- DeFi Technologies introduces SolFi.
- SolFi to leverage staking SOL.
- Institutions can gain exposure to SOL.
As the crypto industry continues to grow, institutional interest in crypto assets has also grown. However, banks, pension funds, and other financial institutions lack a regulated way to hold crypto. For that reason, investment firms are creating new, regulated funds to bypass this issue.
DeFi Technologies is the latest investment firm to launch a fund for Solana. Its SolFi fund is the latest fund to call itself “MicroStrategy for Solana” after similar launches this year.
SolFi Launches as Another ‘MicroStrategy for Solana’
Solana took another step into the institutional space. On Tuesday, November 12, DeFi Technologies officially announced the launch of SolFi, an operating company focusing on Solana. The firm hopes to expose institutions to Solana’s performance, which has grown significantly this year.
SolFi will benefit from Solana’s performance on several fronts. The fund will combine staking and advanced validator operations to generate returns for investors. Notably, it will leverage a proprietary Maximum Extractable Value (MEV) engine to boost staking yields.
The company stated that its inspiration was Michael Saylor’s Microstrategy, a company highly exposed to Bitcoin. Olivier Roussy Newton, the CEO of DeFi Technologies, suggested that what Microstrategy did for Bitcoin, SolFi can do for Solana.
MEV Bots Come Under Fire
DeFi Technologies’ SolFi isn’t the first Solana fund to compare itself to Microstrategy. In September, Cypherpunk Holdings rebranded to SOL Strategies, launching its own fund. Similarly to SolFi, SOL Strategies would operate a validator node to take advantage of Solana’s staking mechanism.
Institutions running their own nodes, however, weren’t without controversy. Notably, Solana users recently criticized the tactic of using Maximum Extractable Value (MEV) strategies. Some validators would sell privileged access to MEV bots engaging in sandwich trades.
Notably, the Solana Foundation punished several validators for a practice that directly hurts regular Solana network users by removing them from its delegation program.
On the Flipside
- The recent Ethereum ETF approval was a boost for altcoins seeking institutional investments. According to analysts, Solana may be the biggest beneficiary.
Why This Matters
SolFi’s launch signals growing interest in investment opportunities on Solana’s staking and validation mechanisms.
Read more about MEV criticism for Solana:
Solana Validators Profit as Users Lose $30M in ‘Sandwich Trades
Read more about a new stablecoin, backed by Bitcoin:
Bitcoin-Backed Stablecoin Reaches $100M: Here’s How it Works
