Interview with Solstice Founder: How to Redefine Yield on Solana through First Principles

By the end of November 2025, Solstice Staking, in collaboration with the Liechtenstein Trust Integrity Network (LTIN), the Swiss crypto giant Bitcoin Suisse, and the decentralized staking protocol Obol, launched an institutional-grade Ethereum Distributed Validator Technology (DVT) cluster. This seemingly technical collaboration hides a grander ambition behind it.

On the same day, the DeFi platform Kamino in the Solana ecosystem announced the launch of the PT-USX token on the Solstice Market, offering a 16.5% fixed yield. At this time, Solstice's total value locked (TVL) had surpassed $320 million, with over 26,000 holders and 131,000 monthly active users.

Even more remarkable is that this protocol has not seen negative monthly returns since January 2023, with a full-year yield of 21.5% in 2024 and a 12-month rolling Sharpe ratio as high as 8.09.

Behind these numbers is a Ph.D. in Physics and Wall Street veteran, Ben Nadareski. He facilitated Goldman Sachs' first bitcoin-settled derivative transaction at Galaxy Digital and now has chosen to build an "institutional-grade" DeFi protocol on Solana. From a simple yield protocol to acquiring and managing $1 billion in staked assets at Bridgetower Capital, to collaborating with traditional financial giants to launch the DVT cluster, Solstice is actively demonstrating what it means to "break the yield monopoly."

Is this just another well-packaged DeFi narrative, or does it represent a leveling up of traditional financial forces against the crypto world? With these questions in mind, we engaged in a deep conversation with Ben Nadareski.

From Physicist to Wall Street "Defector" to Web3 "Visionary"

Ben's professional trajectory is filled with seemingly unrelated leaps: from exploring the fabric of the universe in physics to millisecond-critical financial trading and then to the decentralized crypto world. However, in his own view, all of this follows an intrinsic logic. Examining and transforming financial markets from a physics perspective is the underlying mindset he has never changed.

It is this unique perspective that made him thrive on Wall Street and also allowed him to see the future of cryptocurrency earlier. He led the world's first batch of crypto derivative trades with major banks, directly facilitating options trades settled in bitcoin between Goldman Sachs and Galaxy Digital. But this experience also made him acutely aware that there is a profound gap between the "old world" of traditional finance and the "new world" of crypto finance.

So, he chose to "betray" Wall Street and wholeheartedly dive into the DeFi wave. Solstice is the culmination of all his life experiences.

BlockBeats: With an academic background in physics, you later entered the traditional financial derivatives trading field, and eventually fully embraced Web3 in 2013. Could you share a bit about the journey behind these major career transitions? What key moments or beliefs prompted you to step out of your comfort zone time and time again and embrace a whole new field?

Ben: Academically, I fell in love with physics uncontrollably—facing this discipline that explores the fabric of the universe and answers humanity's ultimate questions is hard not to be captivated by.

I have always looked at economics from a physics perspective: if physics simulates the universe, then economics simulates human behavior. In my eyes, the market is a physical system, and assets are "fields."

Just like the "wave-particle duality" in physics, asset prices can be seen as discrete data points and as waveforms flowing over time. There is actually a profound underlying connection between physics and the market.

When I formally entered the traditional financial industry, I had already been devoting my spare time to cryptocurrency development. Soon, I realized that Crypto and DeFi are advanced forms of the entire traditional financial market—it is faster, more democratized, and discards the predatory nature of traditional finance.

The emergence of DeFi allows anyone to participate in accelerating the optimization of the global financial market. It breaks the old binary opposition, allowing us to engage in a genuinely meaningful career while also enjoying high returns.

Every pursuit of knowledge and career choice in my past has converged into today's Solstice, the inevitable crystallization of all my life choices.

BlockBeats: From rigorous scientific research to millisecond-sensitive trading desks, and then to the decentralized crypto world, how have these three starkly different environments shaped your thought framework? How do you apply the "first principles" and "scientific rigor" of nuclear physics to Solstice's product design and risk management?

