Solv Protocol: BTCFi ecosystem innovator, staking abstraction layer leads the liquidity revolution.

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

Introduction

Solv Protocol was established in 2020 with the aim of lowering the barriers to creating and using on-chain financial tools, bringing a diverse range of 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 development of the BTCFi track, Solv Protocol will shift its focus to BTCFi, creating the all-chain yield Bitcoin asset SolvBTC, providing new opportunities for Bitcoin holders while establishing an efficient BTCFi ecosystem. Recently, Solv Protocol launched the staking abstraction layer (SAL), simplifying and standardizing the cross-chain Bitcoin staking process, abstracting the complexity of Bitcoin staking scenarios, allowing users and developers to adopt it quickly.

Project Basic Information

Basic Information

Website: solv.finance

Twitter: @SolvProtocol, Followers 272,000

Launch time: Mainnet launched in June 2021, Solv Protocol has not issued tokens.

Project Team

Ryan Chow: Co-founder. Graduated from Beijing Foreign Studies University, previously served as co-founder at Beijing Youzan Technology, dedicated to 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 20 years of experience in the financial IT field and has led the design and development of the world's largest bank accounting system based on open platforms and distributed technology. He is the recipient of the "20th Anniversary Outstanding Contribution Award of Zhongguancun".

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

Financing Status

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

Angel Round

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

Seed Round

On May 8, 2021, it was announced that a $2 million seed round financing was completed, invested by Binance Labs.

On August 30, 2021, it was announced that a $4 million seed round financing had been completed, 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, it was announced that a $6 million seed round financing has been completed, with investments from institutions such as Laser Digital under the Japanese banking giant Nomura Securities, 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, it was announced that a strategic financing of 11 million USD was completed, with participation from companies such as Laser Digital, Blockchain Capital, and OKX Ventures.

During the three rounds of financing, Solv Protocol raised a total of $29 million, with well-known investment institutions such as Binance Labs, Blockchain Capital, Laser Digital, Matrix Partners China, and OKX Ventures making significant investments. The capital sector is very optimistic about the future development of Solv Protocol.

Development Strength

The Solv Protocol project was initiated in 2020. Key events in the project's development are shown in the table:

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

From the key events in the project development of Solv Protocol, it can be seen that Solv Protocol has been working hard to lower the barriers to creating and using on-chain financial tools. This has enabled Solv Protocol to quickly issue SolvBTC, a wrapped asset of BTC, after the rise of the BTCFi sector, and to quickly capture the LST market based on BTC. In terms of the timeline for achieving various key technical milestones, Solv Protocol has completed the development of project technology as scheduled, indicating that the technical team of Solv Protocol is strong.

Operating Mode

As the largest asset in the Crypto industry, BTC has a market value of over $1.3 trillion. However, for a long time, BTC holders have simply held onto their BTC without unlocking its potential value like ETH. Therefore, Solv Protocol advocates unlocking the $1.3 trillion BTC asset potential through BTC staking. In 2024, Solv Protocol will shift its project focus to BTCFi, launching the full-chain yield BTC asset SolvBTC, which can release the staking liquidity of BTC. Recently, the concept of Staking Abstraction layer (SAL) has been introduced, marking the beginning of Solv Protocol's aggregation of BTC liquidity.

Integrated Stake Platform

In the Solv Protocol architecture, the staking process is divided into four key roles, and they are closely linked together through an integrated platform architecture:

  • LST Issuers (: Create liquidity yield tokens linked to staked Bitcoin ) LST (. Solv is currently the largest Bitcoin LST Issuer in the market. It allows users to maintain asset liquidity while staking the Token ) LST (, participating in DeFi and other yield activities.

  • Staking Protocols ): Manage users' deposited BTC and provide secure returns. Integrated staking protocols such as Babylon, CoreDao, Botanix, Ethena, GMX, and others provide sources of BTC staking returns. By staking BTC in POS networks, users receive rewards from POS chains.

  • Staking Validators (: Ceffu, Cobo, Fireblocks, Solv Guard, etc. are responsible for validating transactions, ensuring the legality and security of staking transactions, verifying that the staked Bitcoin corresponds to the LST Token, and updating the verification status in a timely manner.

  • Yield Distributors ): Ensure that staking rewards are transparently and fairly distributed to LST holders, guaranteeing that users can receive staking returns in a timely manner. Babylon, Pendle, Gauntlet, Antalpha, etc.

Solv Protocol has built a complete Bitcoin staking ecosystem by integrating these four key roles. By integrating the staking protocol, LST issuers, validators, and yield distributors, it achieves seamless interaction between the Bitcoin mainnet and EVM-compatible chains, simplifying the staking implementation for users and developers. The staking protocol provides a source of yield for staked Bitcoin, LST issuers issue liquidity staking tokens, allowing users to maintain asset liquidity during the staking period, validators are responsible for verifying the legality and security of staking transactions, and yield distributors are responsible for transparently distributing the yields generated from staking to LST holders. This provides users with a more convenient, secure, and attractive staking experience.

