I previously cofounded marginfi, and I’m currently the founder of Project 0 – the first trustless DeFi-native prime broker. Project 0 is powering marginfi development now, and marginfi is one of the venues in Project 0’s cross-margining engine.

This article slightly pulls back the curtain on some of the product related hurdles MRGN faced over the last year. I feel it’s important to share this with users because a) they’ve asked for it, b) it was counterproductive and often impossible for me to walk through ops/product/structuring/etc related problems publicly before any meaningful step forward was live, and c) there’s a ton of confused people and misinformation out there, so this can at minimum act as a reference for those people.

A year ago MRGN was in a hole. The team was understaffed, suffering major reputational damage, had severe burn, had no meaningful revenue, and the team’s data / risk / monitoring / oracle systems were broken. My previous cofounder had just left in the middle of a public meltdown, insulting hundreds of thousands of users, causing panic leading to withdrawals, and gut punching the employees who had put in tireless hours to make MRGN the fastest growing DeFi product of 2023. Worst of all, users were upset with MRGN's execution. Things needed to change.

The MRGN team faced a plethora of operational, legal, and product challenges from that point. These obstacles are important, and explain a lot of the timing with Project 0, but aren’t the focus of this article. I feel it's important to focus on the product and give users more details on the questions they’ve been asking over the last year. This article will be my attempt to do that as briefly as possible, without any drama.

Looking back at MRGN, the highest impact fires were around data pipelines, platform monitoring, risk systems including oracles and liquidators, and the very small team. To quantify this a bit, MRGN’s broken data pipelines were burning $300K+/mo. The team had broken monitoring and redundancy on its internal liquidators, and oracle price data wasn't landing, causing users to have funds temporarily stuck on marginfi. Perhaps most preventable: MRGN was a team of 6 people building systems to permissionlessly handle hundreds of millions of dollars in an on-chain, adversarial environment. Hiring was desperately needed.

Fixing these problems with the scale of liquidity and users MRGN had, from the ground up, would not be easy or fast. However, it was do or die work.

At Project 0, we got to work. In order of priorities, over the last year we've cut infrastructure costs (oracles and data) from over $300K/mo to about $2K/mo. For those wondering, yes continuing at $300K/mo would've bankrupted MRGN in a very short amount of time.

We fixed MRGN’s internal liquidators. A year ago, MRGN had piss-poor visibility, monitoring systems, and redundancy on its liquidators. The team was extremely reliant on its incredible community of profit-motivated external liquidators. On a network like Solana, which has been going through upgrades at an extremely fast pace, this is a dangerous position to be in. I won't detail the sleep I lost over this, but solvency is everything – and MRGN’s position on protecting solvency with its own internal liquidators was weak.

Fast forward to now. Project 0 is about to release v2 of its own internal liquidators, we're about to innovate on how liquidations happen on marginfi & Project 0 (and lending primitives as a whole), and we're introducing new novel approaches to liquidations – custom to each asset – that will unlock further capital efficiency, improve risk, and better serve the user experience. Project 0’s data pipelines around these systems are stronger than ever and improving more every day.

Another blazing fire at MRGN was oracles. Anyone who actively uses marginfi knows this. This problem was full-stack – from the Solana protocol itself, to our transaction landing systems, to our monitoring and data pipelines. As of today, we’ve rolled out our answer to this full stack problem on P0. Our oracles now use multiple differentiated feeds, smart price weighting across those feeds, have close to 100% uptime, and are cost-efficient (from $20K/mo to essentially $0). Pricing systems are everything – they're a first line of defence for our risk systems. Now they're redundant, performant, and dynamic – and we're not even close to done.

Then, there was the small team. MRGN was understaffed, spread thin, and didn't have dedicated attention to critical product areas needed to grow. Making this harder was the PR damage MRGN was suffering. I had to go out and convince talented people on our mission at P0, on our new product, and on what we saw differently. Despite the noise, we did just that. Over the last year we’ve hired 11 world class people. Project 0 now has a dedicated, differentiated focus on risk, applications, program, backend, and ops. These teams have rebuilt every part of our business on a scalable foundation. We needed to spend time going backwards in order to go forwards 10 times faster. We fixed our team, and we're finally in a position to accelerate.