Ben: The principles I borrowed from physics are numerous, but the most profound influence on me is the need to consider both subjective and objective perspectives when facing any challenge.

In physics, you do not truly understand a theorem unless you can validate it through a rigorous mathematical derivation; however, if you do not grasp where that theorem stands in the context of a macroscopic system, those mathematical formulas lose their meaning.

This logic similarly applies to the crypto space and financial markets: when building a new asset or tokenizing it, it is infeasible without a robustly scrutinized economic model validation; yet, at the same time, you must thoroughly consider how that asset will survive and operate within its target ecosystem.

Ultimately, the understanding and development of "value" are at the core of any successful DeFi product or asset. If you overlook economic validation of value creation or fail to see how the product integrates into the broader ecosystem, you are destined to lag behind in the wave of innovation.

In addition to value creation, this multi-variable analysis also applies to risk management. The role of traditional risk models is limited, and in a rapidly changing market like DeFi, you must incorporate qualitative factors into consideration.

How is market sentiment shifting? Which way is the political wind blowing in key regions? How is the retail market adapting to these changes? And how do whales interact and even manipulate market dynamics? Integrating analysis of these dimensions into the risk framework has become a prerequisite for any top DeFi protocol in today's market.

BlockBeats: You led the world's first batch of crypto derivative trades with major banks at Galaxy Digital. What profound insights did that experience give you into the convergence (or conflict) of traditional finance and the crypto world? How have these insights influenced the founding principles of Solstice?

Ben: One significant achievement during my time at Galaxy Digital was facilitating the first derivative trade settled in cryptocurrency by a major financial institution, namely, Goldman Sachs and Galaxy Digital's BTC-settled Non-Deliverable Option (NDO).

In the context of that time, this transaction was highly symbolic. For new products in the market, timing is often the most crucial variable. Despite the groundbreaking nature of that trade, the market's liquidity, participant depth, and risk management framework for pricing such trades had not evolved sufficiently to support rapid and widespread market adoption at that time.

However, that trade did pave the way for institutions to see the cornerstone of adopting crypto assets on a traditional finance (TradFi) trading desk and catch a glimpse of the future back then.

This is a typical example of the integration of traditional finance with cryptocurrency, but it falls on the CeFi (Centralized Finance) side of the CeFi-DeFi spectrum. I founded Solstice with a very clear purpose, which is to evolve to the other end of the spectrum, the DeFi side.

Over the past decade, I have been dedicated to building CeFi infrastructure in the crypto space while also exploring DeFi applications in my spare time. The birth of Solstice is to create "institutional-grade" DeFi without ever giving up on our core principles of democratized, permissionless, and transparent financial market access.

I spent years driving cryptocurrency and blockchain adoption in some of the world's largest institutions, and those lessons have been directly infused into Solstice to raise the industry standard for DeFi.

BlockBeats: Looking back at your journey from a physicist to a Web3 entrepreneur, what advice would you give your 20-year-old self?

Ben: Pulling an all-nighter won't kill you. Don't sell your Bitcoin to buy that car. Your mindset shapes your reality.

Solstice's Solar Strategy: How to Replicate Wall Street on Chain

Solstice's core mission is to "break the revenue monopoly." While this sounds quite revolutionary, the path to its realization is filled with a strong Wall Street flavor. They have adopted a strategy known as "Delta-Neutral," which has long been a staple for institutional traders in traditional financial markets.

In simple terms, the core of this strategy is hedging. By simultaneously taking opposite positions in the spot and futures markets to hedge against price volatility risk and profit from the price difference between the two.

This strategy, which has been live-traded in the parent company Deus X Capital's proprietary fund for 4 years, is now being seamlessly opened to everyone by Solstice through blockchain technology. Data shows that this strategy achieved a 21.5% return throughout 2024, with a rolling 12-month Sharpe ratio as high as 8.09. More importantly, this strategy has not posted a monthly negative return since January 2023.

