The cryptocurrency markets have recently been through a turbulent period. Worsening macroeconomic conditions have driven sentiment to levels more bearish than those seen since the Global Financial Crisis. Compounding this, the now-infamous collapse of UST — a stablecoin tied to roughly $18 billion in value — shocked many investors and amplified concerns about off-chain risk. In this environment, market participants are intensely focused on risk management.
That backdrop underscores the importance of diversification and prudent portfolio allocation. It also informs the thesis behind Exotic Markets, which we interviewed last week after the firm launched a Dual Currency Note (DCN) on the Solana network. In short, this structured product enables investors to generate yield by effectively selling upside exposure.
Investors receive returns denominated in their preferred currency without needing wrapped tokens or alternative assets. To better understand the mechanics and broader strategy, we spoke with Joffrey Dalet, founder of Exotic Markets.
The full interview follows.
CoinText (CT): You stated in the press release that this launch will “rekindle general interest in crypto following the recent Terra-UST debacle.” How damaging do you think that incident was for the industry?
Joffrey Dalet (JD): The hit to sentiment was severe, and there may still be lingering effects — for example, renewed pressure on other stablecoins. At the same time, these events create opportunities, especially for structured products. When confidence in the market direction weakens, investors look for alternative sources of yield, which is precisely the market Exotic Markets aims to serve.
CT: Are you concerned about the timing of this launch, so soon after that collapse and amid a strong downward trend in global markets?
JD: Bear markets are an excellent time to build. Many of the best blockchain projects were developed during the crypto winter of 2018. Our private sale participants include well-capitalized and supportive institutional partners, which positions us to continue building through a difficult market phase.
CT: The release mentions that “for example, a Solana holder can invest in a Dual Currency Note and receive their yield in Bitcoin. No need for alternative assets or wrapped tokens.” Can you explain the advantage of that approach versus simply buying Bitcoin outright to obtain the desired exposure?
JD: There may have been some confusion. In our DCN products, investors receive yield in the token they deposit. For example, a SOL investor would receive yield paid in SOL while the product references the SOL/USDC performance for payoff determination. The benefit is that investors keep their original currency for returns while accessing structured payoffs tied to price performance.
CT: You appear very confident in Solana — you suggested there’s “a real chance a new all-time high could be reached relatively soon.” What leads you to believe that such a substantial move could happen, nearly six times the current price?
JD: We plan for the worst and hope for the best. Our team is well-funded and prepared to continue development throughout a crypto winter. We’ve experienced multiple cycles and know that the blockchain industry has historically emerged from crises stronger than before. That resilience gives us confidence that upside remains possible, even if timing is uncertain.
CT: Are Solana’s repeated outages a concern for you?
JD: Yes, outages are a concern. We’ve also faced related challenges, such as difficulties when working with bridges and wrapped assets. Every blockchain has trade-offs; despite its issues, Solana remains one of the more attractive platforms overall for performance and developer activity.
CT: Rewarding users with yield in the currency they already hold makes sense. Could you explain in more detail where the yield actually comes from?
JD: The yield originates from selling options. Option selling can be intimidating and requires a steep learning curve for the average user. Structured products package that strategy into a simple note, removing complexity for the investor. The yield is sustainable because it reflects a trade-off — typically a limitation on upside potential in exchange for a predictable return.
CT: If the slowdown persists and evolves into a prolonged bear market, how do you expect to perform and what do you anticipate for the broader crypto market?
JD: A prolonged slowdown could actually benefit Exotic Markets for two reasons:
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In sustained bear markets, directional speculation tends to decrease while demand for yield rises. History shows that after major downturns — such as Japan’s lost decade following its bubble burst — investors shift from chasing price appreciation to seeking steady returns. Structured products can provide enhanced, durable yield because they involve explicit trade-offs like selling options.
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DeFi activity has already declined over the past seven months, with total value locked stabilizing near March 2021 levels. During the same period, structured-product platforms have shown resilience. For example, Ribbon Finance accumulated $75 million in TVL despite market headwinds. That demonstrates how structured approaches can perform well even in challenging conditions.
CT: What is the biggest risk for investors considering these DCNs?
JD: There are several risks to consider. As with much of DeFi, smart contract risk exists. Currency movements can affect the value of the underlying asset, and volatility itself can be volatile — which influences the returns structured products can deliver. There’s also counterparty and pricing risk: sellers of structured products may fail to offer fair pricing to buyers. Investors should fully understand these risks before participating.