Solv Protocol Launches Staking Abstraction Layer Aimed at Integrating Multi-Chain BTC Liquidity

The Bitcoin staking protocol Solv Protocol recently completed a new round of funding of $11 million, bringing its total funding amount to $25 million. The protocol's staking scheduling center has gathered liquidity of over 20,000 BTC, including various forms such as SolvBTC.BBN, SolvBTC.ENA, and SolvBTC.CORE.

Recently, Solv proposed the concept of Staking Abstraction Layer (SAL), which has attracted attention in the industry. This concept aims to address the issue of dispersed liquidity in Bitcoin by building a liquidity aggregation service layer to accelerate the gathering and application circulation of BTC assets.

Some opinions classify the Solv Protocol as part of a certain ecosystem, arguing that Solv provides a large amount of BTC staking assets for that system. However, the actual positioning of the Solv Protocol is much broader. While a certain system utilizes cryptographic algorithms to lock native BTC assets in the BTCFi domain, providing a certain level of security consensus for platforms like Solv, it is Solv that serves as the actual liquidity provider. The Solv Protocol can be viewed as a liquidity provision platform within the Bitcoin ecosystem, while the certain system is similar to a Bitcoin version of staking infrastructure. The relationship between the two is one of mutual cooperation and benefit.

The staking abstraction layer concept proposed by Solv aims to further aggregate the decentralized BTC liquidity across the entire chain, providing a scalable and transparent unified solution. Its goal is to absorb BTC liquidity from multiple scenarios such as Ethereum EVM, BNB Chain, and CeDeFi, offering unified and transparent application standards for these homogenous or heterogeneous chain assets. Unlike platforms that only absorb native BTC liquidity, Solv can integrate various liquidity related to BTC assets and facilitate unified scheduling through the platform.

Specifically, SAL is composed of a series of smart contracts designed to simplify user interaction with Bitcoin stake agreements, providing a convenient staking experience. At the same time, it defines a comprehensive set of general functions including LST asset issuance, distributed node stake validation, profit distribution, and penalty rules. This design allows for a diverse range of participants to join the ecosystem, including different LST issuers, stake validators, and profit distributors.

From a business perspective, Solv has identified the pain point of Bitcoin's liquidity being overly dispersed and is attempting to accelerate the aggregation and application circulation of BTC assets by building a liquidity aggregation service layer. This initiative is not limited to on-chain operations but also requires the coordination of resources across various domains to handle complex relationships, ultimately achieving the "on-chain" of related assets.

The vision of Solv is to enable BTC, which is dispersed across different environments (on-chain and off-chain), to have a unified standard for circulation and application, thus unlocking the potential and value of BTCFi. Considering that the staking rate of ETH on Ethereum is only 28%, there is still a long way to go to significantly increase the staking rate of decentralized BTC and achieve breakthroughs in asset yield.