Solomon Labs Founder: Why He’s Most Bullish Since 2014 As Stablecoins Fight Over Who Gets Paid

Shout out to the horse.

Yeah. I know. I filled it. I I just threw it in today. Franco, what's up, man? Thanks for joining. Good to see you. Hey. Great to be here.

Been watching a lot of your streams. Glad to be here finally.

Awesome. Hey. Shout out to the lab if you're listening. We're bringing on more and more of the ecosystem. So... But we'll be at Breakpoint. I'm sure we'll meet you there as well given, given your work with the team and the ecosystem. But, man, Solman Labs, really cool name, by the way. I just... Branding, love the name. Very... Yeah. We love... We're we're suckers for we're suckers for good brands at Stabilized. Yeah. So all done. Well done. Thank you. Thank you. But, man, we'd love to understand more.

Like, give it... Give us TLDR, USDV, the reserves, like, where you fit into this broader ecosystem of Internet capital markets working with teams like Onray, Oro, especially just like to to kinda decipher this this world of stablecoins. And on the surface, they look the same. You know, we see USDV, USDC, USDT, put a different letter at the end of it, but serving very different clients, different use cases, and really, like, tell us more about, like, who is USDV for?

Yeah. So we see USDV as filling a specific gap in the market, and that gap is simply how do users get a piece of the revenue that basically underlies these stablecoins. Right? How do how do users directly benefit from essentially the risk that they take on when they hold something like USDC or USDT. And USDV in in a lot of ways is a proof point of the underlying infrastructure that we've built that allows us to separate out the asset from the economics.

And the way we can distribute those economics based on policy is really where we believe we're adding value to the market. So USDV is a stablecoin that anyone can hold and use and effectively earn the underlying economics that are backing it. And and what's unique here is that this isn't just about holding a stablecoin in your wallet. This is about using it across any application, and our infrastructure allows us to attribute the economics that are owed to you. So you could be LPing in a DEX.

And while your asset is doing something and working for you, it's still earning the base rate somewhere between three to 4% that's derived ultimately from short dated treasuries. So that's that's sort of the the gist of it,

but but happy to sort of dig in on the infrastructure side and what that means for others. Yeah. Because I guess, like, if most people listening to this and and following kind of this narrative of, right, participating in the economics of using a stablecoin, like OpenUSD, super, like, big right now blowing up, what would you say, like, difference between OpenUSD, USDV? Where do we draw the lines? And, like, what is... Like, again, like, where do they get used? Because we've seen this talked about a lot a lot. Right?

Like, sharing in the economics. Do you use USDV? Do you issue your own stable stable coin? Why would somebody... Why would an enterprise or or... Maybe not even the enterprise. Maybe enterprise isn't even your goal. Why would somebody choose USDV over OUST or open USD or something like that?

Well, to start with, the USDV is live and operationally can benefit from it today versus OUSD that just launched yesterday, and, their earned rewards side of things is TBD. So I would say that right off the bat, but I I wouldn't really put OUSD directly in competition with USDV. I I think there's different parts of the market to carve out. OUSD is a endeavor of of creating an open standard for stablecoins where the promise is that the underlying economics is shared by anyone who's distributing it to it.

And and mostly around b two b. I would say we are b two b, but also b two c. And the idea here is that we have a hierarchical structure of how these economics are structured. So we can have a relationship with a business who's doing the distribution of USDV, and we would share the economics of that with that business and then we have the tooling and infrastructure for that business to then share those economics to their customers or users as well. And by default, let's say we don't have a relationship with the...

With another business, but you're just holding or using USDV across DeFi or other applications. The default is that you would then have a direct relationship with us and be able to earn in in sort of this default state. So when it comes to OUSD, I think I think the whole industry is is moving in this direction. It's been that case for some time now. I mean, stablecoin started off as these sort of dumb assets where we brought money on chain, and it was it was a really important thing to do. But the next part...

Or that that issuance side has become standardized as commoditized. This next phase is going to be around who owns the distribution and what are the economics around that distribution. And so I I think that's the piece that we're really solving for is is that layer that comes after this point, which is how do you manage these economic relationships between your stablecoin and the businesses and your... And and the end user.

And so our thesis is one asset, many economic relationships, and we've built this missing infrastructure to allow you to manage this and control this.

We... The way I simply look at this in some ways is like going back to the very beginnings of that massive massively lucrative, but crucial BD deal between Coinbase and Circle. Shout out to Jim Migdal. And the way that that was structured, and it was a very unique one off case, it was like extremely unique during that time and the infancy of this conversation.

