Ep. 653: Why Solana is the Future of Blockchain with SOL Strategies

In this episode of Crypto 101, host Bryce Paul delves deep into the burgeoning world of Solana with esteemed guests Leah Wald, CEO of Soul Strategies, and Max Kaplan, CTO of Soul Strategies. As Solana continues to make significant strides in the blockchain arena, Leah and Max illuminate why their company is betting big on this high-performance network and how they're shaping the future of decentralized finance.

1. Guest Introductions and Backgrounds

Leah Wald brings a wealth of experience from the traditional finance sector, transitioning seamlessly into the crypto space. With a foundation as a world banker, Leah became captivated by Bitcoin's decentralization and its potential to transform financial systems. She joined the crypto industry full-time in 2017, co-founding Valkyrie Investments and pioneering some of the first crypto ETFs in the United States.

Max Kaplan shares a parallel journey, beginning his crypto exploration in 2014 with Bitcoin and fully immersing himself in 2017. Starting as one of the first engineers at Kraken, Max witnessed firsthand the exponential growth of crypto exchanges. His passion for Solana led him to establish Origin Ventures, which was later acquired by Soul Strategies, bringing him onboard as CTO.

[01:47] Leah Wald: "When I learned about bitcoin pretty early, it was the decentralization, not confiscatable, all the pillars that really excited me."

[03:22] Max Kaplan: "I was like, such a huge believer in Solana. I can't wait to talk about today."

2. Solana vs. Ethereum: A Comparative Analysis

A central theme of the episode is the comparison between Solana and Ethereum. While Ethereum has long been the dominant smart contract platform, Solana's superior speed and user experience are positioning it as a formidable contender.

Max Kaplan emphasizes Solana's technological advantages:

[09:57] Max Kaplan: "Solana is the fastest network out there. You are kind of alluding to Bryce of decentralized Nasdaq."

He highlights Solana's 400-millisecond block times compared to Ethereum's 12 seconds, underscoring the network's capacity to handle high-throughput applications without the congestion issues that Ethereum faces.

3. The Genesis of Soul Strategies: Building on Solana

Soul Strategies distinguishes itself by offering direct exposure to the Solana ecosystem. Leah elucidates the company's mission:

[14:04] Leah Wald: "We are a Solana tech company [...] we're building tech in the ecosystem. You want to invest in Solana, the blockchain, like a company that's building, that's what we built."

Unlike traditional investment vehicles that might offer indirect exposure through ETFs, Soul Strategies actively engages with Solana's infrastructure by investing in validators and staking, ensuring they are integral contributors to the network's growth.

4. Deep Dive into Validators and Staking Mechanics

The role of validators in Solana's network is pivotal, and Soul Strategies is at the forefront of this initiative. Max Kaplan provides an in-depth explanation:

[21:38] Max Kaplan: "We have the treasury side that, that Leah talked about and then we have the tech side, which is mostly staking right now."

Their approach includes running multiple validators with 0% commission on certain validators, ensuring maximal yield for stakeholders. Additionally, their newly launched mobile app, Orange Fin, simplifies the staking process, making it more accessible to retail investors.

[24:50] Max Kaplan: "We launched a mobile app which has been doing pretty well [...] it's really the first mobile app dedicated to Solana's native staking."

5. Understanding MEV and Sandwiching in Solana

To provide listeners with a foundational understanding, Max breaks down the concepts of Maximum Extractable Value (MEV) and sandwiching:

[37:32] Max Kaplan: "MEV stands for maximum extractable value. One of the forms of MEV is called sandwiching... you can think of it in terms of seeing the orders coming in on Dexes and placing an order to maximize."

Leah supplements this by equating these practices to illegal front-running in traditional finance, highlighting the ethical and regulatory complexities within decentralized exchanges.

[39:57] Leah Wald: "MEV is when someone tries to make extra money by changing the order of transactions in a block."

