Inside Solana's Largest Native Stablecoin: CMO Ryan Day on USX and SLX

We got Ryan Day from Solstice. Hello. How are doing? Great to be here. What's going on? Welcome to the show. Welcome to you. We actually we just created a money cannon, and it's I'm actually gonna update to the Okay. Oh, no. You guys have got my eye. Oh my god. Ugh. We have the ability I love that. We have the ability to add specific tokens to it. Like, so Oh, do you have USX?

Yeah. Yeah. Do you have USX? I don't know. We're gonna let's see. We're gonna see. Oh my gosh. We do. I I did not know this, but we do. Look at this. It's Now it's now we're gonna Alright. There we go. That's what I need. Thank you. Thank you. Rain. On the fly too. I appreciate it. Rain. Okay. I don't know. So Well, come on. Set it up well. I am I am pleased to be here now. I was I was in the middle of the road. This is a great podcast, man. Yeah. Yeah. Yeah. I'm sorry. Live show. Live show. I

I I just I slipped up there. Yeah. Well, hello, Ryan.

Give us your quick intro. We'll dive into solstice.

We actually we have more actually before we do this. I do have something else queued up because we had a great chat with your co founder Ben. We'll roll this tape, and then we'll get into it. Shit. Yeah. Ben Nadarevsky is the founder of Solstice, and he's bringing Wall Street's favorite trading strategy to Solana and killing fake yield in the process.

A lot of these strategies that are out there in the market right now, you'll see these very high APYs, and you'll see these very untransparent just numbers just published on websites as if it doesn't matter. And that is the wrong side of development that we're seeing in DeFi right now. USX, our native stablecoins, saw no volatility, no DPEG, and no issue going through the largest crypto liquidation event in history. The most exciting evolution in financial markets is not happening on Wall Street.

It's happening on Solana. The full strategy on democratization

of hedge fund profits and the rise of institutional DeFi with Drew Rogers and Ben Nader Happening on Solana.

There we go. Okay. So, Ryan, we've kept you at bay long enough. Give us your intro and

Yeah. Intro sources.

Yes. I'm I'm glorified tweet boy over here at Solstice, but some other people were Well, you're doing a great job. Thank you. Thank you. Thank you. I've seen him over at Solstice. Solstice is the yield layer for Solana. You know, we're just focused on tokenizing off chain yield strategies, bringing them on chain, and making them as DeFi composable as possible.

So we currently work with partners like Mino and and Exponent and Loop Scale to kinda really drive up as much DeFi utilization as possible, but, you know, we're sourcing usually uncorrelated or or off chain yield sources. So it's not we're trying to bring capital from outside the ecosystem. In the ecosystem, all making money together, which was you know, we used to say WagMe and stuff like that back in the day, but that's kind of the idea. Not stealing from other people's pockets. Is this banner accurate?

I'm I'm reading this banner that we have. Solstice, Solana's biggest stablecoin. Is that something that we can claim in banner? It the

largest native stablecoin to Solana. So we do have some that are about us like USDC and USDT. Like, you know, shout out to some of the greats, of course. But we are the largest native stablecoin on Solana. Okay. Yeah. Of course Hold on. Well, here we go. Yep. Live update coming in. Live update coming right now. You know, I know the the basis for this was was bullish.

Yeah. News, them coming on, allocating capital. I'm seeing in this article from Business Insider that EUSX, though, has run for three years with obviously, it's across every quarter since launch. A record regulated allocators can audit directly, I think, with talking with Jason from Blockworks about the transparency alliance. Like, that's just a huge I don't I don't really know if there's many other builders in the space that can go attest and say, hey. Go audit it. Don't trust me. Yeah. Don't trust our data.

So one, I would ask, what has that journey been like, you know, over these past three years leading up to be you know, for one to be able to say that? But, two, what is the what has your experience been like even just, you know, running it from a marketing perspective? Yeah. Well, you know, if you chat with the Anna, tell him I say hi.

