Interview with Cian, Founder of Keel

Exciting times in the world of Solana DeFi, as today I have the pleasure and privilege to introduce to you Cian, founder of Matariki Labs, contributors to Keel.

1. Cian could you please in short describe what you have built at Keel?

Keel is an onchain capital allocator, focused on unlocking scale for Solana’s DeFi and Tokenized Asset markets. As a ‘Star’ in the Sky (formerly MakerDAO) Agent Framework, Keel is empowered to support onchain credit creation at scale, with the goal of expanding and improving the stability of developing onchain financial ecosystems. 

At its core is the Keel Capital Engine, a decentralized protocol integrated directly with DeFi and RWA protocols across the Solana ecosystem, dynamically reallocating capital between areas such as DeFi lending, stablecoin swap liquidity, tokenized real-world assets, and other sources of high-quality yield.

2. Could you tell us a little bit about yourself and your background in the industry?

I lead a team of engineers and quantitative risk specialists in @MatarikiLabs, the leading contributors to Keel.

I began my career in traditional finance as an actuary, where post-qualification, my focus was on designing and building complex systems for insurers, reinsurers, and banks. These systems were designed to understand and manage risk, support asset-liability management, and ensure capital adequacy within regulatory frameworks.

I’ve long had a curiosity for blockchain technology — and more specifically DeFi — but my first encounter with Solana in late 2020, was the moment where I recognized a real potential for open, composable finance at scale, and it became an obsession I couldn’t put down. I left my traditional finance role behind shortly after and have been building systems at the intersection of protocol architecture, risk, and capital on Solana ever since.

Most recently, I’ve been part of the team of Sky contributors focused on developing the infrastructure, integrations, and relationships within Solana to support Sky’s expansion and lay the groundwork for what is now Keel. It’s been incredibly exciting to operate at the intersection of these two worlds and see DeFi mature so rapidly. Today, we’re building systems and infrastructure that not only match, but actually exceed the durability of many traditional finance risk and capital adequacy systems, all within an open and decentralized setting. 

3. What led you to the conclusion that Solana was in need of what you refer to as a “Capital Engine”

I’m a huge believer in Solana’s ‘Internet Capital Markets’ — which, in short, hinges on the belief that the solution to scaling onchain finance is not in sharding, silos, and fragmentation, but a solution that enables high-frequency activity like credit creation and price discovery to occur on the same layer as settlement. In my view, Solana is incredibly well-positioned to be the home for a really large proportion of the trillions of dollars predicted to come onchain in the next decade.

Solana continues to lead the way on almost every performance metric and across many use cases. However, there are two areas where I believe Solana remains constrained — both of which Keel intends to play a major role in solving. 

Firstly, Solana has historically relied entirely on fiat-backed stablecoins, like USDC, and has lacked adoption of a debt token, like DAI or USDS — this continues to cause issues for DeFi markets, leading to rate spikes, which discourage borrowers at scale, limiting overall growth.

Debt token stablecoins enable DeFi native credit creation (analogous to M1 & M2 creation in traditional banking), which combined with an onchain capital allocator like Keel, unlocks highly responsive, scalable liquidity for lending markets. This eliminates spikes in borrow rates, increasing stability for borrow-lend markets, and enabling borrowers to scale their exposure. This cannot be achieved with fiat-backed stablecoins, due to a reliance on traditional banking rails, which constricts the scalability of supply on demand.

Secondly, Solana has been constrained by the lack of an institutional-scale onchain balance sheet. On other networks, onchain stablecoin treasuries have played a dual role as anchor liquidity, and as a catalyst driving new issuances. 

In the case of tokenized assets, most blockchains operate on the EVM, and, as a result, this is what issuers primarily design their tokens to be compatible with. Issuers require a significant incentive to deploy extra resources for SVM compatibility — and this is the role an onchain balance sheet at scale plays, effectively operating as ‘the big ticket buyer’ and creating a value driven reason to deploy on Solana that didn’t exist before.

4. How does Keel differ in its properties from other capital allocators? What are the benefits of the Sky Star model?

While there are a number of factors that differentiate Keel from more typical capital allocators, there are two key differences I would focus on:

The first is that Keel is a protocol, not a fund. All assets and positions remain wholly protocol-owned at all times. Balances never reside in externally owned addresses (EOAs), and no centralized custody is involved at any stage.

Secondly, Keel’s connection to Sky, as a ‘Star’, enables credit creation in a way that other allocators simply cannot achieve. As a Star, Keel can collateralize the aggregate of the assets on its balance sheet, creating net new stablecoin liquidity. This enables Keel to expand and contract the level of liquidity in an ecosystem with an unprecedented level of elasticity and responsiveness, which is a huge advantage for both Keel and the ecosystem when compared to traditional allocators who are constrained by their capital on hand.  

