The Road to Solana Becoming Traditional Finance with Anatoly Yakovenko

Added: 2026-05-09

[00:00:00]we can actually be traditional finance.

[00:00:02]>> This is one of the people quietly rewriting how global finance works. Meet Anatoly Yakovenko, one of the founders of Solana. It's completely open finance.

[00:00:10]See a full control over the entire stack. This network processed over a trillion dollars last year. It runs 24/7 and every line of code is open for anyone to read. My dream is that it's like Linux. And today he's sharing his entire vision for where markets are heading. Why the biggest trading [music] firms are now building on Solana instead of competing against it. His bold prediction for the next 10 years.

[00:00:33]>> There's not going to be a difference between DeFi and finance. We'll just call it all finance. And what every trader needs to understand right now.

[00:00:40]Because in this game the only enemy left isn't a competitor. You are fighting physics. And what what better thing can you possibly work on?

[00:00:50]Hey everyone. Today we have a very special guest, Anatoly Yakovenko, one of the founders of Solana. So thanks for joining us today.

[00:00:58]Thanks for having me.

[00:00:59]Yeah. Happy that you're here. So in this video we're going to be kicking off an education series that's teaching market infrastructure on Solana and how to build on it. So before we get into any of the deep questions, what is your elevator pitch to get someone interested in using Solana or building on it?

[00:01:18]I think what got me really interested in building Solana in the first place was that it's completely open finance. See a full control over the entire stack.

[00:01:29]Um how finance happens and um you know like this is 15 to 20 years ago before Solana was even an idea, I was having fun trying to build trading systems, trading bots, trading on like interactive brokers on traditional finance rails.

[00:01:45]And um you're kind of when you do that you learn that you're kind of trading with a black box. You don't know how any of the stuff actually works. What happens to your order, how it actually ends up from when you submit it to a broker to being filled on an exchange in an order book.

[00:02:02]And the cool thing about Solana is you have all the validator source code. You can run your own validator. You can get stakes. You can even participate in the block creation process. And you have full control over that entire pipeline.

[00:02:15]So you know exactly why things can go wrong. And many things can go wrong, but it's important to me as an engineer to understand why stuff can break and then have the ability to fix it or you know adjust my strategy.

[00:02:30]Yeah, I think that was kind of one of the reasons I got into crypto too. It's just you have everything that's permissionless and borderless and you have the ability to see the code and interact directly with it. And that kind of jumps into one of the other questions that I had and that was that you have talked a lot about your own frustrations in traditional markets. Like watching large institutions always have edge. You have co-location and order flow and just knowing the right people it puts you ahead of just anyone else that's trading. So you made a bet early on that a single global state machine was the answer. You have like on-chain borderless permissionless with full transparency. But one thing that has kind of been a topic of discussion was on Solana you have the block leader that has a temporary monopoly and that means the playing field isn't super even. But now we have constellation or multiple concurrent proposers that just came out and I wanted to hear your thoughts more on that. So you're removing the last unfair advantage here. To me it's more than that. We can actually beat traditional finance. So if you kind of get into the the last mile of how this stuff happens and you think of it from a physics as a physics problem, you have a bunch of information that's happen that's happening around the world that's relevant to markets. And the example that I always use is like you're sitting in Singapore in your high-rise, you know, hotel room and you see like a ship full of iPhones sink out of the harbor. That information is really important to markets and it's important to the company Apple.

[00:04:03]And that that app but that Apple stock is trading in New York. And there's a physical latency to get that information from when you see it to the stock market in New York. So that news wire has to propagate as fast as possible, speed of light or fiber even go through like lower earth orbit to get to the New York Stock Exchange for trader to then add it to their risk engine, to their model to produce a trade to get into the order book.

[00:04:29]If you have multiple concurrent proposers, um the idea there is that we don't have to be located in New York. We could actually be at the same time located in New York and Singapore and have at the same time exceptions actions that are accepted in the same we call it economic tick. So in the same short kind of batch of time that is universally applied around the around the world.

