Solv Protocol proposes the concept of a staking abstraction layer, aiming to integrate BTC liquidity.

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

Solv Protocol recently proposed the concept of Staking Abstraction Layer (SAL), which is an innovative idea worth exploring in depth.

First of all, although there are opinions that classify Solv Protocol as part of a certain blockchain ecosystem, in fact, the positioning of Solv Protocol is much broader. As a platform with a large amount of liquidity, Solv Protocol has more of a parallel cooperative relationship with other blockchain projects. Although certain blockchain projects utilize advanced cryptographic algorithms to lock native BTC assets in the BTCFi field, providing a certain security consensus for platforms like Solv, these projects themselves do not generate original liquidity. On the contrary, the liquidity of their ecosystems is mainly provided by platforms like Solv.

Based on the liquidity advantage in hand, Solv has proposed a new concept of staking abstraction layer. This concept aims to further aggregate BTC liquidity dispersed across various chains and provide a scalable and transparent unified solution. The goal of the staking abstraction layer of the Solv Protocol is to absorb BTC liquidity from multiple scenarios, such as Ethereum EVM, BNB Chain, and CeDeFi, providing a unified and transparent application standard for these homogeneous or heterogeneous chain assets.

Specifically, the SAL stake abstraction layer consists of a series of smart contracts designed to simplify user interaction with the Bitcoin stake protocol, providing a more convenient staking experience. At the same time, this abstraction layer will define a complete set of functionalities, including LST asset issuance, distributed node stake validation, yield distribution, and penalty rules. This design will allow different participants to play roles in their respective areas of expertise, such as LST issuance, stake validation, and yield distribution.

From a business perspective, Solv has identified the issue of Bitcoin liquidity being overly fragmented and aims to accelerate the aggregation and application circulation of BTC assets by building a liquidity aggregation service layer. This strategy is not only intended to expand the BTC liquidity pool but also to address the uniqueness of the BTCFi track. Given the extremely wide range of use cases for BTC assets, from DeFi wrapped versions to the original assets stored in cold wallets, and assets flowing into various investment funds, constructing a unified Bitcoin asset scheduling platform is a complex task that requires coordinating resources from different fields and managing various relationships.

The Staking Abstraction Layer of Solv aims to provide a unified liquidity and application standard for BTC that is dispersed across different environments (on-chain and off-chain), thereby unlocking the potential and value of BTCFi. Considering that the staking rate of ETH on the highly developed Ethereum network remains around 28%, it is clear that there is still a long way to go to significantly increase the staking rate of dispersed BTC and fully realize its potential in asset appreciation.