In this chapter, Ben elaborates on how Solstice leverages funding rate arbitrage to capture returns and why this seemingly complex strategy is a solid choice in both bear and bull markets.

BlockBeats: Solstice's core mission is to "break the profit monopoly." Could you use a vivid analogy to explain to an ordinary investor who knows nothing about DeFi what Solstice is actually doing? Why is "institutional-level returns" important and worth looking forward to for them?

Ben: In short, Solstice makes accessing "institutional-level returns" achievable.

Whether your principal is $50 or $50 million, through Solstice, you can enjoy an equally competitive yield.

On the other hand, index funds, traditional passive investment tools, and retail stock market investments often only offer single-digit annual returns, with high volatility, sometimes even experiencing negative annual growth, not to mention enduring high fees and layers of intermediary exploitation.

At Solstice, all you need to do is connect your wallet to earn interest with stablecoins, with funds locked for only 7 days. Apart from performance fees (meaning Solstice only takes a small portion when you make money), there are no hidden charges.

For an investor without a DeFi background, after understanding stablecoins and completing the deposit, the final psychological hurdle they typically face is "where does the yield come from."

Simply put, we deploy funds into a market-neutral strategy. The specific approach involves executing trades to capture the price difference between spot prices and perpetual contract prices—depending on the futures term, this is known as "funding rate arbitrage" or "basis arbitrage."

This is a market dynamic that naturally exists in any financial market. In the traditional financial sector, due to the highly mature market, this arbitrage space has been squeezed very narrow; whereas in the crypto space, given the market is not yet fully efficient (or relatively young), this arbitrage space is still at a high level.

This strategy does not hold any directional positions (meaning, we do not go long or short on any cryptocurrency or other asset). This allows investors to enter the crypto market in a neutral stance, at the lowest risk level in the entire crypto space, earning attractive returns (for the knowledgeable, Solstice boasts a 12-month rolling Sharpe ratio as high as 8.09).

And the best part? Leveraging this natural arbitrage mechanism in the crypto market, combined with Solstice's trading strategy, we achieved a 16.2% return in the past 12 months and even reached 21.5% in 2024.

This strategy has been live-traded for 4 years at the parent company Deus X Capital through a proprietary fund. Now, through a transparent and secure on-chain track, we have opened up this strategy to everyone without any barriers.

BlockBeats: Solstice has chosen the Delta-Neutral strategy as its revenue engine. Compared to protocols with similar strategies, what is Solstice's core barrier? Is it the team's trading experience, a unique algorithmic model, or the infrastructure advantage on Solana?

Ben: We never outsource revenue sources, nor do we engage in low-liquidity speculative opportunities. We have a strong team of trading, operations, and risk management experts who have been managing funds in the billions for years using this strategy.

Solstice's Delta-Neutral strategy has three core principles that set it apart from many similar products:

Built for billion-scale: Our strategy and protocol architecture are designed to accommodate funds in the tens of billions, with extremely high scalability;

True Delta neutrality: We are a true neutral strategy. The intense liquidation and volatility in the market on October 11th were the best test, proving that Solstice remains rock solid in noise and turbulence;

Not limited to mainstream assets: Through partnerships with Binance and Ceffu, we can not only conduct fund/basis arbitrage on core crypto assets (such as BTC, SOL, ETH, etc.), but also cover long-tail assets. The key is that our execution standards for these long-tail assets are completely consistent with mainstream assets, strictly following institutional-grade principles.

In addition to these three pillars, Solstice has introduced two additional measures aimed at providing the community with optimized and secure revenue, especially during periods of compressed funding rate arbitrage space:

Hedged collateral, which involves staking the underlying spot assets (earning staking rewards) while conducting funding rate arbitrage trades (to hedge price risk);

Tokenized sovereign debt allocation.

