How Bryan Colligan Achieved $400 Million in Two Months: A Q&A on Growth and DeFi Strategies

Q: You managed to achieve $400 million in TVL in just two months. How did you do it?

Bryan Colligan: It involved a lot of mistakes, really. Growth marketing, or any kind of growth strategy, is about making assumptions, testing them, and learning from the results. In our case, we got a $1.8 million grant from Arbitrum, which turned into $800,000 due to market fluctuations. We had a limited time frame of three months to spend it, so we iterated quickly. Initially, it was what we call "mercenary TVL," but we learned how to make it sticky.

Q: What role did grants play in your strategy?

Bryan: Grants were a huge part of our strategy. We've been in the grant space for a long time, deploying over $30 million across 190 DeFi protocols. For this specific project, we identified an opportunity in the USDT market on Arbitrum. We won a grant of $1.8 million in ARB, which was supposed to be worth $3.6 million, but by the time it was fully distributed, it had shrunk to $800,000. That was the budget we had to work with, so we had to be strategic and make quick iterations to grow the TVL.

Q: How did you identify the need for a stablecoin market on Arbitrum?

Bryan: We analyzed the market cap and liquidity needs on the chain. For example, if there's a significant market cap of USDT on a chain, it makes sense to have a USDT market. On Arbitrum, we saw about $3 billion in USDT, indicating a strong demand. We then leveraged this data to pitch the idea and secure grants, ultimately focusing on making the liquidity sticky.

Q: You mentioned 'mercenary TVL.' What exactly does that mean?

Bryan: Mercenary TVL is primarily from retail investors and is not necessarily stable. Initially, it's about attracting liquidity, but what you really want in lending protocols is 'sticky' TVL, which comes from structured products like long-term leverages and delta-neutral strategies. We worked on getting these products embedded within our ecosystem to ensure the TVL remained stable and sticky.

Q: What makes Arbitrum the "DeFi chain" right now?

Bryan: Arbitrum is where a lot of DeFi action is happening. It has programs like STIP, and real yield phenomena like GMX, making it the current DeFi haven. While other chains like Solana have their niches, especially with meme coins, Arbitrum has become the go-to for serious DeFi activities. We wanted to be where the party was, and Arbitrum was that place.

Q: How did you attract the large amounts of TVL you mentioned?

Bryan: We focused on structured products and strategic partnerships. By identifying the biggest holders of Aave tokens and analyzing structured products holding significant portions of Aave, we could target them with deals. It was about pitching to these structured products, negotiating large deals, and ensuring they saw the potential returns.

Q: Did you encounter any challenges with managing grants and liquidity?

Bryan: Absolutely. One of the key challenges was managing the fluctuating value of ARB. Between the award and distribution, the value of the grant decreased significantly, which meant that we had to constantly adapt our strategy. We also had to deal with market dynamics, making sure we could create a compelling offering for both retail and institutional investors.

Q: Are you planning to go back to Arbitrum for more funding?

Bryan: The plan isn't necessarily to keep asking for more funds. We aim to reproduce this model across other chains. We have a clear playbook now—different structured products, distribution channels, and the ability to generate additional yield. We want to take this strategy to the next level, whether on Arbitrum or another chain.

Q: What do you see as the next big step for your strategy?

Bryan: Acquisition and expansion. There's a significant hole in the market for acquiring and managing protocols. We see opportunities in acquiring undervalued protocols, managing them effectively, and growing them. Many protocols have been abandoned by their founding teams within 18 to 36 months, leaving behind untapped potential.