But then the the other side is the so the history, right, of of Solstice, it started actually as a just a a trading house. So we were running the basis trade now for I guess it's three plus years at the moment. And so it got to the point where kind of Athena was coming to market, another great protocol, another great, project, and we thought they were doing amazing stuff, but kind of, like, Solana wasn't getting access to a lot of the things that was happening out there. Right?

So how do we bring this type of Athena stuff to the Solana ecosystem? And we thought that would be a great juncture for us to kinda launch into. And so what what we had, which I think a lot of other B5 protocols or a lot of the yield sources don't have as they're going kind of into this into launch or into to tokenizing assets is we have the history of actually running a straight desk for three years, and then we tokenized it and brought it on chain for permissionless access starting in September 30.

So we had this trading strategy that we've we've been running for three three years, then we tokenized it, brought it on chain. So what was nice is, especially as we're coming to market, we were able to launch with a 160,000,000 TBL. And this is fresh new TBL into the strategy because you're showing allocators a lot of things. Like, hey. Like, we're we're able to go take the NAV from our from our strategy for three years and show them this is these are the return profiles that we've had in our trading strategy.

And they're like, oh, interesting. Like, not only am I an institutional investor, right, who understands things like NAV and and IRR and and all of that kind of stuff, it it you're you're a lot of the times, a lot of DeFi protocols come out and be like, we back tested this strategy for three months, and now we've been running it live with 25 k. Right? Now, like, up until then, we had 200,000,000 in in in AUM, so we were actually running this trade profitably live for three years before.

So that made, like, jumping out the gate early. They brought me in roughly about May last year. So when we were starting the the product of tokenizing this and bringing this on chain to kind of bring this to market in the in the kind of permissionless ecosystem. And now we're sitting at where we are today, which is this really interesting juncture where we have a product with a a regulated fund where we can take institutional capital from that's never touched blockchain rails before. They can invest fiat.

We bring that on chain for them and go get the DeFi yields because everyone's very excited about what's happening in the DeFi ecosystem. Then But we can also have permissionless people coming in from wherever they are in the world, investing in the allocation or into the protocol. Both of those parties are getting the same underlying strategy and getting access to the yield at the end of the day.

So it's just a really nice dynamic that we get because, again, a lot of deep fried protocols that are coming out, they either don't have a fund, they're trying to keep early on chain, all that kind of stuff. So we we really like what people see a lot in the ecosystem is what our protocol is and what's on chain, but there's so much stuff that happens back up house off chain that we've spent a lot of time building that I don't think a lot of other people have.

That's a fun place to be when you you feel like you've built

a lot of things that aren't visible or noticed yet. It's kind of this, like, exciting eagerness for the world to know it. And Yeah. It does seem like that. I mean, that's kind of where my mind was going next. Like, I'm on the site. You have, like, yield strategies and platform. There are a lot of different things here that is are, like, being showcased as, like, different core parts.

Help us understand the differences between some of these things, like USX, SLX, Soul Stream, and and maybe, like, specifically where those things are going as you want to reveal

more of what may not be seen yet. Okay. What exactly I need to say on the product stack in the you know, I think you did the x you did an x article update on on some TBL. So you mentioned USX, EUSX. Sorry. Mouthful. STR Yeah. Yeah. EUSX.

Wait. We're gonna work on the GPT 5.7, know, all that kind of stuff. Work on it. Yeah. Yeah. Yeah. So so we'll work on that. Because you have a few forward looking

stablecoins as well with AI USX, TB USX as forward looking primitives. And so help us understand how these all blend into an ecosystem. And then I guess the second part of this, once we get through the the stablecoin oriented products is where does the token? Where does SLX fit into this conversation?

Yeah. So the very, very high level we'll we'll start high level and work our way down. Basically, what what we're we're positioning, right, ourselves as the yield layer. And so I think this the idea is and you'll see this in a definite a bunch of different models. Like, think I think it's a good example right there. They're taking a bunch of yield and tokenizing into their one token, right, and and bringing that yield to the market.