5. How will Keel interact with the current operational Stars, namely Spark and Grove, will there be any room for collaboration?

The Stars are in regular contact, sharing lessons and learnings. There will continue to be many opportunities to share and learn from one another, as well as scope to collaborate meaningfully on different fronts.

Spark and Grove have already been hugely successful in their own rights, showcasing what’s possible under their respective areas of DeFi lending and tokenized institutional credit. These first Stars are laying much of the groundwork that has enabled Keel to be built, and contributors to Keel will aim to play a similar pathfinding role wherever possible.

6. As you very well know, Spark focuses on onchain yield sources, while Grove allocates to RWAs. In its capital allocation strategy what will be the areas of focus for Keel?

Keel’s area of focus is defined more by the ecosystem—specifically, the Solana ecosystem—and less by the lines between DeFi and RWAs. In particular, an initial challenge for Keel will be the capacity for onchain lending on Solana, which currently is a much smaller market than, for example, some of the DeFi marketplaces Spark serves. 

Within the Solana ecosystem, Keel’s areas of initial focus are stablecoin lending markets and swaps, supporting a stablecoin ‘savings-like’ yield product, liquidity and TVL bootstrapping, and RWA yields, redemptions, and secondary liquidity. If you are interested in learning more about these areas of focus, then Stablewatch’s Project Spotlight is a great place to start.

7. What are the most interesting yield opportunities that you see on Solana and how do you plan to capitalise on them in the coming months?

Over time, we would like to see a larger and larger portion of Keel’s balance sheet move into onchain lending, where Keel has the greatest comparative advantage. However, the realities of the Solana lending landscape today, mean that RWAs will play a significant part in the allocation strategy in the short to medium term.

A particular focus in working with issuers will be identifying two broad categories of issuances, and working with issuers and those in the tokenization chain to eliminate points of friction for these issuances. 

Initially, this will involve driving the issuance of assets suitable for Keel’s direct holdings — assets that deliver an appropriate profile of risk, liquidity, and yield — while crucially meeting the requirements of an asset ultimately backing a stablecoin reserve. And separately, in working to bring other quality assets onto Solana, which have properties most suitable for collateral in DeFi lending, helping to grow onchain lending markets, and of course, Keel’s own capacity to provide stablecoin lending.  

8. What is Keel’s approach to risk management, how are you aiming to insulate the protocol from liquidity and default risks?

When we speak to institutions, there is often a real degree of (positive) surprise at the level of maturity in Keel and Sky’s approach to risk management. Sky has adopted its own form of ‘regulation’, which is heavily inspired by Basel III banking and capital adequacy regulations. These rules were designed to ensure that traditional banks and financial institutions remain appropriately over-collateralized and sufficiently liquid to meet their liability to depositors, and it's a really terrific starting point for Sky’s Agent Framework.These rules, defined in Sky’s ‘Atlas’, are the conditions attached to Keel’s ongoing access to Sky’s core primitives and are enforced both programmatically (i.e., by hard rules encoded into the smart contract) as well as through real-time independent monitoring by other actors in the ecosystem, such as risk managers like Block Analitica. Not to mention all of this is observable live on Sky’s public dashboards, and in even greater detail on Keel’s dashboard to come. As you’d expect, these rules are incredibly complex, but some of the core callouts are: thorough underwriting of any exposures across technical, credit, counterparty, legal, market, liquidity, and operational risks; maintaining ~25% of the balance sheet in immediately liquid high-quality fiat-backed stablecoins, ensuring ample liquidity for USDS redemptions; holding minimum levels of risk capital in excess of any liabilities, varying in degree, subject to the risks inherent. As well as, continuous and complete look-through analysis of every single underlying loan and lending exposure to which Keel is exposed across DeFi lending markets — with market shock simulations, exposure-at-default (EAD), and loss-given-default (LGD) modeling to dynamically determine appropriate risk capital levels or identify the need to automatically reduce exposures. In addition to transparent audibility of the entire balance sheet and capital adequacy in real-time.  Compare this to quarterly capital adequacy reporting, which is most commonplace in traditional institutions — the intention here is to set the standard for open, transparent, responsible, sustainable, and scalable capital allocation. With respect to technical risk (the risk of failures or exploits in Keel or Sky’s infrastructure and smart contracts) — the standards are incredibly high. Sky is one of the most longstanding and battle-tested protocols in DeFi, having experienced no major incidents since its inception in 2017. That’s no accident, and it stems from a culture of prioritizing security above all else — something that is readily adopted by Keel’s contributors and enforced by Sky. 