[00:04:56]So by the time that news wire eventually ends up in New York and a trader's looking at Bloomberg terminal, the price on Solana is already reflected it.

[00:05:05]Because somebody placed that order immediately in Singapore. It didn't have to go all the way to New York first to place the order. So decentralized systems actually can completely beat traditional finance.

[00:05:20]This is I think the cool part about this. This is this isn't us just trying to work around problem with Byzantine fault tolerance and kind of all the all the stuff that's been holding us back building these open systems where nobody controls anything.

[00:05:35]Which make it much more difficult. You have to solve a lot more problems than a centralized provider. But I think because we have to innovate and think of these problems from first principles, we have a chance to really solve them in a way that's even better than traditional finance could ever accomplish.

[00:05:52]Yeah, definitely. And I'm curious what mark mixed with multiple concurrent proposers and then you have the updates with Fire Dancer going live and Alpenglow also coming live. All three of those, do you think that's going to bring Solana to the vision that you have or do you think there's still more work to do to get to this kind of NASDAQ on-chain vision that you have for the future? I think for my vision has been that Solana never is frozen. Is that it's like Linux. Yeah.

[00:06:21]>> Is is hardware changes, things change, you know, the internet's switching from fiber to lower earth orbit is going to have impact on how Solana should be constructed and that means that I want people to go change the code and make it better. And always think about how do we reshape the network to fit the best possible hardware. The joke that I always had was that we care so much about latency that eventually we'll build neutrino-based internet that goes through the center of the earth. If we have to do that, we'll do it, you know, and that's maybe like maybe that'll happen after we have quantum computers designing materials for this.

[00:07:03]But uh that's the dream is like build a system that is so fast that we actually change the internet.

[00:07:10]Yeah, that would be really cool. Um and I'm curious too cuz you're talking about where the future of finance now.

[00:07:17]Um one thing just to give some background for people that are watching that are are new to crypto. Just in traditional finance you have stock markets that close at 4:00 p.m.

[00:07:28]Settlements take two days and your capital sits idle on the nights, weekends and holidays, but Solana runs 24/7, near instant finality. For a traditional trader that's a fundamental change in how capital efficiency works. So where do you see this heading and what do you think the actual mechanics of a trading desk is going to look like in 10 years? I think um a lot of trading desks probably have already adopted because they trade across a bunch of different venues. Mhm.

[00:07:59]But this where you know, people trade in Japan and London and New York and all of those overlap effectively a full day.

[00:08:08]But even those traditional financial firms are now going to 24/7.

[00:08:13]And crypto's always been 24/7. I think you basically have the rest of the world coming online into like what what crypto is disrupting I think isn't so much traditional finance. It's that it's bringing online the rest of the world into the same level as TradFi has had over the last 20 20 years.

[00:08:34]And the rest of the world is bigger and growing faster and will eventually I think become finance. Like we're going to stop calling it there's not going to be a difference between DeFi and finance.

[00:08:45]We'll just call it all finance. Yeah.

[00:08:48]I see that. So do you think do you see that mathematically changing like the return profile of a trading strategy with all of that combining into just 24/7 markets? None of my strategies ever made any money.

[00:09:03]>> [laughter] >> Neither.

[00:09:05]So I'm an engineer. I can tell I can analyze and and give you like performance numbers and make something faster, but I think uh it takes a very different skill set.

[00:09:15]You probably need a team, a combination of maybe engineers like me and and quants and stuff to to make it to be successful in that space.

[00:09:24]Yeah, that makes sense.

[00:09:26]Now I kind of want to dive more into like the technical side of things. Um So we briefly touched on Fire Dancer and Alpenglow. But those are two pretty important advancements for Solana today.

[00:09:41]And Alpenglow is built by very professional researchers from Esoteric and then Fire Dancer by Jump Trading. So you have this renowned HFT firm deciding to build infrastructure for Solana rather than competing against it. And you have some of the brightest minds in cryptography writing a new consensus that brings your block finality to about 150 milliseconds. So, what does that signal to you about where traditional finance is moving?