And what we're thinking is, I think our our thought process is that users will probably want to mix and match their own yield strategies. As long as we what what we are doing is always sourcing or working with partners that are sourcing the on or off chain yield themselves, like, happy to come in and tokenize that and bring it through the distribution channels that we have in Solana ecosystem.

But the fundamental core is works we are when you are grabbing one of the Solstice tokens, you are getting the source of the yield that is generated from wherever the different sources are. So we have USX. That's our stablecoin. Right? So that's how you get into the ecosystem. Settlement layer, that's how we you lock into the different positions. The USX is is kind of the the marquee one that we started with. It's the basis trade kinda delta neutral strategy.

So if you're as much as I love to give out financial advice on on these things, it's the lowest it's the lowest risk of these strategies as you're looking into. But then now that we've kind of proven this foundation, you know, we've we've been alive or, you know, we've been launched now, as a token project since September 30, so I don't know the math on that. But seven, eight months now? So now we have this really solid foundation. We have half $1,000,000,000, in TBL. Now it's okay. Now let's stage two.

How do we scale up the different yields that are available? How do we bring more of these to to market? And how do we do that quickly and effectively given all the different yield sources that are gonna do in there or or kinda come on to market? But the one thing that we're trying to do differently is find the like, everyone can get a yield source from wherever, but we wanna work really hard on how to make that d five or that yield source as d five composable as possible as fast as possible.

So for example, like, of the big things that's coming up for us is is Stretch USX. And so we're gonna be launching Stretch USX on Solana here in just a few weeks. That's Is that what this is on the kinda soon teaser here? Coming soon, Pete. Little alpha for you guys. Yes. So we'll be launching Stretch USX. It's our tokenized version of the stretch. That's shout out to Mike Sailor of the Stretch product. We're gonna be launching kind of junior and senior tranches. We will be launching that very, very soon.

And so that's the first of these series of tokens that will be coming out in quick succession after that. Now that the foundation is there, now it's, okay, take a new yield source, plug it into the ecosystem, let people start earning and tokenizing it, and take it around to all of our beat by partners. You know, we will be we will be doing some very big things with that very soon. You know, we're we're thinking about how does Stretch, which is, well, yes, it's a great product that has 11.5% yields right now.

How do we how do we use that in a DeFi ecosystem so people can go lend, borrow, loop, ET, YT, all of that kind of stuff in the best way possible and trying to limit downside risk like liquidations and all that. So Can you go a little bit deeper into so where where's the yield coming from in Stretch's example? Yeah. So so, basically, we're just gonna go out and buy a bunch of Stretch from the money that comes into the ecosystem, and we'll take and generate the yield on those those dividend dates.

Stretch is Stretch is a is a separate token. Strategy.com/stretch from strategy. K. This is this is a slightly new to me, so this is good. Oh, that's alright. Alright. This is slightly YouTube guys. But let me let me Let's let's start from square one. Let's go stretch.

Let's fit in. How does how does it make sense? So this this wonderful man by the name of Michael Saylor. Alright? Shout out to the one of the greats. He has convinced people that and rightfully so, all of us here, that I will buy Bitcoin today. And I think Bitcoin years from now will be 30% more valuable than it is today, and I will strip the ball out of that for you and give you 11 and a half percent on a monthly basis now if you buy Stretch. So Stretch is fantastic.

I think it's fantastically structured financial product or financial engineering here to make this put this together. It's not a stock. You're getting a return on capital investment. It's it's it's mind boggling how amazing this is. So what we're doing at Stretch USX is Stretch right now lives in, like, your TD Ameritrade or whatever. How do we bring that on chain so people can start leveraging that yield and use it within d five?

So and we're doing it slightly different because one of the the the drawbacks about having just Stretch kind of in the markets, just having, like, the you can get Stretch on Solana right now. There's a StockX version of Stretch. Great product. Love the team there and and everything that they're doing. The issue is Stretch is a somewhat volatile asset. It's not as volatile as potentially some of the other ones out there, but right now, right, the price is 98.75¢. Right?

