YEREVAN (CoinChapter.com) — Solv Protocol announced plans to introduce an “onchain MicroStrategy” aimed at generating yield on Bitcoin reserves. Co-founder Ryan Chow shared the development in a post on X dated Nov. 29.
Ryan Chow Solv Protocol. Source: X
The project seeks to create a Bitcoin reserve that generates yield while preserving wealth. Details on the exact mechanism to achieve these objectives remain undisclosed.
Solv Protocol’s Current Yield Strategies
Solv Protocol currently manages over $3 billion in total value locked (TVL), according to data from DefiLlama. The platform provides Bitcoin staking services across multiple blockchain networks, targeting yield generation through various strategies.
Solv Protocol Staking Data. Source: Solv Protocol Web
It employs Bitcoin staking on BTC layer-2s like Babylon and CoreChain. Additionally, the protocol leverages decentralized finance (DeFi) platforms such as Jupiter and Ethena. These strategies allow Solv Protocol to create diversified avenues for Bitcoin reserves to generate active returns.
By positioning Bitcoin reserves within DeFi, Solv aims to maximize financial growth opportunities. The introduction of the onchain MicroStrategy expands this approach, integrating Bitcoin further into decentralized ecosystems.
MicroStrategy’s Bitcoin Strategy: A Source of Inspiration
MicroStrategy, a business intelligence firm led by Michael Saylor, adopted a bold Bitcoin strategy in 2020. The company transformed its balance sheet by purchasing Bitcoin in large quantities, effectively becoming a Bitcoin hedge fund.
MicroStrategy has experienced substantial growth in 2024, with its stock price rising by over 450% year-to-date, according to Google Finance. The firm introduced a performance metric called Bitcoin yield, which measures the ratio of BTC holdings to outstanding shares.
In an Aug. 1 earnings call, MicroStrategy committed to further increasing its Bitcoin reserves using equity and debt. The company’s strategy focuses on boosting its BTC-per-share ratio, benefiting its shareholders.
BTC Yield KPI Long-Term Target. Source: MicroStrategy Web MicroStrategy’s $21 Billion Bitcoin Plan
On Oct. 30, MicroStrategy revealed its “21/21 Plan,” a three-year initiative to raise $21 billion in equity and another $21 billion in debt. The funds will support additional Bitcoin purchases, further solidifying its position in the cryptocurrency market.
According to Benchmark analyst Mark Palmer, the company could achieve a Bitcoin yield of 12.7% by 2025. This approach showcases the potential of Bitcoin reserves as active financial tools rather than passive assets.
Notably, Solv Protocol’s onchain MicroStrategy aims to replicate this model within the decentralized finance (DeFi) ecosystem. By integrating Bitcoin reserves into DeFi, Solv seeks to unlock new yield-generating opportunities for its users.
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