[00:10:11]Well, I think again, Solana my my dream is that it's like Linux, that it's open source, open uh protocols for anyone to participate.

[00:10:22]And a lot of adoption in Linux gained from big tech companies, Intel, Google, Qualcomm, um because they saw not the need to build a competitive operating system and to compete with Linux, but the benefit of using a common standard and get it all collaborating and working together and eliminating a lot of the pitfalls and attack factors and security threats um from doing that work separately, like all all on their own.

[00:10:51]And I think if you're going to have a a global financial layer, you kind of need that requirement. You need to be able to allow everyone in finance to participate in the system and to understand how um things that matter to them financially, um how those work on a technical level. So, they can have the trust to know that they're not getting a bad price or a bad fill or uh somebody has an unfair advantage over them. A lot of finance is really all about fairness.

[00:11:21]And you know, a lot of law in finance is about encoding that fairness and eliminating, you know, fraud and things like that. And open source protocols just increase transparency and improve fairness. Um so, I think this is our advantage over like a centralized system where they built their own internal stack and they, you know, invite Jump to trade there and everything, but the difference here is that Jump and their competitors all can share the same source code and all trust the markets that they're operating in and all can verify that Jump does not have a fair advantage over Citadel or whoever else.

[00:12:00]Yeah.

[00:12:00]>> I think that's that's ultimately kind of our our biggest advantage is that we're don't have any any way to really control any part of the stack and cause one entity to have an advantage over another one.

[00:12:17]Yeah. So, just leveling the playing field. And you mentioned two things that I want to talk more on. The first thing was um this global financial infrastructure. So, one thing that a lot of people new to crypto and Solana in general, um don't realize is that there are tokenized funds, equities, and commodities on Solana. And just in the last quarter, I believe Solana processed $1.1 trillion in volume. So, there is a lot of liquidity depth as well as tokenizing real-world assets. Um so, I guess what do you think still needs to be built to fully get this working? Um to have everyone be able to use this and and understand that it's available.

[00:13:08]I mean, the like we're already there.

[00:13:11]The the thing is like the what needs to happen is um I would say more like of a mental change in people's behaviors. Like a lot of technology shifts are happen faster on the engineering or technology side than it takes the human mind to adopt. Like people had to learn how to use a keyboard. That was not a a thing. And I don't know if you remember going to school if you had like typing class, like because it's just not a skill that everyone grew up with.

[00:13:44]Um people didn't understand web links.

[00:13:46]The idea of the web was a whole new idea that took time for people to like actually adopt and form. And people that grew up with in the in a environment now after AI exists are going to just assume that it was always there and like naturally be able to interact with it versus somebody that is experiencing as a new technology. So, adoption curves are all kind of limited by I would say the human human's understanding what they're dealing with.

[00:14:14]Um I think with finance, there's such a incentive to make money that people are willing to overcome the adoption barriers and go learn it and and figure out how to use it. Um so, that's the advantage. Um and the pace of how it's happening, I think, is both like surprised me how fast some things happen, like getting the genius act and I don't know, we're getting to what, close to 400 billion of stable coins issued, and how slow in in terms of like getting the regulators to kind of understand that a lot of the intermediaries that they created to deal with problems, you know, from the 19th century railroad stock boom, just no longer apply in crypto because we have cryptography to fully validate, you know, ownership and just go apply trust and all these other things. Um so, it takes time and regulators are typically uh the silver-haired professionals. They, you know, they go through the industry, they become best in class in their industry, and they're almost on the verge of retiring before they become a regulator.

[00:15:29]Yeah.

[00:15:30]>> the industry at that at that state and they have so much experience that adopting new technologies is they're usually the last to do it. Um so, it's going to take time for us to get through that like hump um across all the major regulatory environments in the world.

[00:15:48]And and it's not just United States, it's like everywhere in the world.

[00:15:52]Yeah, definitely adopting new technology like takes time. Um but for people that are learning and trying to make that like mental model shift, like what advice would you have for them to just kind of speed it up and and understand things a bit quicker?