Once it hits a $100, that's what they call the the ATM printing area. Anytime it goes above a $100, Michael Sailor prints a bunch of new stretch and goes and uses all the money from the printing to go buy a bunch more Bitcoin. And so that's how he keeps accumulating more Bitcoin because, I mean, who's the a better salesman for Bitcoin than Michael Sailor? He's convinced a lot of people would get billions of dollars to go buy Bitcoin.

It's an amazing pro like, again, worth digging into because this is an amazing product. After the dividend date, right, after the ex dividend date, some days sometimes the money or the the value of the the shares can come down. And so that can become a problem, especially as you're looping or using this as collateral, and then it suddenly makes you in a either unprofitable position.

Or if you wanna exit, you might have actually lost the yield because you you you come out at a position lower than their your buying price at a 100. So we're trying at Stretch USX to strip out that volatility even. So Stretch is stripping up the volatility of Bitcoin. Stretch USX is stripping out the volatility of Stretch and then trying to make that really decomposable. But underlying, you get that yield that is being generated off the future return of Bitcoin being worth 30% more in five, ten, fifteen years.

Then Stop there. That's my questions. Yeah. No. I was gonna say I was so if I'm understanding correctly, you're you've gone from great so you've USX. And I guess all, like, there's USDG as collateral. There's the, you know, there's other stablecoins as collateral there. EUSX is call it the the yield bearing version of that and and yield vault across, you know Yeah. Amino trade, Delta, North Carolina, Radium.

And then so now we have these other ones, which is using USX to essentially go buy stretch, and you could apply that to you could apply it to I think there's a hyperliquid debt. There's you could do that with per. You could do that with essentially insert dividend assets off chain and

sources. Okay. Yeah. So is that so then forward looking, where does the AI USX and Yeah. So I'm sure so, again, like, there's a lot of great yield products that are available on EBM, and not as many are available within the Solana G5 ecosystem. And so what we're looking at is where are these great opportunities out there? And I'll give, like, a little bit because we you know, my my people who are on the PR are gonna be very angry at me for saying too much too soon.

But we have so we're we're backed by DataSex Capital. It's a billion dollar investment fund, but they have a bunch of portfolio companies too. The portfolio companies actually work in the AI infrastructure space doing a build lending and compute rentals and stuff like that. And so we're part we're we're using the partnerships there to spin up AI infrastructure lending yield. So similar to USD AI or Chip I was gonna ask. Yes. And I turned my phone off, so this is I I swear I'm not staring at the ceiling. Okay.

My camera's back on maybe. So this is this is the types of yield that we're looking into. And so we're looking out there at other yield. Again, we're trying to uncorrelate the yield sources that we're getting by bringing off chain yield sources on chain to the crypto ecosystem just because when you think about some of the stuff that's gone wrong with some of the looping or yield sources or contagion risks or, you know, Resolve is still figuring their stuff out, that kind of stuff.

What we we're trying to do is minimize the risk that comes from the downstream for users. And so if they're taking our yield and then going upstream and doing looping and and and stuff, that risk is a choice that they are making, not the fact that they chose to use our our our our ecosystem itself. So we're trying to limit as much downstream from them as possible because we're sourcing that yield ourselves.

And so that's kind of one of the strategies that we think about as we're kinda scaling. Drew, I'll give you a sec. Yeah. No. I have I have I have the the next question queued up. But if you Drew, I give you a second. Do you have anything? I I guess my

my natural mind goes to just what what could go wrong. Like, what are some of these things that seem risk? Like, there's always a risk here in any of these things. Like, what are some of those trigger points or things that seem like, key key things that you're looking to avoid or key risk mitigations that make something like this successful? I mean, I know the team is extremely experienced, and the the people behind you and and are adopting

this have seem extremely trustworthy. But, like, where does risk fit into this conversation? And how are you thinking about that? I mean, we all know mythos is in the wild already out there breaking into every sort of protocol and and thing that exists. So one of the you know, I I think that that's always, like, an overhanging existential threat that we're always thinking about. But, again, there's there's a lot of, like, ops that that we can do.

