Solv Protocol launches SAL stake abstraction layer leading BTCFi ecosystem innovation

Solv Protocol: Exploring the Stake Abstraction Layer and Liquidity Mechanism in the BTCFi Ecosystem

Solv Protocol is a project established in 2020, aimed at lowering the barriers to creating and using on-chain financial instruments, bringing diversified asset classes and yield opportunities to the crypto space. The project focuses on minting and trading NFTs related to financial ownership certificates. In 2024, with the continuous development of the BTCFi track, Solv Protocol has shifted its focus to BTCFi, creating the all-chain yield Bitcoin asset SolvBTC, providing new opportunities and possibilities for Bitcoin holders while creating an efficient BTCFi ecosystem. Recently, Solv Protocol launched the Staking Abstraction Layer (SAL), simplifying and standardizing the cross-chain Bitcoin staking process, abstracting the complexities of Bitcoin staking scenarios, allowing users and developers to adopt it quickly.

Solv Protocol Research Report: Exploring the Staking Abstraction Layer and Liquidity Mechanism in the BTCFi Ecosystem

Project Basic Information

  • Launch time: June 2021 mainnet launch
  • Solv Protocol has not issued tokens

Project Team

Core Team

  • Ryan Chow: Co-founder. Graduated from Beijing Foreign Studies University and previously served as a co-founder at Beijing Youzan Technology, focusing on applying blockchain technology to automotive industry databases. Additionally, he worked as a financial analyst at Singularity Financial, researching blockchain technology integration and financial regulation.

  • Will Wang: Co-founder. Created "ERC-3525: Semi-Homogeneous Token Standard". He has worked in the financial IT field for 20 years and has led the design and development of the world's largest banking accounting system based on open platforms and distributed technology. He is the recipient of the "Zhongguancun 20th Anniversary Outstanding Contribution Award."

  • Meng Yan: Co-founder. Formerly served as Vice President of CSDN, and he is also an active KOL in the Crypto industry.

Financing Situation

Solv Protocol has raised approximately $29 million through three rounds of financing.

Angel Round

  • On November 10, 2020, completed a $6 million angel round of financing, led jointly by Laser Digital, UOB Venture, Mirana Ventures, ApolloCrypto, Hash CIB, GeekCartel, ByteTrade, Jingwei Ventures, BincVentures, and Emirates Consortium.

Seed Round

  • On May 8, 2021, completed a $2 million seed round financing, invested by a certain investment institution.
  • On August 30, 2021, completed a $4 million seed round financing, led jointly by Blockchain Capital, Sfermion, and Gumi Cryptos Capital, with participation from DeFi Alliance, Axia 8 Ventures, TheLao, CMSholdings, Apollo Capital, Shima Capital, SNZ Holding, Spartan Group, and others.
  • On August 1, 2023, completed a $6 million seed round financing, with investments from institutions such as Laser Digital, a subsidiary of a major Japanese bank, UOB Venture Management, Mirana Ventures, Emirates Consortium, Jingwei China, Bing Ventures, Apollo Capital, HashCIB, Geek Cartel, and Bytetrade Labs.

Strategic Round

  • On October 14, 2024, completed a $11 million strategic financing, with participation from companies such as Laser Digital, Blockchain Capital, and OKX Ventures.

Development Strength

Since its inception in 2020, Solv Protocol has been dedicated to lowering the barriers to creating and using on-chain financial instruments. After the emergence of the BTCFi track, the project quickly issued the BTC-wrapped asset SolvBTC and rapidly captured the LST market based on BTC. The Solv Protocol technical team is strong and has completed the development of various key technical milestones on schedule.

Operating Mode

Solv Protocol advocates unlocking $1.3 trillion in BTC asset potential through BTC staking. In 2024, the project will shift its focus to BTCFi, launching the fully chain-yield BTC asset SolvBTC, which releases the staking liquidity of BTC. The recently launched Staking Abstraction layer (SAL) marks the beginning of Solv Protocol's aggregation of BTC liquidity.

Integrated Stake Platform

The Solv Protocol framework breaks down the staking process into four key roles:

  1. LST issuer: Create liquidity yield tokens (LST) linked to staked Bitcoin.
  2. Staking Agreement: Manage the Bitcoin deposited by users and provide secure returns.
  3. Staking Validators: Responsible for verifying transactions to ensure the legality and security of staking transactions.
  4. Yield Distributors: Ensure that staking rewards are transparently and fairly distributed to LST holders.