From my perspective, it seems like you've almost created a modular, flexible system in order to allow for things like that relationship to happen through the through the system and the code in the way that this could be architected versus that having to be like a very one off enterprise manual kind of unique case that's... It seems like you you you would be able to structure the... What is a distribution relationship for USDC with Coinbase, which is in many ways the part of the value of...

A huge part of USTC growing and getting so distributed, that that becomes way more easy. What what does the process, I guess, look like? And I know Henri is something we wanted to talk about. Like, for those who have chosen to live at the the distribution layer and the application layer and work with you, like, what what are some of these use cases that you found early traction with? What gets you what gets you kind of intrigued there.

Zach and I as well, I think we're in a position where highlighting and spotlighting the distribution layer and the application layer right now is very uniquely exciting to us, because we've spent a lot of time the last six to twelve months really focused on the infrastructure side. So, yeah, speak... Bring us a little bit into

I would also just add here what you said about, like, knowing who the market is that you're trying to serve and, like, going really narrow and deep into that market. Like, I actually am more of an advocate for that model when we think about the world of, like, why having more than one stablecoin? Because I think you'll be uniquely positioned to work with the on raise or maybe the neobanks of Solana better than OUSD would or x y z stablecoin that would launch. So I just wanna put that out there.

I don't know if it felt like I was... We were drilling you right off right off the gates, but I I... I'm more of a fan of the model and the approach that you're taking than maybe it appeared in the first few questions.

No. No. These are great questions. And I think, actually, you you both touched on, things I've said in the past about what what, what Solomon is. Right? And and I think your point about Coinbase and its relationship with Circle is is an important one. Without that initial relationship of distribution that, Circle got for USCC through Coinbase, I mean, we wouldn't USDC wouldn't exist. I mean, it would it would be a much smaller market share than it is today.

And and distributions, those who own the distribution really are the kingmakers. And the idea is a core part of the... What we're building is this, how do we, streamline this process of your ability to establish these relationships, and have the infrastructure to manage these, distributions? And a lot of this comes down to details of policy, and and those policies could be described in two, which is, you know, one compliance related policy. These are things like Genius, Mika, Clarity if it ever passes or...

And the other side is policies that are commercial. These are things like, hey, how do we drive... What is... How do we behaviorally get our asset preferred over others? Things like rewarding users for doing x and then rewarding them with y. And what we did is we we looked at this and we built the infrastructure to allow for this a to z sort of solution to to to establish that distribution relationship, and then also outline, what the mechanics of that is and how the actual distribution occurs. So you...

It could be as simple as a stablecoin issuer, wanting people to use their stablecoins and saying, hey. Simply hold our stablecoin and we're going to reward you with x. But then, you know, let's say with Genius compliance, there's explicit rules around, hey. You can't just do base yield sharing of of just holding an asset. There, you might want to get more specific and say, hey. The stablecoin is the types of rewards program that must be doing x y z.

Those policies can be set, and then we can do the distribution based on those policies. So, you know, our approach for USDB is is, again, targeting this very specific gap that exists that you just highlighted about. How do we establish these relationships with with people like Onry or Radium? Right? Radium's another partner of ours that is... There... There's two levels to that partnership. One is USD be adopted as a quote pair in in their decks. It's a default offering now.

The second is Radium is now going to own the economics of USDV across their protocol. So they get to decide how these economics are routed and distributed. It might be to incentivize specific LP behavior, or it might just be simple pass through or, you know, boosting specific types of trading that is occurring across their decks. Why... You know, there's billion... $300,000,000,000 of stables that sits on chain right now. Why is it that these types of relationships take so long to establish from someone like Circle?

And we... We'll see how OUSD goes about. What we're saying is we can do this in a matter of days and get you up and running and and distributing these economics with minimal friction.

Wanted to ask about distribution specifically, like, we... I feel like you're entering this super crucial era where what can be built is pretty infinite, and the speed to which you can build something has never been shorter and and faster. Like, the iteration speeds, the the time to market, the tools at our disposal, especially for financial builders with things like Solomon. What what do you feel like is now uniquely possible with the tools that are now there?

Like, you you have a sort of a behind the scenes look at these tools that you're building, these financial primitives that you guys are offering. Like, we've spent... We love we love neobanks. We talk to neobanks all the time, trading venues all the time.

But are there, like, things that perhaps maybe the market hasn't seen yet or approaches to banking or approaches to finance that are now uniquely possible that have never been possible before because of those, like, the availability cost and, like, distribution of these tools? Like, any... Anything like that come to mind?

