FTX Fallout to DeFi Leader: SwissBorg CEO&Founder Cyrus Fazel on Solana’s Comeback

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As I delve deeper into the fascinating world of blockchain and decentralized finance (DeFi), I find myself increasingly captivated by Solana’s potential to revolutionize this space. Coming from a background where I have witnessed firsthand the transformative power of technology, I can confidently say that Solana’s unique blend of speed, scalability, and affordability sets it apart from other blockchains.

Following the demise of FTX at the end of 2022, which raised concerns due to Solana’s ties with the exchange and Alameda Research, Solana showed its strength and adaptability by emerging as a preferred choice for swift, cost-effective decentralized applications in 2024.

To delve into why Solana is experiencing a resurgence, BeInCrypto had a conversation with Cyrus Fazel, co-founder and CEO of SwissBorg – a well-known crypto asset management firm. Initially doubtful about Solana, Fazel now advocates for its incorporation within SwissBog’s operations and its potential impact on the evolution of decentralized finance (DeFi).

SwissBorg, established in 2017 and headquartered in Switzerland, is a digital wealth management platform that aims to make investing in cryptocurrencies open to all. By offering an intuitive app and focusing on community engagement, it enables users to purchase, sell, and handle multiple crypto assets safely.

The heart of SwissBorg’s offerings lies in its Smart Engine, gathering prices from various trading platforms to provide users with the most favorable exchange rates for their transactions. Transparency is a key focus on this platform, providing tools such as portfolio analysis and performance monitoring, allowing users to make well-informed decisions.

Skepticism and Early Impressions of Solana

In the early 2020s, Fazel openly expressed his initial reservations about Solana because it had strong connections to FTX and Alameda Research, two organizations that raised concerns for him. As he put it, “When I discovered that Alameda owned a tenth of Solana’s total supply, I couldn’t help but think this situation wouldn’t have a happy ending.” For Fazel, the concentration of tokens was a significant issue, and he worried that any future mass selling of assets could damage the network’s prospects for long-term growth.

His initial response wasn’t purely professional but also had a personal touch. As he confessed, a tinge of envy was present, as FTX was leading the market in 2021, and their persistent marketing of Solana was difficult not to be swayed by the excitement.

Initially, Fazel’s team at SwissBorg had a different view of Solana. The engineers within his team were drawn to its technical prowess, frequently tinkering with it during hackathons or personal projects. He later noted that they saw the potential in Solana before he did.

The pivotal moment occurred when SwissBorg’s Chief Technology Officer (CTO), Nicolas Rémond, provided an in-depth examination of Solana’s infrastructure. He pointed out that Solana was the only blockchain supporting DEXs using the CLOBs system (centralized limit order books). Upon seeing the data, Fazel admitted there was no more room for debate – it was evident that they were years ahead, prompting SwissBorg to embark on their journey with Solana.

In late 2022, when FTX collapsed, Solana found itself in a vulnerable state due to its close connection with the exchange. The exchange’s fallout had a significant impact on Solana’s reputation, causing its token price to plummet sharply. Many skeptics were quick to predict that Solana would not survive. At first, Fazel also harbored these concerns, admitting that he struggled to envision a recovery from such severe damage: “At the time, I couldn’t imagine Solana surviving; it seemed impossible to bounce back from something so damaging.

After what transpired next took many, even Fazel, by surprise. Instead of succumbing to defeat, the developers and community of Solana showed remarkable tenacity by continuing to construct and build. As Fazel put it, “They refused to be defined by their setbacks. They continued to innovate, hosting hackathons, and launching new tools. Such resilience is seldom seen in the crypto world.

Fazel attributed a significant portion of Solana’s comeback to the guidance provided by the Solana Foundation, particularly from its president, Lily. He noted that she kept her sights set on the long-term goals instead of being swayed by token prices or popular sentiment. The foundation’s unwavering focus and support for its developers allowed Solana to withstand difficult times, Fazel remarked. “Many projects might have crumbled under such pressure,” he added, “but Solana demonstrated their commitment to the long haul.

The resilience displayed by Solana after this significant incident underscores its robustness, as far as I’m concerned.

The Place in SwissBorg’s Ecosystem

Currently, Solana significantly contributes to SwissBorg’s functionalities, particularly by incorporating prominent Decentralized Exchanges (DEXs) such as Orca and Raydium into SwissBorg’s composite exchange platform. This multi-exchange system is fueled by a combination of 11 centralized and decentralized exchanges, facilitating trades to be distributed and fractionalized across various order books, ensuring optimal liquidity and rates. As a result, it frequently surpasses other market competitors in terms of performance.

Fazel often explains a frequent situation: A SwissBorg user seeks to trade Swiss Francs for the BORG token. Usually, this process entails exchanging francs for Solana through a centralized exchange (CEX), and subsequently using Solana to procure BORG, whether on a CEX or a decentralized exchange (DEX).

