Who will be the first to venture into the "starry sea" of on-chain Asset Management?

Written by: Chandler, Foresight News

When the price of Bitcoin starts with the number 1 again, it will already have reached six figures.

Since the low point in November 2022, Bitcoin has risen by 570%, pushing its Market Cap close to 2 trillion USD, surpassing the government Bond markets of countries like Spain and Brazil, and approaching the total Market Cap of the entire UK FTSE100 Index (the top 100 companies by market value in the UK stock market).

Amid this wave of new trends, one company successfully seized the opportunity, rebounding from crisis and completing a remarkable transformation. This company is MicroStrategy.

As of January 6, MicroStrategy has 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 formed a phenomenon known as the "Bitcoin shadow stock." In December 2022, when Bitcoin fell to a low, MicroStrategy's stock price dropped to as low as 14.16 USD, whereas today, two years later, its stock price has risen to a maximum of 473 USD, with a Market Cap nearing 100 billion USD, an increase of over 3720%, becoming a favorite among Wall Street hedge funds.

The source of all these miracles can be traced back to Michael Saylor's decision to pursue 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 both the traditional and cryptocurrency markets, amplifying the growth rate of corporate Assets through external funding and increasing Shareholder returns.

MicroStrategy's multiple Convertible Bonds financings

Under MicroStrategy's operation model, the increase in Bitcoin reserves continuously raises the company's equity per share (net asset per share). When the price of Bitcoin rises, not only does the value of its reserves increase, but the funds obtained through ATM and Convertible Bonds financing can also accelerate appreciation.

This phenomenon is referred to as the 'Davis Double-Click', which means Shareholder returns come from two aspects: first, the rise in Bitcoin prices, and second, the effect of the company expanding its Asset scale through financing methods.

Michael Saylor specifically stated, 'MicroStrategy = Bitcoin Wealth Operation + Bitcoin Reserves, where wealth operation includes issuing securities, acquiring Bitcoin, adjusting leverage, and Fund dividends.'

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

Against this backdrop, the emergence of the Solv Protocol has opened new avenues for Bitcoin Asset Management, providing a more proactive solution than MicroStrategy's 'Buy and Hold' model, becoming a more imaginative on-chain MicroStrategy.

Transformation of Bitcoin's on-chain reserves: from idle assets to dynamic earnings.

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

First, it is necessary to understand the 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 cryptocurrency market, the core lies in building a solid value anchor, such as Bitcoin or other crypto assets, to support the foundation of enterprise assets and capital appreciation. Next, a flexible funding and incremental capital mechanism should be designed, which drives the company's Market Cap growth through the appreciation of these assets. The continuous input of capital and reinvestment of the appreciated value will form a sustained 'growth flywheel,' thereby enhancing the overall asset value and creating returns for investors. Ultimately, leveraging the innovative capabilities of the DeFi ecosystem can enhance asset liquidity and yield generation ability, providing momentum for market expansion and financialization.

The Solv Protocol is a native yield platform supported by a decentralized Asset Management infrastructure, dedicated to tokenizing and aggregating high-quality yields across the industry. It acts as a unified liquidity gateway aimed at reducing the barriers and costs for users seeking high-quality investment opportunities. Users can obtain SolvBTC by depositing BTC into the platform, which is a token generated by staking Bitcoin. SolvBTC holders can gain additional native BTC earnings 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 its innovative staking mechanisms and full-chain yield aggregation platform.

Specifically, the 'flexibility' of Solv in fundraising is reflected in its staking and liquidity strategies. Solv achieves the appreciation of Bitcoin by converting it into SolvBTC, while also providing multiple yield generation mechanisms. This dynamic 'Buy and Stake' strategy model is more flexible compared to MicroStrategy's 'Buy and Hold,' and can provide more application scenarios and appreciation pathways for Bitcoin.

Through this mechanism, Solv essentially creates a model of "incremental capital": as Bitcoin staking and yield strategies continue to advance, Solv can continuously expand its Bitcoin reserves and increase the capital value of its platform and the ongoing appeal of its ecosystem through a dynamic yield generation mechanism. This means that in the management of Bitcoin as a reserve asset, Solv's strategy is fundamentally similar to MicroStrategy's, both relying on the reserve value of Bitcoin to drive the growth of the company's Market Cap. However, through a decentralized approach, the appreciation of capital becomes more diversified and has higher liquidity.