Yeah. This touches on a a slightly different point that I I I wanted to to to be understood, which was, when you separate out the underlying asset from the economics, I think that's really important to understand because I think for a long time, what we've been trying to do is bundle these things into one on chain. So you'll have assets that need to be staked or put into a vault to just ultimately get back the economics that you were supposed to get.

Like, thinking from first principles, like, think about how a lot of lending protocols or a lot of the ability to earn a certain amount on your stables ends up looking like the t bill rate anyway. But it's like you're holding a stable coin that has the risk of these short dated treasuries already, and then you take that asset, then you put it... Stake it, put it into a vault just to earn that back.

And I think, you know, that is just completely wrong in in a way that, you know, you're you're introducing layers of friction, but you're also introducing layers of of risk. Right? Smart contract risk, operational risk, etcetera. And I think when you look at institutional partners or people that are coming from the outside, they want as minimum risk as possible, especially when it comes to smart contract risk. Why are we potentially risking the principal just to earn the yield?

And so when you separate out the economics or the rewards from the underlying asset and completely separate them out such that your principal is never at risk, this actually allows you to then accelerate sort of the offerings that you can have on the reward or economic side of of of the financial infrastructure. Right? Because the underlying issuance, and the asset itself, like I said, it's been commoditized and standardized, so that's pretty straightforward.

But anytime you're doing anything on chain where it's changing that stack or or or those smart contracts, yes, you know, the the internal life cycle of of of development life cycle has has been accelerated due to, you know, just LMs, but but anything that comes online that still needs to be vetted and in a way that that, you know, it it... It's still...

There's still a lot of time that's needed to verify and audit these things and and make sure that they're safe to be actually online and for people to use these assets. And if anything, you know, the risk of these things has sort of, in some ways, increased because the the ease by which people can now, you know, use LMs to find exploits. Right? And and there's a counter to that. You can also use LMs in a proactive way to to defend as well. I'm not saying that those things are not imbalanced.

But but, yeah, to your point, I I I think when it comes to assets on chain, I think there's there's some efficiencies that have come about just because you can iterate through the life cycle pretty quickly. But at the end of the day, you're putting something on chain, and that is a huge, huge undertaking, that requires various, layers of opsec and security and audits, and and that's still... I think that still takes a lot of time.

Maria, I wanna ask about your your pinned tweet. I love it. And kinda like the lore about, like, how you started. We're gonna dive more and more. We have a future segment coming up that's gonna be largely, Solana focused. And I love just the way it ends where you're like, Solana will be the financial hub of the Internet. USDV will be installer, you talk about MetaDAO project. Let's... Can we go macro a bit and talk about on chain capital formation, building startups within the the Solana ecosystem?

I think we're seeing more and more products launched. Like, we saw Checkr, which is, you know, payments platform doing a a... I don't wanna call it ICO, but obviously doing, you know, doing their fundraise there. Sounds like you did a fundraise there. What was that experience like, and maybe what would advice be to founders that are looking at building on Solana, not building maybe a super inherently crypto native project that's maybe more of a finance or an... Oriented product and actually doing, you know, doing...

Not going the traditional route, not going traditional private credit route and launch this. Like, what are the pros and cons? What what was your experience like? I also love the, I think I'm so effing glad I did it. Culture is real, and it matters. So, yeah, maybe unpack this a little bit for us.

Yeah. You know, my background's in engineering, built critical infrastructure all the way starting from BlackBerry OS for the OGs, that remember remember that, And then airport infrastructure and control system, and then eventually got into crypto mostly through Bitcoin and Ethereum, just this idea of, like, being able to launch financial products with ease and and was sort of hooked from that point forward. The...

Most of my time has been on on the Ethereum side of things, and and it was a pretty big culture difference building on Ethereum to something like Solana where, you know, I talked about in that post, like, simple things like you being able to talk to other projects and just the accessibility of being able to partner and work together.

And then I think also just the culture of Solana of being much more driven in terms of the business side with sort of like more of a clear vision around this becoming the home of the Internet capital markets. Like I think that time especially, this was very true and it just made a lot of sense to build on Solana. In terms of raising capital, this was also an interesting one. At that time, there was, we had...

We were pretty split on on how we wanted to proceed, whether we should, do a typical, raise, versus launching on MetaDow. And for those who are not familiar on met... With MetaDAO, it's it's a type of ICO platform that is centered around ownership tokens where all of value accrues back to the token. And you have liquid... You have a liquid token day one, which is in itself a bit of a of a challenge and and blessing.