High gas fees render DEX usage inefficient because the costs would surpass the advantages, as Fazel stated.

Via Solana’s affordable transaction costs, the process becomes practical, allowing SwissBorg to emphasize Decentralized Exchange (DEX) trading when it provides more competitive pricing. Moreover, SwissBorg has incorporated a function that combines numerous DEX transactions into a single command.

As an analyst, I’d like to share that we bundle five to ten transactions together to further decrease costs. This grouping not only helps in reducing fees but also lessens the risk of falling prey to Maximal Extractable Value (MEV) attacks. In simpler terms, by merging transactions, there’s a lower likelihood of getting trapped between transactions, often referred to as ‘getting sandwiched’.

Solana’s rapid speed and ability to handle large amounts of data (scalability) have been crucial in enabling SwissBorg to expand its services. Fazel emphasized that this scalability equates to enhanced user experiences. He further stated, ‘It’s not just about the technology; it’s about offering effortless tools for our community. Solana makes this possible.’

In SwissBog’s system, Solana plays a significant role, but Fazel emphasizes the importance of diversification. He stated, “Using just one blockchain could be hazardous. It contradicts the very essence of decentralization,”” he explained.

SwissBorg adopts a cautious, “Swiss” method in embracing blockchain technology, meticulously assessing various possibilities. As Fazel explained, the company is investigating compatibility with platforms like Base and Arbitrum that utilize Ethereum Virtual Machine (EVM), but has not yet made a definitive choice. In his words, “At present, we haven’t found the ideal match.

Fazel emphasized that this careful strategy involves investigating potential grants and alliances to ensure our work is in harmony with significant teamwork. He pointed out, “We value recognition of our efforts within the collaborative community.

In relation to Solana, Fazel clarified that SwissBorg has always aimed to develop tools that advantageously serve their users and the larger ecosystem without relying on external funding. He put it simply, “We’ve consistently tried to help ourselves in a mutually beneficial manner, which has proven successful.” This approach forms the basis for SwissBorg’s continued pursuit of new blockchain collaborations.

Solana’s Role in the Future of DeFi

The blend of speed and low transaction costs offered by Solana makes it an optimal platform for constructing decentralized finance (DeFi) tools. Its capacity to handle a large number of transactions at a minimal cost gives it an edge over other blockchains, making possible projects that could be impractical on platforms with higher fees. For SwissBorg, these features are crucial in developing financial tools that are both efficient and affordable for users.

Fazel also expressed thoughts on the increase of projects driven by fair launches and communities. Although he admitted that tokens like meme coins might appear trivial at first glance, he underscored their role in maintaining a lively ecosystem. As he put it, “Meme coins and fair launches attract new participants to the field. They foster interaction, which is essential for expansion.

The company has delved into Solana not just generally but specifically focusing on liquid staking, an area they’ve been deeply investigating together with Jito. As Fazel explained, SwissBorg has been working closely with Jito, primarily concentrating on liquid staking. This exploration eventually led them to contemplate re-staking, a concept that has stirred debate due to its emerging nature but holds promise. Fazel further stated, “We’ve been testing re-staking and we believe it still offers potential.

In addition to Solana, SwissBorg has established a close partnership with EigenLayer, making it one of the leading providers of ETH and USDC within its protocol. As stated by Fazel, many of our users have reaped successful token farming yields, with strong returns on their investments.

He pointed out that EigenLayer’s approach to business revolves around risk management across various Layer-2 networks, which gives it a more specialized use case. In simpler terms, they have created something robust, but its applicability hasn’t been fully demonstrated yet. However, the fact that $15 billion is locked in their system (TVL) is quite remarkable, he added.

Instead of adopting a similar strategy, Jito opts for an innovative method by integrating MEV (Maximal Extractable Value) rewards into its liquid staking mechanism. As Fazel pointed out, this approach of distributing MEV rewards to data nodes and validators is quite unique.

Following the lead of this model, Kyros.fi has recently established a re-staking mechanism on Solana in collaboration with Jito. According to the CEO, this development is a significant stride for DeFi on Solana and promises increased rewards delegated to various validators. The protocol is set to launch within the next few weeks, emphasizing its potential to boost user engagement without demanding substantial TVL (Total Value Locked).

As a crypto investor, I’m excited about the potential DeFi holds and Solana’s continued role in this landscape. In my perspective, Solana’s robust features keep us at the cutting edge of DeFi developments. For SwissBorg, our mission to democratize finance remains deeply rooted in the blockchain technology. Solana’s scalability, cost-effectiveness, and adaptability make it a trusted ally in creating tools that put users in control.

In my role as an analyst, I can say that while we’re constantly seeking new opportunities with other blockchains like Sui, Solana remains a crucial component in our vision. It significantly contributes to our goal of empowering individuals to manage their financial destinies effectively.

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2024-12-11 19:07