The cryptocurrency user known as Saint Eclectic had a feeling that something about Sunny felt off-kilter. The newest DeFi app to hit Solana during its scorching bull run last summer, when its native token jumped fivefold within two weeks of existence - this yield farm was flooded with billions of dollars worth of crypto from September onward.
Saint and others were still perplexed as to who was behind Sunny. Why was its creator, "Surya Khosla," kept anonymous? Was the codebase reviewed? Is the money of users secure?
Their suspicions proved correct. Surya was identified as Ian Macalinao, the chief architect of Saber, a stablecoin exchange built on top of Solana. As a result, he constructed the Sunny Aggregator on top of Saber. That's just the tip of the iceberg.
Ian, a 20-something computer wiz from Texas, created an intricate web of interconnected DeFi protocols that projected billions upon dollars worth onto the Saber ecosystem. This temporarily inflated Solana's total value locked (TVL) as it was racing towards its zenith last November; however, Ian is now widely regarded among those who believe in on-chain activity.
"I devised a scheme to maximize Solana's TVL: I would build protocols that stack on top of each other, allowing a dollar to be counted several times," Ian wrote in an unpublished blog post that CoinDesk reviewed. The post was written on March 26, three days after Cashio, one of Ian's secretly built protocols, was hacked and lost $52 million.
Ian's strategy worked for a while. Saber and Sunny were responsible for $7.5 billion of Solana's $10.5 billion TVL at their peak.
According to data provider DeFiLlama, the Solana network's TVL continued to grow even after the Saber ecosystem began losing steam in mid-September 2021, peaking at $15 billion around Nov. 9, while Saber's TVL had dropped 64% by then.
"I wanted to build a system very similar to this," he explained. "If the same team built each protocol, TVL as a metric would be more ridiculous." As a result, I made more anonymous profiles," he wrote.
The brothers called their anonymous personas “friends” or "friends of friends." In a blog post written years before he launched Saber with its so-called liquidity provider tokens (LP) as collateral on Ethereum Classic's blockchain, Ian described how these virtual currencies would one day be used to build an ecosystem designed around what people want: finance without friction.
The Macalinaos desired that other crypto protocols become so reliant on Saber that "its failure would result in the entire system going down," as Dylan put it.
A ‘Sybil attack.’
There are valid reasons to seek refuge behind a pseudonym. On the other hand, Ian's weaponized "anons" carried out a "Sybil attack" on crypto users' trust.
The Macalinao brothers offered no comment by press time. "The Macalinaos wanted other crypto protocols to become so dependent on Saber that “its failure would lead the entire system going down," as Dylan phrased it on Oct 1, 2021. He also explained this was his 200 IQ strategy, but few understand.
Army of Anons
When building Sunny Aggregator, Ian went by the name Surya Khosla. Surya first appeared on Twitter in August of 2021. Saint Eclectic, the Sunny skeptic, was hesitant to invest his LP tokens in the work of this mysterious character, an anon with an AI-generated face.
Surya benefited from one factor: the Ian puppet claimed to know Dylan Macalinao "pretty well in real life." On Sept. 9, last year, Dylan Macalinao tweeted that he "felt comfortable" putting his own cryptocurrency into Sunny Aggregator. Dylan, who is in his early twenties, explained, "We audited their code."
The Saber ecosystem's crown jewels were these DeFi Lego bricks. According to Ian's blog, lesser-known protocols are Crate (run by kiwipepper), aSOL (0xAurelion), Arrow (oliver code), Traction.Market (0xIsaacNewton), Sencha (jjmatcha), and Venko App (ayyakovenko) completed the top five.
Ian and the other anons relentlessly promoted Ship Capital's work on social media. They shilled out launches and praised each other for thinkfluencer tweets they credit with inspiring them to build upon Solana. Ian even made self-referential memes.
The collapse of two major DeFi projects is a stunning reminder that the space is still in its infancy. According to data provider CoinGecko, Saber’s deposits peaked at $4 billion on September 11th, 2021; its flagship SBR token topped out 90 days earlier with an all-time high flirting close to 18 cents one day before.
A barrier to criticism
Pseudonymity is common in crypto, but it is not proof of wrongdoing. Thirteen years after the invention of bitcoin, the true identity of its creator, Satoshi Nakamoto, is still unknown. Despite a recent brutal sell-off, the bellwether cryptocurrency has a market capitalization of $442 billion.
Who were these unidentified builders who were flocking to Saber? Ian pondered the question during a panel discussion at last year's Solana conference in Lisbon, Portugal, titled "From Zero to $2 Billion: How Saber Became the Biggest DeFi App on Solana."
Cashio's true origins are revealed in Ian's unpublished blog. Ian rushed to finish an exemplar of Saber LP-backed stablecoins as 0xGhostchain in time for Breakpoint, the Solana ecosystem's largest-ever gathering of fellow developers. Ian wished for others to imitate Cashio, he wrote. Each protocol replicating its reliance on Saber LP tokens would act as a liquidity spigot, allowing more TVL to flow into the $1.7 billion mothership.
With their new name, the Macalinaos are betting on Aptos to become an up-and-coming blockchain porting point. Many developers from Solana have joined them in this venture. They will be working with Saber's protocol deeply integrated into it to increase volumes/TVLs efficiency while also increasing capital efficiencies for both sides of deals signed by these actors.
Users of the Seven Saber ecosystem told CoinDesk they felt abandoned by the Macalinao brothers. Some people lost money in CASH tokens. Others claim that their cryptocurrency is trapped in derivative tokens issued by Sunny. Brad Garlic Bread, a pseudonymous user, said he lost around $300,000 across Sunny and Saber - "there's a lot of people worse off than me."
On July 23, the brothers launched a "DAO accelerator program" to entice external developers to join Saber. The application form asked, "How will your protocol deeply integrate with the Saber Protocol, thereby increasing Saber's volume/TVL/capital efficiency?" ”
This effort comes as the brothers leave Solana for Aptos, a new blockchain, bringing Saber with them. According to a venture capital source, many Solana developers are in the area. Three sources said the Macalinao are betting on it: they run a venture capital firm based in Aptos. The protagonist is the name of their virtual character. It used to be known as "Ship Capital."
The community believes Ian is in charge, but "no one knows for sure," according to Brad Garlic Bread.
He's still trying to catch Ian's eye. On July 16, Brad asked Ian if he could "pretend to be Surya for like a day" to assist Sunny Aggregator's investors in reclaiming their locked tokens. In the Saber Discord, Ian was answering questions; he skipped Brad's.
Other SUNNY token holders enquired about Ian's thoughts on the yield aggregator's future. Will Sunny follow Saber to Aptos? They wanted to know what happened to Sunny's lead developer.
Ian reported that the Sunny dev felt revitalized after trying Move one week later.