[00:16:07]Um get a set up self-custody wallet.

[00:16:10]Like I think truly try to understand the risks.

[00:16:14]Lose lose a uh lose a custody wallet. And lose it.

[00:16:19]Oh, [laughter] no.

[00:16:20]Yeah.

[00:16:21]Set one up with uh enough to where the loss hurts, but not that it like hurts too much to where you'll remember the mistakes that you made. So, take a little bit of of risk to learn this technology. And geek out and understand like on how to actually make it secure. Like you would on like coffee or sourdough or whatever. I think that that's kind of become the expert of this. I think that that's really kind of what I would recommend. Um and you can do it as a hobbyist, you can take a lot more risk actually than a bank or a professional, but um once you understand that, I think you'll both see the power of it and kind of the the scary parts of like trusting cryptography only and not having like intermediaries that you rely on. Um both of those, I think, are, you know, empowering and and sobering.

[00:17:15]You see hacks and things like that happen because even professionals make mistakes. And if you really really like try to understand all the attack factors, you'll understand both the power and the and how hard it is to get this this technology fully adopted globally.

[00:17:32]Yeah, I love that advice. I actually accidentally pushed my private keys to GitHub once and there was a bot that immediately drained my wallet the second I pushed it and I've now learned my lesson and and have done all the research on security. [laughter] And when somebody tells you you should have a separate dedicated computer only for signing, you can understand why, right? You immediately understand, "Oh, this solves all these possible risks that I that could I I could accidentally screw up, right?" Yeah, exactly. [laughter] Realized the hard way. Yep.

[00:18:08]Yeah. Now, you mentioned earlier fairness, um and I just want to go back to that. So, I had one question that's a bit controversial, but that's around MEV. So, some people see it as predatory, others see it as legitimate arbitrage that improves market efficiency. So, for people coming from traditional finance, the equivalent exists, but it's either regulated away or it's reserved for the largest institutions. So, do you think MEV is good or bad for Solana?

[00:18:37]So, these are just kind of inherent parts of the system and it's neither good or bad.

[00:18:42]Um because the the function that these systems provide is like a fair market.

[00:18:48]And it's easy to say that, but if you think of it like you have an auction house, like a physical auction house, it can physically fit only so many people.

[00:18:58]So, if you want to place a bid, if you want to call it a fair auction house, it would have to be infinitely sized to allow everybody to be able to go in and place a bid. And the time that it takes to place a bid would have to be infinitely long because that would be unfair to block somebody, right? Like a second before they actually went in. So, as soon as you start thinking about the real world, it is impossible to build a system that is fair from without any kind of limits.

[00:19:29]So, as soon as you start adding limits, somebody's excluded, somebody's included. And you have to design these systems in a way that it's transparent why somebody's included or excluded. And everyone has a shot of being included.

[00:19:42]And in a regulated environment, they try to do this with um regulation and laws and stuff like that, but ultimately you end up with uh a lot of captured systems where you have exchanges that make a certain amount of money, but not too much. You have big market makers that make a certain amount of money, but if they make too much, the regulators start like, "Oh, what are you doing?

[00:20:04]This is probably something not right."

[00:20:05]>> [laughter] >> And uh in a open permissionless system, you have protocols and people find exploits or corner cases in the protocol and then they start exploiting them.

[00:20:19]And this is where an open system can self-correct because everything's observable. You can observe MEV, and we can as an industry decide what is good MEV and what is bad MEV. I don't know that, but businesses do. They see where their users are getting hurt to the point that they turn away, but they can also sometimes see that there's more liquidity on chain that allows their users to trade at at a better price.

[00:20:45]And that could be because somebody that is doing MEV is bringing more liquidity simply because they want their market to be accessed more. Um so, again, all these things are dynamic, and it's up to that business and front end to be able to decide what is a good market, what is a bad market, and the job of the protocol is to simply allow that business to be selective. We want ultimately like where the protocol fails is if you run a company on Solana and you have no choice but to be forced to use a particular market where you know you're going to get a bad price.