So so when the big drift happened, one of the things that a lot of folks did is they looked across all these different protocols my camera. I'm the worst. All these different protocols that what their kind of multisig look like, what their time locks look like, all of this kind of stuff. And luckily, because we've been thinking about kind of the offset with this while, we typically rated I think it was nine out of 10 a lot of times in security. We have twenty four hour time locks already built in.

We have a larger multisig. We had a lot of different things set in place. A lot of it is the OPSEC side of things. Right? So we're thinking about that. As long as we can protect that kinda downstream as much as possible and do best possible practices, we're working with the Solana Stride, a program to make sure that we're taking a lot of those best practices and sharing best practices across the industry.

Because then upstream, right, if if something happens to one of the partners that we're integrated with, not that the underlying yield or the collateral will also be in trouble, right, but our users are still effective even if if someone's taking something from USX or something and going and using that on on Exponent or or Camino and something happens there. Right? It's still gonna affect our users, and that's never a good thing.

So those are things we're we're often thinking about, but we're we're very choosy about the partners that we're working with, and then we're working very closely with them on what does the risk look like here and what's the appetite and making sure. Sometimes we we make people a little less happy because the APY percentages aren't as high, but it's really in the best interest.

You gotta sometimes take your medicine and be the adult as opposed to you know, it's the the degenerate that's trying to ramp ramp up that APY all the way, like, a 100 and Back to, like, Wonderland time days where it's, like, a 100,000. Oh my I'm old enough to remember that. No. That was literally my entry into DeFi. Yeah, DeFi. What a wake up call. It's all all about the dreams you made along the way. I skipped Ethereum and went straight to, like, Avalanche's pain, Ponzi's booze.

I know I'm just the good old You really cut your teeth. That's right. Yeah. Yeah. Yeah. Yeah. I know. My wife was like, what is tell me more about this. And I was like, what are you talking about? What do you touched you on this a little bit, but what do you think about I know it's pretty recent news, but have you had a chance to see what Blockworks has been up to with the token transparency stuff? Any any thoughts on Yeah. On some of that?

Tell Dan Smith I will get back to him on the DMs because I'm supposed to be chatting with him sometime soon. But, you know, we did just TGE this week, so I've been a little busy, Dan, if you're listening to this. I apologize in advance. Dan, give a Metabrick. Okay? I know. Jeez. Would you can lay off? Right? You're texting me more than my wife. Come on, buddy. But, no, the it looks amazing. Right?

And so that's one of the things that we're we're thinking about is is now that, again, we we launched our token, we have the foundation set, and we're scaling up. It's like, what are the what are more things that put us in in front of the right audiences of investors with both retail and institutional side? Luckily, we had a a really good starting point from our our time running this strategy and having that kind of connections before we tokenize.

But now that we're tokenized and and now that we're trying to step outside of our network, how do we do that? And I think the the token transparency stuff that you guys are doing is is top notch. And so I will be following up very soon to kinda dig in and see what we can do to to take part as well. Yeah. Talk to us now. You know, TGE, I imagine that's I've never been through launching a token like that. So Yeah. Can only imagine what the past six months have been like.

But I just the the question that people always ask me is, hey, Zach. You focus on stablecoins. Yeah. What tokens do I do I go buy? And, obviously, I don't give financial advice, but, also, it always begs the question of if you're a stablecoin product, why a token? Yeah. It's a good question. So the the the thing that we are is while, yes, we are a stablecoin project, we really focus more on the yield side.

And so the stablecoin is primarily because of a choice that we had to make and diversifying away from just having yield bearing stablecoin. Right?

We have to have a yield bearing token versus a stablecoin to still offer the same things and find our way through you know, as they like to say, the Clarity Act is getting passed at some point, find this way through this unclear kind of murky gray area and position ourselves so that when regulation does count down the pipe there, and we can act and and and be protected as we're thinking about those kinds of things.

