Hello friends, today we are discussing SolvProtocol.

This is a relatively new project and has not yet issued a native token.

What problem does Solv protocol solve?

The official documentation defines itself as: On-chain Bitcoin Reserve

A blunt understanding is to create DeFi for BTC.

I have previously written about DeFi-related projects; DeFi stands for Decentralized Finance, taking the first letters of both words. The projects we've shared in the past have been concentrated in the Ethereum network, but BTC, which occupies half of the cryptocurrency assets, has rarely been mentioned. Why is that?

The biggest problem is with the BTC network itself; its design is very simple, not Turing complete, and the blocks are small, leaving almost no space for smart contracts. This means that developing smart contracts based on the BTC network: lacks capability and conditions.

The inability to develop smart contracts means that large-scale machine trading cannot be conducted, making DeFi even more unattainable.

Additionally, BTC is designed as PoW, and there is no PoS staking logic. The intention of PoS design is for coin holders to jointly maintain network security; honest verification earns rewards, while malicious verification leads to penalties. Thus, earning through staking in PoS is part of the infrastructure. BTC maintains network security through mining, not by staking tokens. This fundamental design difference means there are no official staking channels in the BTC network, nor are there any so-called staking rewards.

However, financial-related applications are indeed very suitable for the crypto world; all centralized facilities can be reconstructed in a decentralized world, building truly inclusive financial services. DeFi is also one of the few segments where commercial logic has been proven to work and can be profitable.

Who wouldn't be tempted by BTC, which is completely undeveloped and accounts for more than half of the entire cryptocurrency market cap?

So, go for it! If there are no conditions, create the conditions and go for it.

Solv's solution

In simple terms, Solv's solution is to provide a one-stop solution for BTC stakers.

Solv calls its core architecture: SAL (Staking Abstraction Layer).

The diagram looks a bit complex, but the logic is not difficult.

Solv believes that due to the lack of official staking channels in the BTC network, services are very fragmented, so my value is to aggregate them for you.

It integrates four roles in SAL, which are:

1. LST Issuer (gray): Provides liquidity for staking, meaning that after you stake BTC, you will receive other tokens issued by LST representing their staked assets, such as stSOL, stETH, etc.;

2. Staking Protocol (blue): Currently, major protocols cooperating with Solv include Babylon, CoreDao, and Jupiter;

3. Staking Guardian (light yellow): Check the correctness and completeness of each staking transaction;

4. Profit Distributors (orange): Fairly distribute profits to participating users, usually achieved through smart contracts.

This connects as follows: Users hold BTC, exchange it for LST tokens through LST, the original BTC flows into the staking protocol, and the protocol's profits are distributed to relevant participants via the profit distributor. Simultaneously, validators of staking transactions maintain the overall system's security.

In addition to the work of SAL, it can be seen that Solv also appears in the block group in the green area; Solv itself is an aggregator but can also participate in specific tasks, such as issuing LST.

What difficulties are faced

The problems Solv faces are the same as those faced by all projects trying to create DeFi for BTC. The BTC network we initially mentioned is not Turing complete, and the design logic does not support PoS. These problems are objective difficulties, along with subjective challenges.

Human issues: The BTC community is relatively conservative.

Compared to ETH's more transaction-oriented holders, a significant number of BTC holders are Holders. They believe this is digital gold, an asset that shouldn't be frequently traded, and should be stored in cold wallets to ensure safety above all else.

But I think this is not a fundamental issue; in the face of profit, there is no absolute stubbornness.

Why choose you: What is the unique value?

This is a question that has been difficult to answer while reviewing project materials. I feel some things are not clearly stated, and some information is limited.

The value wasn't clearly articulated: Solv repeatedly mentioned Lido; the logic in the white paper is about gaining investment: we are Lido in the BTC network. Lido is the leader in ETH staking, with huge potential when migrating to the BTC network, which investors can understand immediately. But then what? The problems Lido aims to solve are clear, its ecological niche in ETH is valuable, and the benefits and costs for users are well articulated. However, the issues Solv faces and the solutions it proposes are entirely different; the document mainly contains conceptual introductions with limited in-depth content. You can't just say JD is the Amazon of China and expect all problems to be solved; it's obvious JD and Amazon are completely different entities.

Limited information disclosure: How to profit and how to share with users, I think this is crucial information, but I couldn't find it disclosed. I care about whether the protocol itself can continue to operate in the future beyond external investments. Will I be concerned about interest results while others focus on my principal? I hope to see more pragmatic information.

I can understand this is a dilemma for a startup team; proving you are indispensable without any achievements can lead to a deadlock. This is just a new project launched at the beginning of 2024, and the team has had other attempts in the DeFi field; BTCFi is both an opportunity and a challenge.

Solution OR Problem solving

I believe that enabling BTC to participate in blockchain finance is something that should be done and has huge potential.

Solv's current solution integrates a usable plan under the current circumstances.

Solution providers can also thrive by aggregating existing services, offering customization for large and small clients, definitely making money and potentially big profits. This is a sales strategy; sell whatever you have, and top-notch salespeople can sell anything.

A more technical approach is to thoroughly solve this problem.

Whether a solution or problem-solving, the market needs it.

The entire market is very early, and BTCFi is even in the early stages of early, giving Solv more patience and hoping it grows faster.