Solana News Today: "Reflect Aims to Turn $280B Stablecoin Dead Capital into Living Yield"

Reflect Money has raised $3.75 million in a seed round to develop infrastructure for yield-bearing stablecoins on the Solana blockchain. The round was led by a16z Crypto’s CSX accelerator and included participation from Solana Ventures, Equilibrium, BigBrain Holdings, and Colosseum [1]. The capital will be used to build a “software-as-a-stablecoin” platform designed to enable applications to issue yield-bearing stablecoins without requiring users to lock up their assets or navigate complex operational processes [1]. The startup previously won the Grand Champion title in Colosseum’s 2024 Solana Radar hackathon [1].

The core proposition of Reflect is to transform idle stablecoin balances into productive assets within decentralized finance (DeFi). According to CEO Nico James, every unused asset represents “dead capital” that could be generating yield while it remains in a user’s wallet, during trading, or at rest [1]. Reflect’s solution tokenizes on-chain DeFi strategies—such as delta-neutral basis trades and lending—enabling deposited USDC to generate yield while remaining fully liquid [1].

The infrastructure will introduce a yield-bearing version of USDC, branded as “USDC+,” which users can mint and redeem at will. The stablecoins will be non-custodial, offering developers a model similar to Morpho’s white-label vaults or M^0’s stablecoin-as-a-service approach [1]. Currently, the DeFi strategies are curated by the Reflect team, with plans to open them up to developers subject to governance approval [1].

Risk management is a key focus, with each strategy backed by an autonomous, on-chain insurance liquidity pool. This “Global Insurance” pool will utilize Jito restaked assets to provide liquidity, an approach Reflect likens to the insurance mechanisms seen in traditional banking systems like the UK’s Financial Services Compensation Scheme (FSCS) [1]. The insurance pool also facilitates slippage-free, MEV-free, and feeless rebalancing across strategies [1].

Reflect is aiming for a mainnet launch in early September, initially supporting USDC on Solana [1]. James emphasized the potential impact of the project, noting that the stablecoin market, valued at approximately $280 billion, currently earns no yield. “We’re about to change that,” he said [1]. If successful, the initiative could significantly reduce the presence of idle stablecoins on the Solana network, redefining how value is generated and managed in DeFi ecosystems.

Source:

[1] Reflect raises $3.75M to build yield-bearing stablecoin infra on Solana (https://blockworks.co/news/reflect-stablecoin-infra-raise)