Written by: Chandler, Foresight News

When Bitcoin prices start with 1 again, it will undoubtedly be six figures.

Since the low point in November 2022, Bitcoin has risen by 570%, pushing its market cap close to $2 trillion, surpassing the government bond markets of countries like Spain and Brazil, and nearing the total market value of the entire UK FTSE 100 index (the top 100 companies in the UK stock market by market cap).

In this wave of new trends, one company successfully seized the opportunity, rebounding from the crisis and completing an astonishing transformation. This company is MicroStrategy.

As of January 6, MicroStrategy had 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 a 'Bitcoin shadow stock' phenomenon. In December 2022, when Bitcoin hit a low, MicroStrategy's stock price fell to a minimum of $14.16, while two years later, its stock price surged to a maximum of $473, with a market value nearing $100 billion, an increase of over 3720%, becoming a favorite among Wall Street hedge funds.

And the source of all miracles begins with Michael Saylor's decision to implement 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 funding to enhance shareholder returns.

MicroStrategy's multiple convertible bond financings

Under MicroStrategy's operational model, the increase in Bitcoin reserves will lead to a continuous rise in the company's equity per share (net asset per share). When Bitcoin prices rise, not only does the value of its reserves increase, but the funds obtained through ATM and convertible bond financing can also accelerate value appreciation.

This phenomenon is known as the 'Davis Double-Click,' where shareholder returns come from two aspects: the rise in Bitcoin prices and the effect of the company expanding its asset base through financing.

Michael Saylor once specifically stated that 'MicroStrategy = Bitcoin wealth operation + Bitcoin reserves, where wealth operation includes issuing securities, acquiring Bitcoin, adjusting leverage, fund dividends, etc.'

Unfortunately, the Bitcoin reserve model of MicroStrategy still has some limitations, namely that it has not fully utilized the dynamic yield potential brought by Bitcoin reserves.

It is against this backdrop that the emergence of the Solv protocol opens up new avenues for Bitcoin asset management, providing a more proactive solution than MicroStrategy's 'buy and hold' model, making it a more imaginative on-chain MicroStrategy.

The transformation of Bitcoin on-chain reserves: from idle assets to dynamic income generation.

Imagine if this financial leverage model could be replicated in the crypto market itself, creating a native crypto protocol similar to the 'MicroStrategy' growth flywheel, what would we need first?

First, it is essential 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 core lies in building a solid value anchor, such as Bitcoin or other crypto assets, as the foundation supporting corporate assets and capital appreciation. Secondly, a flexible capital raising and incremental capital mechanism needs to be designed, and the appreciation of this asset should drive the company's market value growth. This continuous investment and reinvestment of capital will form a sustained 'growth flywheel', thereby enhancing overall asset value and creating returns for investors. Ultimately, leveraging the innovative capabilities of the DeFi ecosystem can enhance asset liquidity and yield generation capabilities, providing impetus 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 industry. It acts as a unified liquidity gateway aimed at lowering the barriers and costs for users seeking quality investment opportunities. Users can deposit BTC into the platform to receive SolvBTC, a token generated through Bitcoin staking. SolvBTC holders can earn additional native Bitcoin yields while maintaining exposure to BTC, including market-making strategies, delta-neutral funding rate strategies, and cross-exchange arbitrage.

Compared to MicroStrategy's growth flywheel, Solv provides a unique path for capital appreciation and expansion through innovative staking mechanisms and a full-chain yield aggregation platform.

Specifically, Solv's 'flexibility' in capital raising is reflected in its staking and liquidity strategies. By transforming Bitcoin into SolvBTC, Solv achieves both the 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 provide Bitcoin with more application scenarios and appreciation pathways.

Through this mechanism, Solv essentially creates an 'incremental capital' model: as Bitcoin staking and yield strategies continue to progress, Solv can continuously expand its Bitcoin reserves and 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 is fundamentally similar to that of MicroStrategy, both relying on the reserve value of Bitcoin to drive corporate market value growth. However, by employing a decentralized approach, Solv makes capital appreciation more diversified and with higher liquidity.