9. Please explain your role as a Pioneer Star in the Solana ecosystem and what responsibility that places on Keel in the Sky Ecosystem.

Sky recently introduced the concept of a ‘Pioneer Star’ — it’s a designation given to certain Stars that have a particular alignment in a new ecosystem that hasn’t historically had widespread adoption or support for USDS or other Sky primitives. For Keel, it means a number of additional areas of focus in addition to the core allocation and profit-seeking activities — in particular, this means working alongside other Sky engineering teams in continuing to develop and maintain Sky’s infrastructure for the Solana Virtual Machine, as well as managing and growing the partnerships throughout the Solana ecosystem.Most notably, it grants Keel domain over the Solana ecosystem alongside a sustainable flow of funding (the ‘Pioneer Fund’), which will provide millions of dollars of incentives to be directed through partners across the Solana ecosystem, aimed at growing widespread, sustainable adoption of USDS and shortly sUSDS, Sky’s yield-bearing stablecoin, coming soon to Solana.

10. On the topic of sUSDS, why do you believe this to be the premier savings vehicle in DeFi?

sUSDS is Sky’s yield-bearing stablecoin, offering holders access to the Sky Savings Rate (currently 4.75%) in the form of a continuously compounding yield. The Keel team is collaborating with Sky to provide native access to sUSDS on Solana, featuring instant (atomic) staking and redemption with no fees, spreads, or lock-up periods.

To date, Solana has lacked a simple and reliable source of high-quality tokenized yield, and those seeking yield have generally been forced to choose between low- or no-yielding offerings or higher-risk or more complex sources of yield.

In other ecosystems, sUSDS has demonstrated real product-market fit as a secure, stable, and trusted source of a highly competitive, low-risk yield — crucially, with genuine liquidity assurances. This is the case for individual savers and institutions alike. 

The simplicity of access to a tokenized source of yield makes sUSDS a much more suitable offering for individuals and entities that can’t or don’t want to deal with the complexity of more elaborate yield sources, such as DeFi lending markets.

I think we’ll see similar demands and use cases evolve for sUSDS on Solana once it's live, growing in line with the scale of adoption for USDS more generally.

11. Do you plan to launch any Keel specific financial products, similar to Spark’s sUSDC?

Keel’s initial focus is very much as an enabler to the ecosystem and not as a ‘product’ as such. It’s the infrastructure that catalyzes the flow of capital, which will have the greatest value to bring to the ecosystem, and that is where all priority will lie in the short term.

Beyond that, there is always an openness to understand more about what types of offerings or solutions Keel is well-positioned to deliver that best serve the needs and demands of Solana’s DeFi and tokenized asset landscape.

I certainly wouldn’t rule out the possibility of other yield-bearing offerings or products complementary in nature to Keel’s core areas of focus.

12. Sky Stars are intended to decentralise governance over time, what is Keel’s approach and timeline when it comes to decentralisation?

Decentralized governance is a key tenet of Sky’s ethos, and it’s a requirement under the Agent Framework that Stars are on a credible and relatively short timeline to launch their governance tokens and transition to full decentralized governance.

In the interim, key governance-level control sits with Sky, acting as the ‘trustee’ of Keel until its own governance has reached sufficient maturity. While work has already begun on Keel’s plans to transition to token holder governance, I would say that the focus will increasingly move to this after Keel’s core primitives are deployed and initial allocations begin to reach scale. The intention is very much for Keel’s governance to take place where Keel operates — on Solana.

13. What is your long term vision for Keel and the DeFi ecosystem on Solana?

By the time Keel’s potential has been realized, the Solana DeFi landscape will be unrecognizable in its scale and maturity. I don’t think many in the space appreciate the rate of change that is ahead of us. Onchain capital markets are anticipated to grow from current levels of approx. $30 billion to $20-30 trillion in the coming years — and these are serious, well-researched projections from the likes of Standard Chartered and BCG.There’s no doubt about it — the world’s assets are coming onchain. Composability of these assets in their tokenized form will unlock unprecedented potential for capital efficiency. This represents an entirely new paradigm for credit creation where DeFi programmability will enable lending against assets at a cost and scale that are almost incomprehensible in traditional finance today.From a technology perspective, Solana is incredibly well placed to be the home for a major share of the world’s future capital markets — and Keel is laying the groundwork to be the incumbent protocol for onchain credit creation in an ecosystem that will soon support trillions of dollars of collateral assets and lending.

14. Most importantly please let the readers know, how can they learn more about Keel and get involved in the launch phase of the protocol.

If you’d like to stay up to date with Keel and the project, you can follow me, Keel, and Matariki Labs on @Keel_Fi, @MatarikiLabs, and @CrocDundalk, or learn more at keel.fi.