When Bitcoin prices start with a 1 again, they are already six figures.
Since the low point in November 2022, Bitcoin has risen by 570%, pushing its market capitalization close to 2 trillion USD, surpassing the government bond markets of countries like Spain and Brazil, and approaching the total market capitalization of the entire FTSE 100 Index (the top 100 companies in the UK stock market by market capitalization).
In this new trend, one company successfully seized the opportunity, rebounding from a crisis and achieving a remarkable transformation. That company is MicroStrategy.
As of January 6, MicroStrategy has held 446,400 Bitcoins, accounting for 2.12% of the global Bitcoin supply.
Due to its high correlation with Bitcoin, MicroStrategy's stock price has also formed the phenomenon of 'Bitcoin shadow stock.' In December 2022, when Bitcoin fell to its lowest point, MicroStrategy's stock price dropped to a low of $14.16, while today, two years later, its stock price has surged to a high of $473, with a market capitalization reaching close to $100 billion, an increase of over 3,720%, making it a popular choice among Wall Street hedge funds.
And the source of all miracles began with Michael Saylor's decision to adopt a Bitcoin reserve strategy.
MicroStrategy's 'Davis Double-Click'
It is worth noting that MicroStrategy's growth logic is based on its unique financial leverage in traditional and crypto markets, amplifying the growth rate of corporate assets through external financing, thus enhancing shareholder returns.
Under MicroStrategy's operational model, the increase in Bitcoin reserves will continuously raise the company's equity per share (net asset per share). When Bitcoin prices rise, not only does the value of reserves increase, but the funds obtained through ATM and convertible bond financing can also accelerate appreciation.
This phenomenon is referred to as the 'Davis Double-Click', where shareholder returns come from two aspects: one is the rise in Bitcoin prices, and the other is the effect of the company expanding its asset scale through financing.
Michael Saylor once specifically stated that 'MicroStrategy = Bitcoin Wealth Operation + Bitcoin Reserves, where the wealth operation business includes issuing securities, acquiring Bitcoin, adjusting leverage, and fund dividends.'
Unfortunately, MicroStrategy's Bitcoin reserve model still has some limitations, particularly in not fully leveraging the dynamic yield potential brought by Bitcoin reserves.
It is against this backdrop that the emergence of the Solv protocol opens new avenues for Bitcoin asset management, providing a more proactive solution than MicroStrategy's 'buy and hold' model, becoming a more imaginative on-chain MicroStrategy.
The transformation of Bitcoin's on-chain reserves: from idle assets to dynamic yield generation
Imagine if this financial leverage model could be replicated in the crypto market itself, creating a native crypto protocol similar to a 'MicroStrategy' growth flywheel; what would we need first?
First, it is necessary to understand several core elements of MicroStrategy's growth flywheel: the operation of financial leverage, Bitcoin as a value anchor, and the cycle of capital appreciation and reinvestment.
Therefore, to successfully transform this model into an 'on-chain MicroStrategy' in the crypto market, the key lies in establishing a solid value anchor, such as Bitcoin or other crypto assets, as a foundation to support corporate asset and capital appreciation. Secondly, it requires designing a flexible fundraising and incremental capital mechanism, and driving the growth of the company's market value through the appreciation of these assets. This continuous input of capital and reinvestment of appreciation will form a sustained 'growth flywheel', thus enhancing the overall asset value and creating returns for investors. Ultimately, leveraging the innovative capabilities of the DeFi ecosystem can enhance asset liquidity and yield generation capacity, providing momentum for market expansion and financialization.
Solv Protocol is a native yield platform supported by decentralized asset management infrastructure, dedicated to tokenizing and aggregating high-quality yields across the entire industry. It acts as a unified liquidity gateway designed to lower the barriers and costs for users seeking quality investment opportunities. Users can obtain SolvBTC by depositing Bitcoin into the platform, which is a token generated by staking Bitcoin. SolvBTC holders can gain additional native Bitcoin yields while maintaining exposure to Bitcoin, including market-making strategies, delta-neutral capital interest rate strategies, cross-exchange arbitrage, etc.
Compared to MicroStrategy's growth flywheel, Solv provides a unique path for capital appreciation and capital expansion capabilities through innovative staking mechanisms and a full-chain yield aggregation platform.
Specifically, Solv's 'flexibility' in fundraising is reflected in its staking and liquidity strategies. By converting Bitcoin into SolvBTC, Solv achieves both appreciation of Bitcoin and provides various yield generation mechanisms. This dynamic 'buy and stake' strategy model is more flexible compared to MicroStrategy's 'buy and hold', and can offer more application scenarios and appreciation pathways for Bitcoin.
Through this mechanism, Solv essentially created an 'incremental capital' model: as Bitcoin staking and yield strategies continue to advance, Solv can continually expand its Bitcoin reserves and also increase its platform's capital value and the ongoing attractiveness of its ecosystem through dynamic yield generation mechanisms. This means that in the management of Bitcoin as a reserve asset, Solv's strategy has an essential similarity to MicroStrategy's, as both rely on the reserve value of Bitcoin to drive the growth of corporate market value. However, through a decentralized approach, it enables more diversified and higher liquidity in capital appreciation.