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

Staking Abstraction layer(SAL)Staking Abstraction Layer

Staking Abstraction Layer (SAL) is a modular architecture designed to facilitate secure and efficient BTC accounting through key components that interact with the Staking Parameter Matrix (SPM). The key modules of SAL include LST generation module, transaction generation module, validating nodes, and profit distribution module, all of which rely on SPM to define transaction rules, validation standards, and profit calculations. These components together form a framework that ensures the security, transparency, and efficiency of BTC accounting and LST issuance, allowing users to maximize profits while minimizing risks associated with the accounting process and cross-chain interactions.

Staking Parameter Matrix ( SPM ): The purpose of the SPM module is to standardize various settings and parameters for BTC staking. SPM provides developers with a simple and standard set of rules, allowing them to more easily integrate BTC staking scenarios into their applications without having to design complex systems from scratch.

LST Generation Module: The LST generation module is designed to simplify the issuance of cross-chain liquidity staking Token ( LST ). The issuance process for cross-chain staking Tokens has been standardized and automated, allowing users to engage in complex cross-chain operations without manual participation. This module enables LST issuers to quickly and conveniently issue liquidity staking Tokens and distribute these Tokens to users.

Transaction Generation Module: The function of the transaction generation module is to automatically generate and broadcast BTC stake transactions. Simply put, the job of this module is to automatically create and send stake transactions to the BTC mainnet. Previously, users had to manually perform many steps, but now this module will automatically help users complete most of the work, making the staking process much easier.

Validator Nodes: Real-time verification of the legality and security of staking transactions. The role of validator nodes is to ensure that all staking transactions are legitimate and secure. When users stake, these nodes will check and verify the correctness of the transactions, confirming them only after ensuring there are no issues.

Revenue Distribution Module: Responsible for correctly mapping staking rewards to LST holders. When users earn rewards through staking, the revenue distribution module is responsible for correctly distributing these rewards to the users' LST Tokens. Users can earn corresponding staking rewards based on the proportion of LST Tokens they hold.

In summary, SAL, as a staking abstraction layer, is characterized by integrating multiple staking participants (, including Bitcoin staking providers, yield acquisition, and DeFi scenario unlocking ), encapsulating these complex processes into standardized modules. This allows developers to quickly integrate Bitcoin staking functionality into their own applications and enables users to initiate staking in a comprehensive manner. SAL is simplifying the implementation of staking to promote greater adoption of dApps. DeFi applications or wallet applications only need to integrate SAL to provide a range of staking options for their user base. However, since Bitcoin itself does not support staking, all third-party staking may pose certain security risks, and SAL is no exception. Because SAL integrates staking-related solutions, the technical complexity and compatibility behind the integration may also introduce new security risks. Therefore, SAL needs to continually 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

Solv Protocol, as an LST project in the BTCFi track, has many projects in the market with a high degree of homogeneity with it, such as Bedrock, Lombard, Lorenzo, Pell Network, PumpBTC, and Stakestone, each of which has a high similarity to Solv Protocol. After Solv Protocol launched SAL, it began to focus on integrating BTC liquidity, which has a significant advantage compared to other projects.

( Security Guarantee

Solv Protocol ensures the security of stake transactions by integrating the active verification service )AVS(. The AVS system comprehensively monitors various aspects of stake transactions, including the target address, script hash, stake duration, etc., to ensure the validity and security of the transactions, thereby avoiding errors or malicious behavior. This comprehensive monitoring and verification mechanism provides reliable protection for users' stake transactions.

) Process Optimization

Solv Protocol optimizes the staking process of the project while integrating BTC liquidity, allowing users to stake more conveniently. Users only need to deposit Bitcoin into the platform without having to perform any other on-chain operations, which ensures user safety while improving staking efficiency and allowing them to earn profits.

Full-chain Yield Aggregation Platform

Solv Protocol is a full-chain yield aggregation platform that adopts the CeDeFi model, combining CeFi and DeFi to provide transparent contract management services. It ensures asset security and efficient system operation through the multi-signature contract address of Gnosis Safe and the Solv Vault Guardian, which allows for refined permissions and conditional execution.

( Industry Standardization

After the launch of SAL, Solv Protocol aims not only to integrate the liquidity of BTC but also to promote the industry standardization of BTC-based LST. As a standardized staking process that regulates the BTC staking procedures and parameter systems, establishing industry standards can facilitate cooperation and communication among various parties in the industry, promote healthy development, and provide users with more stable and reliable staking services.

) Unified Liquidity

Solv Protocol serves as a unified liquidity entry point in the BTCFi industry, integrating various liquidity resources and investment opportunities into a single platform through the launch of SAL. Users can find and manage their investments on Solv Protocol without having to access multiple different platforms or protocols, simplifying the operational process.

In summary, Solv Protocol will launch SA

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WagmiOrRektvip
· 22h ago
BTCFi is thriving
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RektCoastervip
· 22h ago
The BTC boss is here.
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digital_archaeologistvip
· 22h ago
The potential of the BTCFi track is limitless.
View OriginalReply0
NFTRegrettervip
· 22h ago
BTCFi surges forward
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IntrovertMetaversevip
· 22h ago
worth following
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SerumSqueezervip
· 22h ago
Promising projects
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