexy. Let's get back to the TGE. I want to talk about tokenomics. How, or why, will the token be successful? I asked something similar earlier, but I'm focusing on tokenomics now.

Ben: Absolutely. First, a quick sidebar on what you said about the SOL price. With institutionalization, all these ETF liquidity pools and so on, you're starting to see fragmented liquidity. On both the institutional and retail side, the first capital to flee into dollars right now is crypto capital, because it's the, quote, riskiest asset class in the portfolio. So you see these huge offerings and a lot of institutional money coming in, but then you see it sold off first. That constant tug of war is one of the reasons we're seeing this right now, unfortunately. As for the SLX token, this is very important. We'll be releasing several white papers with full transparency on exactly how SLX works, but there are two major dynamics. On the USX side, yes, our yield is safe, not sexy, like you said. That's how we function at the level of eUSX, our liquid staking token, with the delta-neutral strategy. But the sexy part will be the utility, and the people who believe in this project, all the retail users taking part in the Flares program. The SLX token will incentivize every payment rail USX uses, every lockup, every DEX liquidity pool, every PT/YT system on Exponent, every borrow/lend pool on Kamino and Loopscale. All of those will be incentivized by SLX. We'll also release governance dynamics for the protocol. Should we accept new yield-bearing strategies, a second, third or fourth one? SLX holders will be able to vote on that as a community, based on the risk profiles they want to see from a stable company offering good institutional yield. If they say, "Great, delta-neutral is great, but we want something with a bit higher yield and a bit higher risk," we can vote on that as a community and bring it to the protocol. That's what permissionless dynamics are all about, and those are the principles we cherish.

Hodl Up: Since we have to wrap it up: what's the alpha for 2026 and beyond? What should we expect by Breakpoint in London?

Ben: Okay. The alpha, quickly, is that you want to be holding or using USX right now, before the TGE. That's what I'll say.

Hodl Up: So we have to farm the airdrop.

Ben: You just want to be using and holding USX. And again, USX is just a stablecoin, immediately and highly liquid. Do whatever you want with it across the Solana ecosystem. Whatever you're using across Solana, you can use USX for it instead of USDT. You can also start earning yield with eUSX, which counts as well. All of that earns you Flares, and holding it in your wallet will make a difference at the TGE. That's a bit of the alpha. And for 2026, in Q1, we have several new product releases, which I'll float right now. I can't tell you what they are yet, but we're very excited about them.

Hodl Up: I feel like we should put a paywall on this episode. Too much alpha.

Ben: No, it's good.

Hodl Up: Well, thank you so much for finding the time to join us today, Ben. It was a really exciting and insightful episode, perhaps the most insightful one we've had so far at Breakpoint. So thank you so much.

Ben: That means the world. Thanks so much for having me, guys.