But but the idea is that anyone can own this token and have exposure or or direct ownership of the company. The... You know, when we raised that, we had over a 102,000,000 in commits, and then we took 8,000,000 of that. The overall idea was, hey. I think, you know, attention is the scarcest resource, and having a liquid token actually allows you to capture attention whenever you have these moments of attention and gets you alignment from a large set of factors and users.

And that that was sort of the thesis around launching on MetaDAO and why we've launched there.

I I I keep going, but I I I wanna stop here just... Hopefully, that answers most of what you we said. No. I I guess what I would ask then is, like, who comes next? Like I said, who are these people that, like, that maybe historically, like, write off launching on MetaDAO that you would encourage them to? Maybe this is like a call to builders for people that you want to see utilizing USDV. Like, is this the neobanks of the world? Is this the next collector crip in, like, card marketplaces?

Kinda like what Drew asked earlier, like, what are these next wave of projects we might see building on or around Solana that maybe bleed more and more into consumer finance. Like I said, if you're talking about that your background isn't building financial applications. And I think what what we've... What we are trying to think is, like, what do we do beyond speculation? So what? What happens next?

I think MetaDow's thesis here is that for the first time, you can have legitimate businesses with tokens that have real value, and and people can participate at the very earliest stages. Right? And and that's pretty compelling. Imagine being able to... I mean, that was the original promise, right, of ICOs. Like Yeah. 2017, the ICO cycle. There was so much attention, and even from those early days, the ideas were simple. You can sort of democratize this ownership, leverage the network effects.

Unfortunately, it was full of crime and fraud and people running away because we didn't have the right checks and balances. And I think what MetaDAO has done is created those checks and balances, and the industry's matured to the point where we now have, launch pads like MetaDAO launching legit... Legitimate companies with real value propositions with great teams building these products.

And so I think for MetaDAO, it's about attracting founders that are driven, that understand the value proposition of a token that can, facilitate attention. And so I think across the board, you already have, neobanks like Avicii. You have financial applications like Credible, Lasso, and, you know, privacy apps like Umbra and DEXIS. You you have you have all sorts of applications or businesses that are already launching, and I think they'll continue to attract those types of businesses.

I I I think, you know, this kinda goes back to stablecoins here for a minute. I I think stablecoins are and will continue to be the core PMF of crypto. And, actually, I think you guys have probably talked about this enough with other people on your show is, you know, everything is going to center around that. Like, it it it is in the interest of the American government, the Fed, to, continue to, dollarize the world. Right? And they see stablecoins as a pretty clear way to do that.

So you have private companies trying to get distribution, and everyone's aligned in such a way that you'll see the proliferation of these stablecoins backed by dollars, and it'll attract activity across the board. That's why we're seeing tokenization. You have alignment across the board from private to sort of policymakers to individuals that want this product. And so the next step is these financial apps that are going to facilitate all of this, private companies that are going to facilitate all of this.

But the core of it is still stablecoins. That's what's going to drive everything. And and so... Yeah. So going back to MetaDao, think we'll continue to see all sorts of applications launch and and attract, investors and users.

Yeah. I think what I just So much. Like, creditable, the ripped cars, it's really like, I... We get excited that it's like, great. It's not just, you know, this... Again, they're they're novel in the sense of, like, it it feels familiar, but like an evolution of already existing business models versus, like, something that's totally, like, novel and kinda utopian and out there. Not that those aren't fun, but there's a realism of, I want to see real businesses being built on chain.

And sometimes those real businesses, like, aren't super sexy. Like, we're talking with, Michael Saunders from XP Tickets later. Like, it's a ticketing business, but it's interesting the way it fits into the larger, you know, macro economy with Agentic Finance and how people are using it. Like, at the end of the day, I think we more care about, like, utility. Do the projects actually get used, or are they just gonna be a quick three month, you know, make... Some people make a make a buck and then, you know, dip out.

Yeah. A lot of financial infrastructure at its core is very boring. It's meant to be boring. It's it's... I mean, it's it's, it's incredibly interesting to me and the builders here, but, but the assets themselves, you know, stablecoins are... Should be boring. Like, you shouldn't have to think about them in in any... In any more, beyond, you know, losing, you know, losing your principal or something. I mean, rewards can be exciting, but but the asset themselves should be pretty boring in terms of how they operate.