In addition, according to its latest announcement, Solv is creating protocol-owned Bitcoin reserves through the launch of Bitcoin Reserve Products (BRO), and the proceeds will be used to purchase Bitcoin. The first BRO will be open to institutional buyers in the traditional finance sector (TradFi) and will be launched after the official release of the SOLV token. However, details regarding the first BRO sale, including the coupon, maturity date, and conversion premium, have not yet been disclosed.

In other words, Solv not only has the same growth flywheel as MicroStrategy but also, through staking and yield aggregation mechanisms, transforms its Bitcoin reserves into continuously growing financial assets, greatly attracting Bitcoin holders to participate in its platform's reserves and staking, forming a larger self-appreciating and capital-expanding growth flywheel.

On the other hand, if benchmarked against MicroStrategy, Solv's market value will also significantly increase with its Bitcoin reserves.

According to Defillama data, the locked Bitcoin in the Solv protocol has exceeded 33,000, with a total platform lock-up amount approaching $3.3 billion. If the amount of Bitcoin held by Solv reaches a scale similar to that of MicroStrategy, assuming it holds 400,000 Bitcoins, then based on the current price, its market value could exceed hundreds of billions of dollars, possibly approaching a trillion dollars.

Solv: On-chain MicroStrategy brings the future of on-chain digital asset management.

Solv represents a breakthrough innovation in Bitcoin on-chain reserve management, enabling retail and institutional investors to access diverse 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 homogeneous projects in the BTCFi track, 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 its introduction of a more efficient yield generation mechanism within the Bitcoin ecosystem, and further optimizing user experience and capital management through the staking abstraction layer (SAL) and full-chain yield aggregation platform. Under 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 uses its security system, Solv Guardian, to ensure the security of staking transactions. Guardian has dynamic adaptability and can optimize rules in real-time based on updates to blockchain and staking protocols, collaborating with protocol developers to establish stringent security standards and risk control systems to ensure high reliability of operations. Its unified security mechanism spans EVM smart contracts and Bitcoin mainnet transactions, providing a consistent security experience for users and developers. As a core component of SAL, Solv Guardian lays the foundation for the standardization and diversification of Bitcoin staking, expands the financial application scenarios of Bitcoin, and ensures a comprehensive balance of flexibility and security in staking services, promoting the continuous development of the staking ecosystem.

On the other hand, Solv has proposed an industry-standard Bitcoin yield product model by launching SAL to provide standardized and diversified solutions for Bitcoin staking. SAL abstracts the technical differences of different staking protocols through smart contracts, constructing a unified operational framework that supports flexible design of LSTs based on lock-up periods, yield distribution mechanisms, and liquidity characteristics, providing users with diverse yield options and significantly enhancing capital efficiency and staking flexibility. With SAL, users can apply LSTs to leverage staking, arbitrage trading, and other complex strategies while obtaining staking rewards, further optimizing asset liquidity and yields.

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 strong technical support and rich application scenarios for Bitcoin staking, comprehensively enhancing users' staking experience and capital management efficiency.

Currently, the 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 $11 million strategic funding round, bringing its total financing to $25 million, which will be used for the development of Solv's staking abstraction layer products and ecological 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 it will launch SolvProtocol (SOLV) on the Megadrop platform, with a maximum supply of 9.66 billion (to be increased by governance voting through BTC reserve fundraising plans), an initial supply of 8.4 billion, and Megadrop rewards of 588 million (accounting for 7% of the initial supply), with an initial circulation of 1.4826 billion (accounting for 17.65% of the initial supply). The official arrival of TGE will provide more capital support for Solv, accelerating its expansion in the crypto industry. The launch of the SOLV token not only provides strong funding ammunition for the project's Bitcoin reserve plan but also lays the foundation for its position in the BTCFi field, making it likely to become an on-chain MicroStrategy.