I want to emphasize how delicate this work is at scale. These moves severely hindered MRGN’s velocity over the last year as we deployed a new team and resources at these problems. This isn't sexy work, there aren't any impactful community updates we can make about it, but it's laid a foundation that will enable us to move at a compounding speed moving forward. I'm extremely excited now that we're turning the corner. The product we're releasing on the back of this infrastructure is incredible.

Looking back at MRGN points, they were introduced on top of brittle data pipelines, when Solana was dead, when points systems weren't a thing, when there were no expectations around what points would become, and with no concrete gameplan on what to do with them. The MRGN team thought quantifying user activity was important, and in the interest of transparency, decided to make that public. They started with a very primitive form of benchmarking user activity, but that drew a ton of attention and blew up before the team could appropriately react.

To be clear, a part of the reason MRGN points began was certainly to understand user behavior heading into a token event. These things aren't directly related, but points were supposed to give the team a solid foundation on identifying users who were lending capital and obtaining credit. There's a plethora of things not included in the MRGN points calculation that the Project 0 team finds valuable, such as people who mint and use LST, or people who tried beta products. The MRGN team assumed they could quickly pivot to building data pipelines that captured other strategic user activity they cared about, but – as I explained in Introducing Project 0 – the old systems weren't in a place where points could update quickly.

Putting aside all operational and legal hurdles we faced, even if we wanted to finish points and launch the token, we didn't have the bandwidth or resources we needed. There were pressing product fires that needed to be dealt with and a team to build.

So, over the last year, we've built a new product (Project 0) and we've built a new team. This is unsexy, heads down work, but it's enabled us to get to this point. Front-running this difficult work with updates about the token or product, given we knew it wouldn't be ready for many months, was counterproductive. Crypto users are tired of being told "coming soon". They want products that matter yesterday – and to their credit, we and the industry at large need to adapt.

To marginfi users everywhere: try Product 0, it’s made for you. You can also keep using marginfi – the P0 team will be refining and improving the marginfi program and dApp for all users.

And to the few who know the depths of what we overcame and were supportive throughout it all, my unending gratitude goes out to you.

Welcome to Project 0.

This year I primarily grew as a leader within mrgn. Everyone at mrgn is a leader in their own domain. I’m incredibly inspired by that. I get the benefit of working with the smartest people in the room, everyday. It’s humbling, inspiring, and absolutely necessary for us to grow at the pace we benchmark ourselves to. The mrgn team enables the mrgn team to grow — we need each other. Everything I write below is a testament to the foundation we’ve built.

Places I’ve Been

It’s a blessing to be able to travel this planet we were given. I’ve gotten do that for both work and pleasure this year, and I’ve had the added benefit of doing it with friends. Here’s some spots I had a memorable time:

• Tokyo

• Okinawa

• Da Nang

• Ho Chi Minh City

• Taiwan

• Austin

• NYC

• Amsterdam

• Salt Lake City

• Playa del Carmen

• Washington, D.C.

• Paris

I’m excited to do more trips with friends in 2024. It’s already looking like I’ll get to revisit Singapore, Dubai, Vegas, and a few other places. I want to prioritize getting out to London and SF to visit good friends as well. I’m excited for the places 2024 has waiting for me.

Things I’ve Done

We launched mrgnlend this year. mrgnlend is the lending & leverage foundation for the marginfi protocol — it was critical to get this foundation right. In 2022, marginfi became crypto’s first-ever on-chain prime brokerage across derivative venues. marginfi had no application interface, it only served sophisticated traders. This was a groundbreaking protocol, but then FTX collapsed and the industry flipped on its head. Traders couldn’t run the same strategies they were running across DEXs on Solana. Liquidity was absent. The ecosystem needed to rebuild. A huge need for an over-collateralized, retail-friendly lending protocol on Solana emerged.

