Neel Somani was developing a protocol connecting the algorithmic Terra stablecoin with Ethereum at TerraForm Labs’ Hacker House in early May when a Jump Capital employee took him aside and explained that the algorithmic stablecoin had depegged and was unlikely to recover.
Although Terra’s explosion wiped out billions of dollars in value and caused projects to fold almost overnight, Somani and his Terra colleagues have mostly remained in crypto, grafting onto new projects in anticipation of the next bull market.
Neel Somani | Source: Eclipse
Fewer than five months after Terra’s collapse, the 24-year-old engineer has already raised $15 million for a new project on a different blockchain — the Eclipse rollup running on Solana.
Inspired by Cosmos, Eclipse is a layer-2 network that allows users to transfer value between blockchains. Eclipse hopes to be more flexible than the current slate of cross-chain protocols, letting developers deploy rollups across multiple layer-1s.
Somani began his career as a quantitative analyst at Citadel but found traditional finance dull, curious to explore a riskier career path. In early 2022, Somani left the hedge fund for Terra, where he worked on an Ethereum virtual machine-compatible smart contract layer.
“I want to be in a role where it either goes to zero or explodes in a good way,” Somani told Blockworks.
Somani would get his wish, and was publicly lighthearted after Terra torpedoed his project.
I quit my job at Citadel to get wrecked in web3 https://t.co/qQQ6oDVZK2
— neel (@neelsalami) May 13, 2022
When it came time to fundraise for his new project, potential investors were not so sanguine, viewing Somani’s involvement with the collapsed stablecoin as a point of concern.
When Terra comes up during meetings with investors, “I have to kind of own it and show that I’m acknowledging this, and I don’t think it’s that big a deal,” Somani said.
But Somani’s new venture is also a response to Terra’s mistakes — the Eclipse rollup is designed to be deployed on multiple chains in case a Terra-like event happens again. Eclipse will be deployed on the Solana virtual machine, but is designed to be ecosystem-neutral.
“I didn’t want to tie myself to the reliability of a single channel” after Terra collapsed, Somani said.
Eclipse raised $6 million in pre-seed funding in under three weeks over the summer — it would raise $9 million in a seed round led by crypto venture capital firms Tribe Capital and Tabiya a few weeks later. Solana co-founder Anatoly Yakovenko was an Eclipse pre-seed investor, along with Polygon.
Somani told Blockworks that investors received equity plus yet-to-be-announced Eclipse tokens.
In its heyday, Terra was a giant in the fledgling DeFi industry. It once had $60 billion in locked value, with scores of engineers working on its ecosystem.
Today, Terra founder Do Kwon is wanted by Interpol. Terra’s comeback plan, Terra 2.0, has been slow to materialize. But the developers who built the blockchain — including Somani — haven’t disappeared from crypto. When Somani’s phone rings about new crypto projects, he recommends ex-Terra developers.
“I’ll say, ‘Hey, I know these guys through Terra. They built a huge protocol. They crushed it,’” Somani said. “Of course, Terra didn’t work out, but I still think that they’re fantastic builders.”