Additionally, according to its latest announcements, Solv is creating Bitcoin reserves owned by the protocol through the launch of Bitcoin Reserve Products (BRO), with proceeds used to purchase Bitcoin. The first BRO will be open to institutional buyers from the traditional finance sector (TradFi) and will be launched after the official release of the SOLV token. However, detailed information about the first BRO sale, including ticket, maturity date, and conversion premium, has yet to be announced.
In other words, Solv not only achieved the same growth flywheel as MicroStrategy but also transformed its Bitcoin reserves into continuously growing financial assets through staking and yield aggregation mechanisms, significantly attracting Bitcoin holders to participate in its platform's reserves and staking, forming a larger self-appreciation and capital expansion growth flywheel.
On the other hand, if benchmarked against MicroStrategy, Solv's market value will also grow significantly with the increase of its Bitcoin reserves.
According to Defillama data, Solv Protocol's Bitcoin locked amount has exceeded 33,000 BTC, with a total platform locked value close to 3.3 billion USD. If the amount of Bitcoin held by Solv reaches a scale similar to MicroStrategy, assuming it holds 400,000 Bitcoins, then at current prices, its market value may exceed hundreds of billions of dollars, even approaching a trillion dollars.
Solv: On-chain MicroStrategy leads the future of digital asset on-chain management
Solv represents a breakthrough innovation in on-chain Bitcoin reserve management, enabling retail and institutional investors to obtain diversified yield opportunities without sacrificing liquidity through the Staking Abstraction Layer (SAL), SolvBTC, and SolvBTC.LST (liquid staking tokens), thus seamlessly integrating Bitcoin into the DeFi ecosystem.
At the same time, compared to other homogenized projects in the BTCFi space, this project also demonstrates some unique advantages, particularly in liquidity integration and innovation in asset management.
Compared to other projects, Solv's key advantage lies in introducing more efficient yield generation mechanisms within the Bitcoin ecosystem and further optimizing user experience and fund management through the Staking Abstraction Layer (SAL) and full-chain yield aggregation platform. In this framework, Solv has launched four SolvBTC LSTs: SolvBTC.BBN (Babylon), SolvBTC.ENA (Ethena), SolvBTC.Core, and SolvBTC.JUP (Jupiter Exchange on Solana).
On one hand, Solv employs its security system Solv Guardian to ensure the security of staking transactions. Guardian has dynamic adaptability, optimizing rules in real-time according to updates in blockchain and staking protocols, collaborating with protocol developers to establish strict security standards and risk control systems, ensuring high reliability of operations. Its unified security mechanism spans EVM smart contracts and Bitcoin mainnet transactions, providing users and developers with a consistent security experience. As a core component of SAL, Solv Guardian lays the foundation for the standardization and diversification of Bitcoin staking, expands Bitcoin's financial application scenarios, and ensures a comprehensive balance in flexibility and security for staking services, promoting the sustainable development of the staking ecosystem.
On the other hand, Solv has proposed an industry-standard Bitcoin yield product model, providing standardized and diversified solutions for Bitcoin staking through the launch of SAL. SAL abstracts the technical differences of different staking protocols through smart contracts, constructs a unified operational framework, and can flexibly design LST based on lock-up periods, yield distribution mechanisms, and liquidity characteristics, offering users diverse yield options and significantly enhancing capital efficiency and staking flexibility. With SAL, users can earn staking rewards while applying LST to leverage staking, arbitrage trading, and other complex strategies, further optimizing asset liquidity and yield.
Based on this, Solv has currently established a broad ecosystem covering 15 mainstream public chains and over 50 DeFi protocols, creating a highly interconnected staking network for users. By integrating multi-chain and multi-protocol resources, Solv provides robust technical support and rich application scenarios for Bitcoin staking, significantly enhancing users' staking experience and capital management efficiency.
Currently, Solv Protocol has received support from investment institutions such as Binance Labs, Blockchain Capital, Laser Digital, and OKX Ventures, and has undergone comprehensive reviews by several security audit firms, including Quantstamp, Certik, SlowMist, Salus, and Secbit. Recently, Solv announced the completion of a strategic round of financing amounting to $11 million, bringing its total funding to $25 million, which will be used for the development of Solv's staking abstraction layer products and ecosystem expansion.
Overall, Solv Protocol is gradually shaping its image as 'MicroStrategy 2.0' in the crypto industry through continuous accumulation of Bitcoin reserves and technological innovation.
Recently, Binance announced that SolvProtocol (SOLV) will be launched on the Megadrop platform, with a maximum supply of 9.66 billion tokens (increased through governance votes as determined by Bitcoin reserve fundraising plans), an initial supply of 8.4 billion tokens, and Megadrop rewards of 588 million tokens (accounting for 7% of the initial supply), with an initial circulating supply of 1.4826 billion tokens (accounting for 17.65% of the initial supply). The official arrival of TGE will provide Solv with more capital support, accelerating its expansion in the crypto industry. The launch of SOLV tokens not only provides strong financial ammunition for the project's Bitcoin reserve plan but also lays the foundation for its position in the BTCFi industry, positioning it as a potential on-chain MicroStrategy.
This article is reprinted with permission from: (ForesightNews)
Original author: Chandler, Foresight News
'MicroStrategy 2.0? The Solv Protocol rises strongly, can it become an on-chain Bitcoin wealth company?' This article was first published in 'Crypto City'