In addition, according to its latest announcement, Solv is creating a Bitcoin Reserve Product (BRO) through which the protocol will own Bitcoin reserves, and the funds will be used to purchase Bitcoin. The first BRO will be opened to institutional buyers in the traditional financial sector (TradFi) and will be launched after the official release of the SOLV token. However, detailed information regarding the first BRO sale, including coupon, maturity date, and conversion premium, has yet to be announced.

In other words, Solv not only gains the same growth flywheel as MicroStrategy, but also converts its Bitcoin reserves into a continuously growing financial asset through staking and yield aggregation mechanisms, 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, when compared to MicroStrategy, Solv's Market Cap will also grow significantly as its Bitcoin reserves increase.

According to Defillama data, the Bitcoin locked in Solv protocol has exceeded 33,000 coins, with the total locked in the platform nearing 3.3 billion USD. If the amount of Bitcoin held by Solv reaches a scale similar to MicroStrategy’s, assuming it holds 0.4 million Bitcoins, then calculated at current prices, its Market Cap could exceed several billion USD, even approaching 100 billion USD.

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

Solv represents a breakthrough innovation in Bitcoin on-chain reserve management, enabling retail and institutional investors to obtain diversified yield opportunities without sacrificing liquidity through staking abstraction layers (SAL), SolvBTC and SolvBTC.LST (liquid staking tokens), thereby seamlessly integrating Bitcoin into the DeFi ecosystem.

At the same time, compared to other homogenous projects in the BTCFi track, this project also demonstrates some unique advantages, particularly in innovative liquidity integration and Asset Management.

Compared to other projects, Solv's key advantage lies in its introduction of a more efficient revenue generation mechanism within the Bitcoin ecosystem, along with an optimized user experience and funds management through the Staking Abstraction Layer (SAL) and a 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 employs its security system Solv Guardian to ensure the security of staking transactions. Guardian possesses dynamic adaptability, capable of real-time optimizing rules based on updates from the Blockchain and staking protocol, collaborating with protocol developers to establish strict security standards and risk control systems, ensuring a high level of reliability in operations. Its unified security mechanism spans EVM Asia Vets and Bitcoin mainnet transactions, providing users and developers with a consistent security experience. As the core component of SAL, Solv Guardian lays the foundation for the standardization and diversification of Bitcoin staking, expanding the financial application scenarios of Bitcoin while ensuring a comprehensive balance between 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, providing standardized and diversified solutions for Bitcoin staking through the launch of SAL. SAL abstracts the technical differences of various staking protocols via smart contracts, constructing a unified operational framework that supports flexible design of LSTs based on lock-up periods, yield distribution mechanisms, and liquidity characteristics, offering users diverse yield options and significantly enhancing capital efficiency and staking flexibility. With SAL, users can utilize LSTs for leveraged staking, arbitrage trading, and other complex strategies while earning staking returns, further achieving asset liquidity and yield optimization.

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, 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 multiple security auditing firms including Quantstamp, Certik, SlowMist, Salus, and Secbit. Recently, Solv announced the completion of a strategic round of financing amounting to 11 million USD, bringing its total financing amount to 25 million USD, which will be used for the development of Solv's Staking Abstraction Layer products and ecological expansion.

Overall, Solv Protocol is gradually shaping itself into the 'MicroStrategy 2.0' image 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. The maximum supply of SOLV is 9.66 billion coins (increased by governance voting decision through BTC reserve fundraising plan), with an initial supply of 8.4 billion coins. The Megadrop reward is 0.588 billion coins (accounting for 7% of the initial supply), and the initial circulating supply is 1.4826 billion coins (accounting for 17.65% of the initial supply). The formal arrival of TGE will provide Solv with more capital support and accelerate its expansion in the crypto industry. The launch of the SOLV token not only provides strong financial ammunition for the project's Bitcoin reserve plan but also lays the foundation for its position in the BTCFi space, making it likely to become an on-chain MicroStrategy.