6. Strategic Partnerships: Pudgy Penguins

Soul Strategies' collaboration with Pudgy Penguins, a renowned NFT project originally on Ethereum, exemplifies their commitment to expanding Solana's ecosystem:

[31:02] Max Kaplan: "We partnered with Pudgy Penguins... we're running a validator for them as a joint venture."

This partnership not only brings a respected NFT brand into Solana but also demonstrates Soul Strategies' capability to support high-profile projects, fostering a robust and diverse decentralized ecosystem.

7. Navigating Market Volatility: Resilience and Strategy

Addressing the inherent volatility of the crypto market, Leah Wald shares insights on how Soul Strategies remains resilient during bearish phases:

[41:43] Leah Wald: "Bear markets are for builders. The luxury is that we have capital. The difficulty is when you don't and when you're a startup, you get knocked out."

With substantial liquidity, diversified investments, and a focus on Solana's long-term potential, Soul Strategies positions itself to weather market downturns while continuing to innovate and scale within the ecosystem.

8. Regulatory Landscape and Its Implications

Regulation remains a critical factor in the crypto industry's evolution. Leah discusses the impact of SEC's evolving stance on Solana and validators:

[45:24] Leah Wald: "We're very excited that JITO and Multicoin and a lot of other companies in the space have gone to the SEC already... we're feeling comfortable where we're at."

The approval of Solana-specific ETFs in Canada further underscores the increasing institutional acceptance and the potential for broader market adoption.

[52:20] Leah Wald: "Solana ETFs were actually approved two weeks ago in Canada... I think that at least I'm feeling pretty optimistic that [U.S. approval] maybe in the next two quarters."

9. Future Outlook: Five Years Ahead

Looking forward, both Leah and Max share optimistic visions for Solana and Soul Strategies:

• Max Kaplan envisions Solana transitioning from a platform dominated by meme coins to one facilitating real asset trading and decentralized physical infrastructure:

  [49:30] Max Kaplan: "In five years, we're going to move away from this meme coin craze and start seeing real assets being traded on chain."

• Leah Wald emphasizes ongoing technological advancements and strategic collaborations within the Solana ecosystem:

  [50:26] Leah Wald: "The more tech we can build, the more powerful tech we could build. We're just... we believe that by being collaborative, it's going to work out."

10. Staying Connected: Follow Your Journey

Listeners eager to stay updated with Soul Strategies can connect through their social media channels:

• Twitter: @Soul_Strategies, @MaxEKaplan, @LeahWald
• LinkedIn: Soul Strategies

[53:54] Leah Wald: "Everything's on our website and has a link, but if you want to just slide into the DMs, all of us are there and we love chatting."

Conclusion

Ep. 653 of Crypto 101 offers a comprehensive exploration of why Solana stands poised to lead the next wave of blockchain innovation. Through the expertise of Leah Wald and Max Kaplan, listeners gain valuable insights into the technical, strategic, and regulatory factors driving Soul Strategies' dedication to Solana. As the blockchain landscape evolves, Soul Strategies exemplifies resilience, innovation, and a forward-thinking approach essential for thriving in the dynamic world of crypto.

Notable Quotes:

• Max Kaplan ([09:57]): "Solana is the fastest network out there. You are kind of alluding to Bryce of decentralized Nasdaq."

• Leah Wald ([14:04]): "We are a Solana tech company [...] we're building tech in the ecosystem."

• Max Kaplan ([24:50]): "We launched a mobile app which has been doing pretty well [...] it's really the first mobile app dedicated to Solana's native staking."

• Leah Wald ([41:43]): "Bear markets are for builders. The luxury is that we have capital."

• Max Kaplan ([37:32]): "MEV stands for maximum extractable value. One of the forms of MEV is called sandwiching..."

• Leah Wald ([52:20]): "I think Solana ETFs were actually approved two weeks ago in Canada... I'm feeling pretty optimistic that [U.S. approval] maybe in the next two quarters."