We stepped up and transformed marginfi to serve that need. We built out a frontend, started supported new assets outside of USDC, and put marginfi in the hands of a user base that needed passive lending and capital-efficient borrowing. Our vision didn’t change: we still are working towards a true, crypto-native prime brokerage. Our foundation changed: now we have 30+ assets and half a billion in liquidity to enable more efficient, scalable leverage as we start re-integrating new venues for traders to cross-margin.

Next, we launched LST. We found a lot of people use Solana to hold exposure to SOL the asset. However, just holding SOL has a variety of inefficiencies. You miss out on staking yields, you miss out on MEV capture, and you miss out on the ability to compound yield. LSTs came into play fixing this — you can stake to a validator, earn the rewards from staking, and hold a tokenized asset secured by the value you staked. The problem is that liquid staking providers can end up delegating your SOL to validators with high commissions and variable performance… so you’re still missing out on yield.

LST fixes this problem by staking to no-commission, high-performing mrgn validators running the Jito-Solana MEV client. LST itself takes no fees and has immediate liquidity through Sanctum. Now people can hold SOL exposure, earn the highest staking rewards, pay no fees, earn MEV capture, have immediate liquidity (instead of waiting for the epoch to end to unstake), and pursue on-chain trading opportunities using LST as collateral in marginfi. There’s already $30M secured in LST, but we’re just getting started. I’m excited to make a push on new, asset-backed tokens at mrgn in 2024.

One thing you may notice from the LST video is a reference to points. At mrgn, we pioneered a points incentive program for defi this year and it took our industry by storm. mrgn points launched in July. By August, teams around the industry were already implementing their own points programs. It’s a huge testament to the work we put in to our distribution efforts at mrgn to watch this happen. W really are just getting started on our efforts to grow marginfi into a global behemoth.

Points helped shape an incredibly strong mrgn community, something we’re proud of. I can’t wait to serve this awesome user base in 2024.

There’s one other major release we did this year — it actually just happened. Since this industry started, crypto has been confusing. People often deduce crypto to scams and gambling because they can’t make sense of the impactful things built here. A lending protocol is one of those things that actually benefits the world. Right now, there’s people in countries with poor banking infrastructure holding value in USDC (as opposed to their rapidly inflating currency), lending it into marginfi, and earning 5% yields. That’s magic.

They know exactly what their money is doing — everything is transparent and recorded on the blockchain. There’s no middleman, borrowers can’t run off with your money, the protocol can’t arbitrarily decide to shut down and freeze funds, there’s no obscene transfer fees. Most importantly, there’s nothing preventing anyone from anywhere in the world from getting the same access to financial tooling that you have.

marginfi is optimized finance, it’s the future, and there’s nothing you can do to convince me otherwise. With the new dapp launch we just made, anyone can use it. It doesn’t matter if you don’t hold crypto, it doesn’t matter if you don’t have a crypto wallet, it doesn’t matter if you don’t want to hold tokens outside of USDC or USDT. Now, marginfi is for you.

There were some other massive wins we had at mrgn this year. We completed an important step most startups never reach in 2023. You can probably guess what that is, but it’s not announced yet. Guess you’ll have to wait to 2024 to see who was involved :)

We also made some hires. We got to welcome Adam to the team at mrgn labs, and Kevin to the team at mrgn research. It’s incredible to work with both of these individuals. I can’t wait to keep building cool stuff with them in 2024.

That leads me to our work at mrgn research. mrgn research is a proprietary trading firm we started in 2022 as we saw market-makers flee on-chain trading in the wake of FTX. We made a bet on crypto a long time ago, and the actions of FTX didn’t change that. This year we dramatically expanded our trading footprint, and now we’re setting the stage for our next big push. 2023 was the year mrgn research started working with teams on their liquidity provisioning needs, and we’ll be doubling down on that in 2024.

The market-makers we’ve grown used to in this industry aren’t set up to help on Solana — we are. In 2024 I can’t wait to work with more teams with liquidity needs on-chain. This is an optimized place to trade and the growth ahead is massive. There’s great supporting teams and infrastructure in place, and more development is coming.

