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Earn yields in Bitcoin, Solv announces new token on Avalanche.
On the 16th, Solv Protocol, which builds financial services for cryptocurrency (virtual currency) Bitcoin (BTC), announced the launch of the yield-earning token "SolvBTC.AVAX."
SolvBTC.AVAX is a token natively deployed on the Avalanche (AVAX) blockchain. By utilizing tokenized RWA (real-world assets) for management behind the scenes, it provides a new means of yield generation for Bitcoin, which is often held without generating interest.
What is RWA?
An abbreviation for "Real World Asset." RWA that is tokenized on the blockchain includes physical assets such as real estate, artworks, and trading cards, as well as securities such as stocks and bonds.
Solv Protocol points out that while the majority of Bitcoin is being held, major US asset management firms like BlackRock are entering the market, leading to significant growth in the tokenization of RWA. They suggest that the next trend for Bitcoin is the integration with RWA.
From the user's perspective, SolvBTC.AVAX has a simple mechanism. By depositing "BTC.b" on Avalanche, which is backed 1:1 by Bitcoin, or "SolvBTC" from the Solv Protocol, it is possible to receive SolvBTC.AVAX. For users, the mechanism for earning yield is automated, allowing them to earn yield simply by holding SolvBTC.AVAX.
The purpose of launching SolvBTC.AVAX is to enhance the resilience and capital efficiency of the Bitcoin economy. The Solv Protocol aims to transform Bitcoin from merely a store of value into a productive asset.
About the mechanism
From the user's perspective, the mechanism is simple, but to generate yields, the Solv Protocol has collaborated primarily with the following four projects besides Avalanche.
To generate yield for SolvBTC.AVAX, behind the scenes, a stablecoin "deUSD" partially backed by RWA tokens such as BlackRock's "BUIDL" is issued on Elixir, and that deUSD is utilized in the lending service Euler.
Solv Protocol described SolvBTC.AVAX as "a token that leverages the strengths of DeFi (decentralized finance) to generate yield and unlock modular returns backed by RWA for the first time in Bitcoin."
In this initiative, a reward program is being implemented where users holding SolvBTC.AVAX can receive AVAX.