So the SLX part comes in on the more on the yield side than it is on the stablecoin side in the sense that a token gives us a secondary revenue source to a yield source. So if you think about most hedge funds or or things like that out there, their primary revenue source is getting money from you by going out and running the trade, taking either a management fee or performance fee or both, right, and then giving you back portion of the yield that you earn.

But it comes with because they need to make sure that the bills are paid, it comes with some stipulations. Right? Like, either you can exit once a year or you can exit once a quarter. You have to have minimum thresholds. You have to do all this stuff.

And so as we're moving into this day of instant ratification across everything, you know, even people around financial products with Robinhood and SoFi and all this kind of stuff, people are expecting this kind of user experience that they can get through Amazon Prime same day delivery. And so how do we do that with financial products?

If we diversify the yield sources or the revenue sources that we have, it gives us the ability to give users that experience, without having to potentially cannibalize the revenue that we have that we're generating as a business. One of the examples where SLX, is first the first, kind of utility that comes out of it is if you stake SLX or STSLX, you get it's basically a hedge on your EUSX. It's basically you can have a hedge on the basis trade. So its APY currently is 20%.

If EUSX's APY goes up, the APY of SLX the stake SLX will drop, and it kind of matches. So it gives you a way to hedge yourself as a as a user, step one, but the next step is instant unlocks. So right now, Athena, I think they actually just updated it. They can go down to a day in some instances, but up to seven days. We have a seven day unlock period. Think a lot of these yield sources as well.

Primarily, it's because they wanna make sure, one, there's cash available and and those types of things, but it's also the revenue. Right? As you're projecting revenue to to deliver in the yield that you're supposed to deliver to your users at the end of those seven days, there's some some analogs there. But if we have this token in the market, it gives us the secondary revenue source to kind of, okay. You guys have staked your SLX with us. You're holding SLX. That's great.

We can give you access at different times and levels because we know we're getting revenue from you in other sources and other. And so it's really this way to help balance kind of the ecosystem on giving people a better user experience through our ecosystem because we know we can, again, or, like, kinda catch that revenue in different ways. So that's kinda, like, the main thing. And so more of these user experience increases will come as SLX is is more even who would see used across all of Hopefully, that's helpful.

Yeah. Yeah. Ryan, what is a wants a some deep dive. Hey. Yeah. Yeah. Think we got Ryan, we

one, this whole, like the conversation around yield is something that we're gonna be having more and more of. And one, we'd love to have you back to, like, dive into this and especially break down some of this visually, but also help us think through this in terms of other approaches. I'd imagine that you're very connected to a handful of other builders and people, especially in the Solana ecosystem, who are taking different approaches with this yield conversation.

So that that's a priority for us in the coming months is to really unpack that sort of that just that dynamic and and how you can generate yield in a ton of different ways and how important that is. It's always been Yeah. A huge part of the world of of finance is earnings. So exposing the different paths and approaches to that is a key priority for us in the business. So would would love to have you back to dive into this again. Happy to get my quanta on here to dig into it at some point too.

But, you know, they're not as exciting and fun as boisterous as I am on the stream. So just keep that in mind. Alright? Alright. Cool. But, yeah, happy to share great. Yeah. Yeah. What would you leave what would you leave the, yeah, leave leave the Stablecoin focused, yield focused listeners with? It sounds like it's been a big week. If you are interested in

the largest any sort of yield if you're interested in yield, give us a give Solsys a look. SLX is out there in the wild now, you know, saying it's a pretty cool token, But we also have some cool YO products, and pay attention kinda mid June stretch, which we've all learned about here today a little bit, will be available on Solana and deeply integrated into DeFi. So for all those loop or enjoy yours, get ready. Some fun APYs will be coming to the marketplace. There you go. One more cannon as we say goodbye. Alright.

Boom.

For the time today. That's easy. Thanks, guys. It's great.