- DeFi Technologies introduces SolFi.
- SolFi leverages SOL staking.
- Institutions may be exposed to SOL.
As the cryptocurrency industry continues to grow, institutional interest in cryptocurrency assets has also increased. However, banks, pension funds, and other financial institutions lack a regulated way to hold cryptocurrencies. For this reason, investment firms are creating new regulated funds to get around this problem.
DeFi Technologies is the latest investment firm to launch a fund for Solana. The SolFi fund is the latest fund to call itself “MicroStrategy for Solana,” following similar launches this year.
SolFi launches another ‘MicroStrategy for Solana’
Solana has taken a step further into the institutional space. On Tuesday, November 12, DeFi Technologies officially announced the launch of SolFi, an operating company focused on Solana. The company hopes to inform institutions of Solana’s significant growth this year.
SolFi will benefit from Solana’s performance in several ways. The fund will combine staking and advanced validator operations to generate returns for investors. In particular, we will leverage our proprietary Maximum Extractable Value (MEV) engine to increase staking yields.
The company said it was inspired by Michael Saylor’s Microstrategy, a company with heavy exposure to Bitcoin. Olivier Roussy Newton, CEO of DeFi Technologies, suggested that SolFi could do for Solana what Microstrategy did for Bitcoin.
MEV bots are under attack
DeFi Technologies’ SolFi is not the first Solana fund to be compared to Microstrategy. In September, Cypherpunk Holdings rebranded as SOL Strategies and launched its own fund. Like SolFi, SOL Strategies operates validator nodes to utilize Solana’s staking mechanism.
However, the agency running its own node has not been without controversy. In particular, Solana users have recently criticized the tactic of using the Maximum Extractable Value (MEV) strategy. Some validators sell privileged access to MEV bots that participate in sandwich trading.
In particular, the Solana Foundation punished several validators by excluding them from the delegation program for practices that directly harmed regular Solana network users.
On the flip side
- The recent approval of the Ethereum ETF has given a boost to altcoins seeking institutional investment. According to analysts, Solana the biggest beneficiary.
Why This Matters
The launch of SolFi signals growing interest in investment opportunities with Solana’s staking and verification mechanisms.
Read more about MEV criticism of Solana:
Solana validators profit as users lose $30 million in ‘sandwich trade’
Learn more about the new stablecoins supported by Bitcoin.
Bitcoin-Based Stablecoin Reaches $100 Million: Here’s How It Works