These two additional measures enable Solstice to maximize returns even in periods of low funding rates while maintaining Delta neutrality.

BlockBeats: According to your data, the strategy has achieved an extremely low drawdown and 100% monthly positive returns. Could you please explain in detail how you have achieved this level of ultimate risk control? How will your strategy respond to extreme market conditions?

Ben: Exactly. Verified by third-party audits, since January 2023, Solstice's strategy, managing funds in the scale of billions of dollars, has never experienced negative monthly returns.

The reason behind this is the core of the Delta-neutral strategy—that is, not taking on directional market risk.

We always maintain a market-neutral position and conduct trades in the world's deepest crypto liquidity pool through centralized exchanges like Binance (CEX).

Most importantly, we have a seasoned team of traders, operations, and risk control experts who monitor these positions 24/7. Once any risk threshold is triggered, we immediately engage in funding rate arbitrage or switch hedged collateral positions to safe-haven assets (such as tokenized government bonds) until the rate rebounds to an attractive level.

In terms of asset security, all our assets are custody-guaranteed by industry-leading service providers (including Copper and Ceffu).

October 11th was a perfect stress test case. On that day, the largest single-day liquidation event in industry history occurred, but Solstice's performance was as follows: 0 redemptions, 0 strategy losses (in fact, positive returns were still generated that day), and our stablecoin remained anchored.

I always encourage potential investors to delve into researching such stress test events rather than just taking my word for it—because data is always the most powerful proof.

From Yield Protocol to Institutional Infrastructure

Solstice has chosen Solana as its main battlefield. In Ben's view, this is the only Layer 1 blockchain that can provide the "one-two punch" institutions truly care about: deterministic execution, sub-second finality, and high throughput.

However, Solstice's ambitions go far beyond this. The four-way collaboration on November 26, 2025, revealed Solstice's grander strategic layout. Through the joint launch with Liechtenstein Trust Integrity Network (LTIN), Bitcoin Suisse, and Obol of an institutional-grade Ethereum DVT cluster, Solstice is transitioning from a mere DeFi yield protocol to institutional-grade digital asset infrastructure.

What makes this DVT cluster special? It allows multiple independent operators to collaborate in running Ethereum validators, eliminating the risk of a single operator failure, increasing uptime, and decentralization. More importantly, it operates on institutional-grade infrastructure in Switzerland and Liechtenstein, compliant with EU and Swiss regulatory requirements.

This means Solstice is no longer content with being a high-yield DeFi protocol on Solana; it aims to be a bridge connecting traditional financial institutions with the crypto world. From acquiring Bridgetower Capital in December 2024, managing a $1 billion ETH staking service, to launching the DVT cluster in collaboration with traditional financial giants in November 2025, Solstice is building a cross-chain, cross-ecosystem institutional-grade digital asset infrastructure network.

BlockBeats: Your stablecoin USX is designed as a "yield asset." Could you please explain the specific sources of its yield? Does holding USX mean entrusting funds entirely to Solstice's strategy team?

Ben: Here, a small misconception needs to be corrected: Solstice's stablecoin USX itself does not inherently possess yield properties.

It is pegged 1:1 to the US dollar and is over-collateralized (>100%) with USDC and USDT as underlying assets.

The initial design of USX aims to achieve seamless, fee-less transactions within the DeFi ecosystem, greatly enhancing capital velocity. Currently, it has been integrated into a range of partner app ecosystems.

In addition, we are implementing the Flares program. Users can earn points by using and holding USX, which will be converted into SLX—Solstice's native token—in an upcoming TGE.

In terms of market positioning, USX is currently the 5th largest stablecoin on the Solana chain and a top 25 stablecoin globally, with a $320 million market size backing.

It is precisely this transparency and resilience through turbulent markets that have established a solid trust foundation for USX in the community. We are very excited to expand our business globally, allowing everyone to participate and share in the dividends brought by Solstice.