[00:21:20]So, to me, that means that the protocol has failed. If the protocol gives you optionality, use this market or another one or this proposer or another proposer, and you can go and look at the data and decide this is the best one that I'm getting, and I can exclude the bad one, that's great. That means we have a contestable market. People can go and decide which auction house to go into, and we will effectively converge on better pricing than the regulated path where you don't have contestable markets, and things kind of get entrenched, and you have to kind of the feedback loop is basically much, much slower in the regulated side. Um what we want is to identify places where somebody somehow has a uncontestable monopoly, and then we I see that as a protocol failure.

[00:22:11]If somebody has an edge, and I don't have to use them, that's great. Like, let them have that edge, let them figure out how to make it or break it, you know, in in this open environment. But if I don't have to use them, then it's not my problem, right? Like, I think ev- everyone that's building an application can kind of make that choice on their own.

[00:22:32]So, would you say that like MEV would give a unique opportunity to traders that like you don't really have in traditional finance?

[00:22:41]Where MEV hurts users is if they don't understand like the cost of it. Like, they they their applic- like, usually um users are rarely interacting with it directly. You have applications and wallets that set the slippage uh and all these other things, and they surface like this is the price that is being offered, and you're very likely to get this price, but the worst-case price you're going to get is is this.

[00:23:10]And when that's not surfaced to the user when the application fails to do a good job doing that, you end up with bad outcomes. Because then the user like is accidentally like sets their slippage to 20%, and they submit to a market that takes max slippage, and then they get uh they're surprised, "Why am I getting this 20% or something like that?" Um So, finance is complicated, and when people like try to like, "Why doesn't it just all work perfectly?" Think of it as an auction house, and you have something that is so hot that there's a line to get into the auction house that is now packed, and now you're trying to get into it.

[00:23:51]And what happens if somebody just starts beating up everyone in line to get >> [laughter] >> to get to the front of the door.

[00:23:58]Right?

[00:23:59]>> [laughter] >> Yeah.

[00:24:01]So, as a the protocol's job is to make it obvious that there's a line, that the house is packed, and to prevent anyone from beating up to get ahead in the line, and to make that a fair the the whole process fair. This is like the the really, really hard part.

[00:24:16]Um Yeah, that's a great analogy. I love that.

[00:24:21]Um [laughter] so, we're almost at time, so I have one more question left. Um you're an engineer, and I think a lot of people that are engineers that are a little curious on crypto and blockchain, there's this misconception that there isn't a lot of cool tech happening. Um so, what advice do you have for developers, and what do you think is the most interesting thing to get them interested in wanting to dive into the land of crypto and Solana?

[00:24:53]So, to me, this is one of the most fascinating and interesting problems to work on because all the fun technology problems like just butt into physics.

[00:25:02]So, the problems we're dealing with in terms of like how fast can you synchronize the these like auction parameters and the state all around the world is a physics problem. And how do you do it in a way that we can guarantee that nobody can attack the system like for Byzantine fault tolerance is like one of the hardest problems in computer science. So, if you really, really get into it and get into markets and microstructure and MEV, uh you are fighting physics, and what what better thing can you possibly work on? I think this is why like AI is fascinating because you're fighting physics there, too. So, um the uh between finance and AI, I don't I mean, these are the the top two things to work on.

[00:25:49]Yeah, I agree. Um I've been in the space for a while now, and the more I'm here, the more I realize there's so much to learn, and we're just at the forefront of just innovation and technology. So, it's really cool.

[00:26:02]Yeah, it never ends. I mean, it's it's >> [laughter] >> The more you learn, the more you realize you don't know anything.

[00:26:10]>> Yeah.

[00:26:11]So, [laughter] awesome. Well, thanks so much for coming to chat, and I all of this is amazing insight, and I hope it helps a lot of people want to start learning. So, I appreciate it. Thank you.

[00:26:24]>> Thanks for having me. Yeah, thank you.