This year we’ve also gotten to work closely with the Solana Foundation, Sui Foundation, and dYdX Foundation. We can’t wait to work with more large foundations and teams solving difficult problems in 2024… There’s already a few on the list in which we’re extra excited ;)

None of the above is possible without the team we have at mrgn labs and mrgn research. I’m grateful every day for Edgar, Jakob, Ben, Anders, Cyrill, Kevin, and Adam. The team we have at mrgn is everything — we have an incredible, incredible group of guys that I’m immensely proud of. I can’t wait to expand the mafia in 2024.

Friends I’ve Spent Time With

I deeply love the friends I have in my life. I’m extra lucky in that I have a group of incredibly inspiring friends who are talented and successful in their respective, different domains. I want to thank everyone below for the joy they are to me. I’m at my happiest when I see the guys below succeed and be happy. My number one wish for 2024 is that these guys continue to kill it and enjoy the ride.

• Kaito

  • Japan & Vietnam was a blast. Excited for Vegas.

• Ami

  • Inspired by your work at Verci. Glad you’re around in NYC.

• Tom

  • Lucky to be part of your life. Excited for what 2024 has in store for you.

• Matteo

  • Massive fan of how you think about things. Excited for what happens in 2024.

• Charlie

  • Hudson Yards is the premier NYC spot. We know this.

• Edgar

  • Thank you for dealing with me.

• Anders

  • Thank you for also dealing with me.

(Edgar and Anders get a second s/o cause we live by/with each other in NYC. I love everyone on mrgn.)

Things I’m Looking Forward To

There’s some exciting things we’ll be launching in 2024 at mrgn. One of the most important products is YBX. The US Dollar is highly sought after all over the world, and in the crypto-native age we’re moving towards, holding value pegged to the USD has become more accessible. This should be celebrated. People in countries with hyper-inflating currencies, poor financial infrastructure, and harsh restrictions on their personal finances need something that can help them persevere. We’re making that more accessible through YBX.

YBX will not only give users stable value pegged to the USD, it will also give users the compounded staking yield of SOL, the MEV rewards attributed to the Solana network, and the lending yields generated by marginfi. YBX will also be decentralized — it won’t be backed by centralized assets, only LSTs (like our very own, LST). Everything will be on-chain, transparent, and accessible.

After YBX is live, mrgn will be launching a few new, very big things. Each product will be bigger than the last. You’re going to want to be a part of our journey in 2024.

On the personal side, I did some very fulfilling things this year. A highlight was reading the Dark Forest trilogy. I’ve found a deep love for science fiction, inspired by the Dune series, and want to continue to invest efforts in this direction in 2024. I was also able to dive back into the focused study of math and science this year. I want to go deeper in 2024, and add focuses in chemistry, physics, and maybe a bit of biology. In general, I want to have a deeper level of knowledge across a variety of domains so that I can use AI with deeper context across fields.

I’d also love to find time this year to invest in learning a new language. I’m missing a great deal of human context by just being limited to English. Perhaps 2024 is the year where I start to change that.

In 2024, I want to double down on mental and physical health. I deeply love what I do, but it’s stressful and taxing. It’s non-negotiable that I counter the weight I hold by building my body and mind. I’m ready to invest more in this in 2024 — here’s to a year of new PRs and deep mindfulness.

Traveling with friends is the best. In 2024, I want to prioritize traveling with (and to) friends at least once a quarter. My work life is all around the world, I have no excuse to miss out on seeing friends (or bringing friends) with me wherever I go.

Finally, in 2024 I want to write more. I really enjoy writing a lot, I’m constantly working with incredible people and ideas, and mrgn has cultivated a strong community of users who care what I have to say. I’d love to produce more written work for them in 2024, and maybe also add in some more visual content too. Time to find some time to write in the new year.

This has been a hard-fought year. I’m proud of what was accomplished. However, this is only just the foundation. Here’s to 2024, a year of convexity, speed, and compounding investment.

Peace out 2023, I enjoyed the lessons you had for me.