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Solv Protocol launches Bitcoin stake abstraction layer integrating on-chain liquidity
New Developments in Bitcoin Staking Protocol: Solv Protocol Introduces Staking Abstraction Layer Concept
Recently, a Bitcoin staking protocol completed a new round of financing of 11 million USD, bringing its total financing amount to 25 million USD. The protocol's staking scheduling center has gathered liquidity of over 20,000 Bitcoins, including multiple staking products.
Recently, the protocol proposed the concept of Staking Abstraction Layer (SAL), which has attracted attention in the industry. Here is an interpretation of this concept:
Although the protocol provides a large amount of Bitcoin staking assets for a certain ecosystem, its actual positioning is much broader. The two are more like a parallel relationship rather than a subordinate relationship. While the certain ecosystem uses advanced cryptographic algorithms to lock native Bitcoin assets in the direction of BTCFi, providing some security consensus for platforms like this protocol, the ecosystem itself does not generate original liquidity; its liquidity is mainly provided by platforms like this protocol.
Based on the liquidity advantage at hand, the protocol introduces a new concept of staking abstraction layer, aiming to further integrate the decentralized Bitcoin liquidity across the entire chain and provide a scalable and transparent unified solution. The goal of the staking abstraction layer is to attract Bitcoin liquidity from various scenarios such as Ethereum EVM, BNB Chain, CeDeFi, etc., to provide a unified and transparent application standard for these homogeneous or heterogeneous chain assets.
The staking abstraction layer consists of a series of smart contracts designed to simplify user interaction with the Bitcoin staking protocol, providing a more convenient staking experience. At the same time, this abstraction layer will define a set of common functions including LST asset issuance, distributed node staking validation, profit distribution, and penalty rules. This may involve multiple LST issuers, staking validators with complete asset storage qualifications, and various DeFi protocols as profit distributors.
From a commercial perspective, the protocol is attempting to solve the problem of Bitcoin liquidity being too fragmented by building a liquidity aggregation service layer to accelerate the aggregation and circulation of Bitcoin assets.
The protocol chooses to do this because of the uniqueness of the BTCFi track. The application scenarios of Bitcoin assets are very broad, ranging from DeFi wrapped versions to the original assets stored in cold wallets, and to the assets flowing into ETF funds. Establishing a unified Bitcoin asset scheduling platform involves not only on-chain operations but also requires coordinating resources from various fields, managing complex relationships, and ultimately "on-chaining" the relevant assets.
The vision of the staking abstraction layer is to allow Bitcoin scattered across different environments (on-chain, off-chain) to have a unified standard for circulation and application, thereby unleashing 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 decentralized Bitcoin staking rate and make breakthroughs in asset yield.