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Solv Protocol launches the staking abstraction layer SAL to aggregate BTC liquidity.
Solv Protocol: Exploring the Staking Abstraction Layer and Liquidity Mechanism in the BTCFi Ecosystem
Solv Protocol was established in 2020 with the aim of lowering the barriers to creating and using on-chain financial tools, bringing diversified asset classes and yield opportunities to the crypto space. The project focuses on minting and trading NFTs related to financial ownership certificates. With the development of the BTCFi track in 2024, Solv Protocol is shifting its focus to BTCFi, creating a full-chain yield Bitcoin asset SolvBTC, providing new opportunities for Bitcoin holders while building 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 to facilitate quick adoption by users and developers.
Project Basic Information
Basic Information
Website: solv.finance
Twitter: @SolvProtocol, 272,000 followers
Launch Time: June 2021 Mainnet Launch, 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 the automotive industry database. In addition, he worked as a financial analyst at Singularity Financial, researching the integration of blockchain technology 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, having led the design and development of the world's largest banking accounting system based on open platforms and distributed technologies. He is the recipient of the "Zhongguancun 20th Anniversary Outstanding Contribution Award."
Meng Yan: Co-founder. Formerly served as Vice President of CSDN, 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
Seed Round
Strategic Round
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, indicating that the capital sector is optimistic about the future development of Solv Protocol.
Development Strength
In 2020, the Solv Protocol was initiated. The key events in the development of the project are as follows:
From the perspective of key events in the development of the Solv Protocol project, the project has been working hard to lower the threshold for creating and using on-chain financial tools. This has enabled Solv Protocol to quickly issue the wrapped asset SolvBTC after the rise of the BTCFi track and rapidly capture the BTC-based LST market. In terms of the timeline for achieving various key technical milestones, Solv Protocol has completed the development of project technology on schedule, demonstrating the strong strength of its technical team.
Operating Mode
BTC, as the largest asset in the Crypto industry with a market cap exceeding $1.3 trillion, has long been held by investors without releasing its potential value like ETH. Solv Protocol advocates unlocking the $1.3 trillion potential of BTC assets through BTC staking. In 2024, Solv Protocol will focus on BTCFi, launching the fully on-chain yield BTC asset SolvBTC to release the staking liquidity of BTC. Recently, it also introduced the Staking Abstraction layer (SAL) concept, marking the beginning of aggregating liquidity for BTC.
Integrated staking platform
The Solv Protocol framework breaks down the staking process into four key roles, closely linked through an integrated platform architecture:
LST Issuers (: Create liquidity yield tokens linked to staking Bitcoin ) LST (. Solv is currently the largest Bitcoin LST Issuer on the market. It allows users to maintain asset liquidity while staking Token ) LST ( and Bitcoin, 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, etc. offer sources of BTC staking returns. By staking BTC in POS networks, users receive rewards from POS chains.
Staking Validators (: For example, Ceffu, Cobo, Fireblocks, Solv Guard, etc., are responsible for verifying 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 timely receive their staking returns. For example, Babylon, Pendle, Gauntlet, Antalpha, etc.
Solv Protocol builds a complete Bitcoin stake ecosystem by integrating these four key roles, achieving seamless interaction between the Bitcoin mainnet and EVM-compatible chains, simplifying the implementation of stakes for users and developers. The staking protocol provides a source of returns 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 the yield distribution party is responsible for transparently distributing the returns generated from staking to LST holders. This provides users with a more convenient, safer, and more attractive staking experience.
Staking Abstraction layer(SAL)stake 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, validation nodes, and yield distribution module, all of which rely on SPM to define transaction rules, validation standards, and yield calculations. These components together form a framework that ensures the security, transparency, and efficiency of BTC accounting and LST issuance, allowing users to maximize their yields while minimizing risks associated with the accounting process and cross-chain interactions.
Staking Parameter Matrix ( SPM ): The role 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 function of the LST generation module is to simplify the issuance of cross-chain liquidity staking Token(LST). The issuance process of cross-chain staking Tokens has been standardized and automated, allowing users to avoid manually participating in complex cross-chain operations. This module enables LST issuers to quickly and conveniently issue liquidity staking Tokens and distribute these Tokens to users.
Transaction Generation Module: The purpose of the transaction generation module is to automatically generate and broadcast BTC staking transactions. Simply put, this module's job is to automatically create and send staking 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 simpler.
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 legal and secure. When users stake, these nodes check and verify the correctness of the transactions, ensuring that there are no issues before confirming the transactions.
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 receive corresponding staking rewards based on the proportion of LST Tokens they hold.
In summary, SAL serves as a staking abstraction layer, characterized by the integration of multiple staking participants ( including Bitcoin staking providers, yield acquisition, and unlocking DeFi scenarios ), encapsulating these complex processes into standardized modules. This enables developers to quickly integrate Bitcoin staking functionalities into their own applications and allows users to initiate staking in a comprehensive manner. SAL is simplifying the implementation of staking to facilitate the adoption of more dApps. For example, 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 carry certain security risks, and SAL is no exception. As SAL integrates staking-related solutions, the technical complexities and compatibility behind the integration may also introduce new security risks. Therefore, SAL needs to continuously address challenges related to operational robustness and security.
Advantages Compared to Other BTCFi Projects
Solv Protocol, as an LST project in the BTCFi track, has many competitors with a high degree of homogeneity in the market, such as Bedrock, Lombard, Lorenzo, Pell Network, PumpBTC, and Stakestone. After launching SAL, Solv Protocol began to focus on integrating BTC's Liquidity, compared to other projects, it has the following advantages:
( Security Assurance
Solv Protocol ensures the security of staking transactions by integrating the active validation service )AVS(. The AVS system comprehensively monitors all aspects of staking transactions, including target addresses, script hashes, staking periods, etc., to ensure the validity and security of transactions, thereby avoiding errors or malicious actions. This comprehensive monitoring and verification mechanism provides reliable protection for users' staking transactions.
) Process Optimization
Solv Protocol not only integrates BTC liquidity but also optimizes the project's staking process, allowing users to stake more conveniently. Users only need to deposit Bitcoin into the platform, without the need to perform any other on-chain operations, thus ensuring user safety while improving staking efficiency and allowing users to earn rewards.
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 achieves refined permissions and conditional execution through the multi-signature contract address of Gnosis Safe and Solv Vault Guardian, ensuring asset security and efficient system operation.
( Industry Standardization
Solv Protocol aims to promote industry standardization of BTC-based LSTs by launching SAL, in addition to integrating BTC liquidity. As a standardized staking process that regulates the BTC staking procedures and parameter system, establishing industry standards can facilitate collaboration and communication among all 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 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, after the launch of SAL, Solv Protocol further aggregates the decentralized BTC liquidity across the entire chain and provides a scalable and transparent unified solution. SAL simplifies the use of