The Road to "Standardization" in the Bitcoin Staking Field: Innovative Attempt of Solv Staking Abstraction Layer

Bitcoin, as a $1.75 trillion asset, has long been the largest "sleeping pool of funds" in the crypto world. Although many projects have attempted to release the liquidity of Bitcoin, most are just reinventing the wheel and have not truly leveraged the BTCFi market.

So where is the main battlefield for BTCFi? What problems does Bitcoin staking need to solve? This is a hundred billion dollar question and a question that the Bitcoin ecosystem, especially staking projects, must answer. As a leader in the Bitcoin Staking field, Solv has proposed a forward-looking solution, the core of which is the "standardization" concept of SAL( Staking Abstraction Layer).

The "liquidity fragmentation" dilemma faced by Bitcoin

Compared to Ethereum, the Bitcoin ecosystem lacks centralized organizations like the Ethereum Foundation to drive development. This decentralized structure means that the establishment of key technical standards, such as the staking mechanism, requires broad consensus among global developers and node operators, a process that is often lengthy and complex.

Currently, the liquidity of Bitcoin assets is accelerating fragmentation:

• BTC is bridged to other networks in various wrapped forms, forming "liquidity islands" that are difficult to circulate freely and utilize efficiently.
• With the launch of the Bitcoin ETF, more and more BTC is flowing into institutional custody services, forming a massive pool of stagnant funds.

According to the data, the currently yield-generating Bitcoin is distributed across 95 chains, 448 protocols, and 766 liquidity pools. The lack of unified staking standards and cross-chain liquidity mechanisms has resulted in high costs of using BTC assets across chains, platforms, and institutions, and the fragmented liquidity cannot be efficiently integrated and utilized.

Therefore, the BTCFi and Bitcoin staking ecosystem urgently needs to establish a universal and standardized industry security standard and framework to efficiently integrate the Bitcoin liquidity resources scattered across multiple chains and platforms. This requires a leading role capable of dominating the standardization process and promoting the formation of a consensus on cross-chain Bitcoin liquidity integration.

Solv: An Innovator in the Bitcoin Staking Field

As the largest Bitcoin staking platform currently, Solv has attracted over 25,000 Bitcoins since April of this year, accumulating more than $2 billion in assets under management. Over 70% of SolvBTC has been allocated to various staking scenarios, making Solv the protocol with the highest TVL and capital utilization efficiency in the Bitcoin space.

Solv proposed the concept of Staking Abstraction Layer ( SAL ), aiming to aggregate the decentralized BTC liquidity across the entire chain and provide a scalable and transparent unified solution.

SAL divides the core participants of the Bitcoin staking ecosystem into four key roles:

1. Staking Agreement: Allows users to deposit Bitcoin and generate income through staking activities.
2. Staking Validators: Responsible for verifying the integrity of the staking and transaction process.
3. Revenue Distributor: Manages the distribution of staking rewards.
4. LST issuer: Convert users' Bitcoin stake assets into a liquid token (LST).

SAL has designed key modules covering the entire process around these roles, including LST generation service, stake verification service, transaction generation service, and profit distribution service.

Specifically, SAL includes five core modules:

• Stake parameter matrix ( SPM ): Core parameters required for the abstract staking process.
• Stake verification service: ensure the accuracy and completeness of each stake transaction.
• LST Generation Service: Responsible for the issuance and redemption of BTC LST
• Transaction Generation Service: Automatically generate stake transactions and broadcast to the Bitcoin mainnet
• Profit distribution service: transparent calculation and distribution of stake earnings

These modules not only integrate the technical differences of various protocols within the Bitcoin ecosystem but also provide a clear operational framework for different roles, building a new system for efficient collaboration.

Currently, multiple protocols and service providers have joined the SAL protocol ecosystem, including BNB Chain, Babylon, ChainLink, Ethena, CoreDAO, etc., proving the wide applicability of SAL.

Revitalizing the Diversified Yield Ecosystem of Bitcoin Staking

SAL brings a diversified yield solution based on full-chain BTC for Bitcoin staking, allowing Bitcoin holders to obtain diversified and dynamic income streams without affecting liquidity.

1. Achieve Bitcoin staking rewards through Restaking: Users can stake Bitcoin on platforms that benefit from the economic security of Bitcoin, earning local token rewards.

2. Earn rewards through validator nodes: Users can participate in the security maintenance of the Layer 2 network by running validator nodes or delegating Bitcoin to earn validator rewards.

3. "Delta neutral" trading yield strategies: Bitcoin holders can obtain stable returns by hedging against market fluctuations.

4. DeFi yields in various scenario use cases: Based on SAL linked to the smart contract public chain, providing scenarios such as DEX, lending, LSD, etc., to obtain diversified DeFi yields.

This fourfold return stacking has created a diversified source of income for Bitcoin holders who were originally in a zero-interest income position, while also improving capital efficiency.

Conclusion

The solution of Solv SAL can be regarded as the "infrastructure project" of the Bitcoin ecosystem, expected to grant a unified framework to the Bitcoin staking ecosystem and activate this high-quality crypto asset worth trillions of dollars. By providing a standardized framework and co-built shared solutions, SAL has brought tangible benefits to ordinary users and various service providers, greatly enhancing ecological collaboration efficiency.

This innovation is expected to trigger a chain reaction in the Bitcoin market, paving the way for the large-scale application of BTC staking services and promoting the maturity of the BTCFi ecosystem.