Solv Protocol Research Report: Exploring the Staking Abstraction Layer and Liquidity Mechanism in the BTCFi Ecosystem

Staking Abstraction layer (SAL) 质押抽象层

SAL is a modular architecture designed to facilitate secure and efficient BTC accounting. The main components include:

  • Staking Parameter Matrix (SPM)
  • LST Generation Module
  • Transaction Generation Module
  • Validator Node
  • Profit Distribution Module

SAL has simplified the implementation of staking, promoting greater adoption of dApps. However, since Bitcoin itself does not support staking, all third-party staking may pose security risks. SAL needs to continuously address challenges related to operational robustness and security.

Solv Protocol Research Report: Exploring the Staking Abstraction Layer and Liquidity Mechanism in the BTCFi Ecosystem

Advantages Compared to Other BTCFi Projects

  1. Security Guarantee: Ensuring the safety of staking transactions by integrating Active Verification Services (AVS).
  2. Process Optimization: Simplify user stake operations.
  3. Full-Chain Yield Aggregation Platform: Adopts the CeDeFi model, combining CeFi and DeFi.
  4. Industry Standardization: Promote the standardization of the LST industry based on BTC.
  5. Unified Liquidity: As a unified liquidity entry point in the BTCFi industry.

Project Model

business model

The Solv Protocol economic model consists of two roles:

  1. BTC and LST stakers
  2. Projects in collaboration with Solv

The income source of Solv Protocol: charging a certain percentage of user earnings.

Token Model

Solv Protocol has not released any tokens or token issuance plans.

On-chain Data

TVL

The TVL of Solv Protocol has experienced a significant increase from January 2024 to the present, rising from 1.153 billion USD to 1.783 billion USD in nearly a month, with a growth rate of 54.64%.

Solv Protocol Research Report: Exploring the Staking Abstraction Layer and Liquidity Mechanism in the BTCFi Ecosystem

User Count

The number of users of SolvBTC has grown rapidly, increasing from 185,799 in August to 397,324 now, a growth rate of 113.85%.

Solv Protocol Research Report: Exploring the Staking Abstraction Layer and Liquidity Mechanism in the BTCFi Ecosystem

Supported Projects

Solv Protocol has received support from multiple public chains and DeFi projects, with its wrapped assets SolvBTC, SolvBTC.BBN, SolvBTC.ENA, and SolvBTC.CORE being adopted across various chains and DeFi projects.

Solv Protocol Research Report: Exploring the Staking Abstraction Layer and Liquidity Mechanism in the BTCFi Ecosystem

Comparison with a Certain Project

Solv Protocol has a close partnership with a certain project in the BTC staking field, but each has its unique functions and positioning. The certain project focuses on BTC staking, while Solv Protocol is a full-chain yield and liquidity protocol. Solv Protocol's TVL is $1.783 billion, surpassing the certain project's $1.605 billion.

Solv Protocol Research Report: Exploring the Staking Abstraction Layer and Liquidity Mechanism in the BTCFi Ecosystem

Project Risks

  1. Smart Contract Vulnerability Risks
  2. Lack of a clear token economic model
  3. Challenges of Decentralized Management
  4. Liquidity Risk
  5. The risks of high-risk DeFi protocols
  6. Market Acceptance and User Trust

Summary

Solv Protocol, as an innovative project in the BTCFi space, integrates the Bitcoin staking ecosystem through SolvBTC and SAL technology. The project demonstrates rapid growth in TVL and user numbers, reflecting market recognition. However, Solv Protocol also faces security risks, a lack of token economic models, and challenges in decentralized governance. Despite the risks, these are common in BTCFi projects. After launching SAL, Solv Protocol's development direction has significantly changed from merely providing BTC-based LST projects to aggregating the development cap of dispersed liquidity across the entire chain. Therefore, Solv Protocol is a project worth investing in and paying attention to.

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zkProofInThePuddingvip
· 3h ago
The hype for BTCFi is back again.
View OriginalReply0
Fren_Not_Foodvip
· 18h ago
I was thinking, the abstract has arrived.
View OriginalReply0
StakeTillRetirevip
· 08-07 15:36
The BTC ecosystem finally got some new activity.
View OriginalReply0
StakeOrRegretvip
· 08-07 15:24
Isn't BTCFi great? It goes well with
View OriginalReply0
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