Yeah. Do you, just last question on my side. You mentioned just the ICO craze that I think drove a level of interest in this market that was really positive. Like, I think a lot of people, myself included, who found themselves now seriously working in crypto and digital assets largely entered the market during this era where, like, there's a ton of, like, oh, what's going on here? Opportunities.

I think we've lost some of that, and I'm wondering from your perspective, like, do you think we're almost gonna go through another phase with some of the latest, like, CFTC, SEC regulations coming out with private markets skyrocketing, with more primitives like USDV, like, are we gonna go through another version, maybe a more mature version of the ICO craze again, like, before 2,030? Like, do you think that's possible? Or how do you think...

Like, something has to happen here, like, the way that companies form and grow, like, are we on on the horizon of another one of those, do you think?

I I think so. I mean I mean, you look at what's happening in in in in how companies are IPO ing now. Right? They're IPO ing later and later. Retail's getting less and less of of of the upside of these companies, Anthropic, you know, OpenAI, all of the big ones. Right? And a lot of the companies are choosing to stay private now, some, you know, Stripe, for example. Right? And so I think there's a huge demand for people to invest in in in promising projects and and and businesses. And so there's...

The demand side is there from retail and just anyone, I would say, also just regular funds and VCs, etcetera. So I think I think the idea is just, you know, the core of it is... A lot of it is what MetaDAO is trying to solve, which is that how can we give these offerings where we can establish a level of trust that... Yeah. They're they're not going to be rugs. They're not going to be frauds, where it's just a pure money grab and people run off like we saw in 2017. Right?

And also just the games that were played around tokens for most of twenty twenty twenty beyond. And I think, like, part of this is all, like, maturing of the industry, people... More serious builders coming in and developing these products. But, also just, I think, regulations have... Are gonna play a huge role here with...

When we start to get clear regulations as we are now, it's going to allow for companies like ourselves and others that are that are coming about, more of them, to be able to launch tokens and and exist. So I I... I'm I'm very bullish on on the next few years of of crypto more so than I've ever been, and I've been around since 2014. So Yeah. I I think the opportunity is going to be immense. And I think I I will say again, I think, you know, in... On the stablecoin side of things, the stablecoin wars have started.

Right? And they're going to dictate the next few decades of American power, And and we're going to see the full force of the American administration and and Washington back these markets. Like, that is... I think anyone who's paying attention for the last few years will will have observed this. Like, this is what's happening. This is why you have OUSD. This is why you have JPMorgan and banks coming out launching their stablecoin. It's not... These are not, you know, p o...

You know, sort of pet projects or experiments. These are full... Fully stepping in and and understanding that there's a convergence that's happening with the regular TradFi markets and and and on chain markets. And tokenization and Internet capital markets is the future.

Hell, yeah. Hell, yeah. Alright. We gotta we gotta transition. I did wanna ask one last thing. I would be just because Martin from Mountain Protocol was recently hired into Coinbase at the exec level, I think now leads their stablecoin business. I was thinking about USDM, the Mountain Protocol. I believe Anchorage acquired that business cup... Couple years ago now maybe. Like, how do you...

When I think about what they were building, I remember talking to their team early on, and like rewards flowing just like programmatically and natively to that asset. Like, do you see some of what you're building or or most of what you're building is like a very similar type of mentality for those who are familiar with Mountain Protocol USDM? Is it is it very similar in your mind or different?

Yeah. There's there's definitely, similar beats of... Around around that. So, yeah, I I I... The core infrastructure that we're building is again around this thesis of of your asset, but many many relationships, many economic relationships. And the stablecoins are just one market here, so it's not just... It doesn't just stop there. So think about the tokenization of stocks and equities. How do dividends get distributed? What are the rules behind who gets those dividends, what policies apply. All of this is...

Needs to exist and a lot of the infrastructure that we're building is directly applicable for that use case.

I think what's different here between Mountain Capital and us is that it's again a maturation of of, like, thinking about and separating out the asset from the economics in a way that economics can be distributed completely independently of the asset and in a way that doesn't introduce new risk or smart contract risk, and allows you to be very granular about how those economics are distributed and how those relationships, can come about. So, I I think in lot of ways, there's there's a lot of similarities to USDM.

There's a whole regulatory trail we can go down that we're not going to, but, there's a lot there too. For another conversation. Another conversation part the

future Ranga. Thanks for coming on today. Appreciate you being game to hop on, and we'll be sure to have you on in the future. Oh, we'll see you at Breakpoint.

I'll see you at Breakpoint. Love the show. Keep it up, guys. Take it easy. Thanks. See you.