BlockBeats: Why Choose Solana as the Main Battlefield? Despite Solana's outstanding performance, it has also experienced challenges with network stability in the past. In terms of accommodating institutional funds and high-frequency strategies, what additional safeguards have you implemented to ensure stability?

Ben: We chose Solana because it is the only Layer 1 blockchain that can provide the "combo" that institutions truly care about: deterministic execution, sub-second finality, and enough throughput to support continuous liquidity and high-frequency strategies without sacrificing user experience.

Solana is not only theoretically fast— in the real market, it settles millions of transactions per hour, produces a block every 400 milliseconds, confirms transactions in about two seconds, and costs only a fraction of a cent.

For Solstice, we don't just care about the raw TPS (transactions per second) data to show off, but rather the "economic throughput" and composability that come with cheap and abundant block space.

Currently, Solana settles approximately 30% of the global on-chain spot trading volume, processes billions of dollars' worth of perpetual contracts weekly, and underpins one of the largest native stablecoin ecosystems in the crypto space. This liquidity density and developer concentration enable us to build real-time institutional-grade yield components—no batching, no latency windows, and no drastic gas fee fluctuations.

Regarding past instability concerns, two years ago, such worries were valid, but now the network architecture has undergone fundamental changes.

Proof of History (PoH) gives Solana a deterministic global clock, Turbine accelerates block propagation. And recently, the Firedancer validator client developed by Jump Crypto has brought an exciting upgrade—it introduces the second fully independent implementation of the Solana runtime.

In testing, Firedancer has already achieved millions (seven figures) of TPS, but the greater significance behind this is resilience: two independent clients significantly reduce the risk of a single implementation and substantially enhance the network's liveliness. This is how you build an L1 that is not only faster but also structurally more stable.

On our end, Solstice has added an additional set of safeguards to ensure that institutional-scale funds can perform predictably even during periods of volatility.

We have equipped ourselves with an internal circuit breaker mechanism, redundant oracles, isolated yield channels, and an automatic risk-throttling system to prevent our strategy from relying on any single external factor—including the blockchain itself. We view Solana as a high-throughput settlement infrastructure, but in designing our own system, we have accounted for stress scenarios, sudden surges in traffic, and tail risk events.

So, the short answer is: Solana provides us with the speed, determinism, and cost advantage we need, and we have layered onto it institutional-grade stability. When these two layers come together, you get a platform that can truly scale to tens of billions of TVL and millions of global users in yield and liquidity, without sacrificing security or settlement assurances.

BlockBeats: You have mentioned that many protocols claim to be decentralized but are actually centralized. What do you think is the root cause of this phenomenon? How will Solstice avoid this issue through its technical and governance design?

Ben: In my view, you can categorize all crypto or blockchain projects into the following four types:

Building a polished-back-end system for traditional finance;

Establishing institution-centric business processes within the crypto space;

Structuring DeFi into institutions to make it more easily adopted by the global retail market;

Exploring the limits of decentralization and permissionless markets.

While I have great respect for the explorers in the fourth category, in my view, that is where innovation happens, not where global adoption happens.

Solstice falls into the third category. We adhere to DeFi principles and practices on the one hand, while building robust, secure infrastructure around an access mechanism. We focus on mainstream applications rather than purely experimental innovation, aiming to merge the essence of both worlds.

Solstice steadfastly avoids two extremes: we will neither rebuild the old systems full of high barriers, high costs, layers of intermediaries, and permissioned access; nor will we act recklessly in the DeFi space without proper risk management.

Instead, we concentrate on building a trust layer for DeFi through robust, permissionless infrastructure, while developing a successful business model that allows both large institutions and retail investors to participate simultaneously.

In this vision, the best practices of blockchain will shine, while we also achieve the risk management and security features present in today's mainstream financial systems. This is the foundation on which Solstice enters the industry.

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