Solv Protocol: Explore the staking abstraction layer and liquidity mechanism in the BTCFi ecosystem

Solv Protocol is a project founded in 2020 that aims to lower the barrier to entry for 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 title certificates. With the continuous development of the BTCFi track, Solv Protocol has focused on BTCFi, creating a full-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) to simplify and standardize the cross-chain Bitcoin staking process, allowing users and developers to quickly adopt.

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

Basic information about the project

Website: solv.finance Twitter: @SolvProtocol, 272,000 followers Launch time: The mainnet will be launched in June 2021

Project Team

• Ryan Chow: Co-founder. Graduated from Beijing University of Foreign Chinese, he served as a co-founder of Beijing Yourin Technology.
• Will Wang: Co-founder. He has created the ERC-3525 semi-homogenized token standard and has been working in the financial IT field for 20 years.
• Meng Yan: Co-founder. Served as Vice President of CSDN and an active Crypto industry KOL.

Financing

Solv Protocol has raised approximately $29 million through three rounds of funding, with investors including Binance Labs, Blockchain Capital, Laser Digital, Matrix Partners China, OKX Ventures, and more.

Development Strength

Since its inception in 2020, Solv Protocol has continued to work hard in the direction of lowering the threshold for creating and using on-chain financial instruments. The technical development progress of the project is in line with expectations, demonstrating the strength of the technical team.

Run Mode

Solv Protocol integrates the four key roles of LST issuer, staking protocol, staking validator, and yield distributor through an all-in-one staking platform. As the core technology, the Staking Abstraction Layer (SAL) includes an LST generation module, a transaction generation module, a validator node, and a yield distribution module, simplifying the implementation process of Bitcoin staking.

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

Advantages over other BTCFi projects

1. Security: Integrate active verification services (AVS) ensure the security of staking transactions.
2. Process optimization: Simplify user staking operations.
3. Full-chain revenue aggregation platform: Adopt the CeDeFi model to provide transparent contract management services.
4. Industry standardization: Promote the standardization of the BTC-based LST industry.
5. Unified liquidity: As a unified liquidity entrance to the BTCFi industry.

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

Project model

The business model consists of two roles: BTC and LST stakers and cooperative projects. Solv Protocol charges a percentage of user revenue. No tokens or plans to issue coins have been released yet.

On-chain data

• TVL: increased by 54.64% from $1.153 billion to $1.783 billion.
• Number of users: increased by 113.85% from 185,799 to 397,324.

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

Support Projects

Solv Protocol is supported by multiple public chains and DeFi projects, including Avalanche, Mantle, Merlin, and more.

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

Comparison with Babylon

Solv Protocol is more like Lido, while Babylon is similar to Eigenlayer in BTCFi. Solv Protocol’s TVL ($1.783 billion) has surpassed Babylon ($1.605 billion).

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

Project Risk

1. Smart contract vulnerability risk
2. Lack of a clear tokenomics model
3. Challenges of decentralized governance
4. Liquidity risk
5. Risks of high-risk DeFi protocols
6. Market acceptance and user trust challenges

Summary

As an innovative project in the BTCFi track, Solv Protocol integrates the Bitcoin staking ecosystem through SolvBTC and SAL technology. The project has shown rapid growth in TVL and subscriber numbers, but it also faces some challenges and potential risks. Overall, Solv Protocol is a project worth paying attention to and investing in, and its aggregate full-chain BTC decentralized liquidity has broad development prospects.

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