Solv Protocol Launches Structured Yield Vault for Institutional Bitcoin Investors

BITCOIN-focused staking platform Solv Protocol has launched a structured yield vault targeting institutional investors holding vast amounts of idle BTC.

Product Details

Named BTC+, the new vault aggregates capital from institutional investors and deploys it across various yield strategies spanning DeFi, CeFi, and traditional finance (TradFi) markets.

Key strategies include protocol staking, basis arbitrage, and yields from tokenized real-world assets (RWA) like BlackRock’s BUIDL fund.

The vault incorporates Chainlink’s Proof-of-Reserves protocol for on-chain verification and drawdown safeguards linked to net asset value (NAV), a standard risk management feature in private equity.

Solv emphasized a “dual-layer architecture” that separates custody functions from yield generation, further enhancing security.

CEO Remarks

“Bitcoin is one of the world’s most powerful forms of collateral, but its yield potential has remained underutilized,” stated Ryan Chow, Solv’s co-founder.

According to DefiLlama data cited by Solv, the protocol already holds over $2 billion in total value locked (TVL) on-chain.

Solv Protocol TVL on DefiLlama. Source: DefiLlama — Solv Protocol TVL. Source: DefiLlama

Competitive Landscape

Solv is not alone in targeting the growing Bitcoin yield market.

In April, trading platform Coinbase launched a dedicated Bitcoin yield fund for institutional clients outside the US, offering up to 8% returns via a cash-and-carry strategy.

Crypto investment firm XBTO has partnered with Arab Bank Switzerland, offering returns by selling BTC options. This product aims for approximately 5% annualized returns.

Broad Bitcoin Financialization Trend

Bitcoin’s financialization is accelerating as it becomes an institutional asset class, according to industry observers.

Following the SEC’s approval of spot Bitcoin ETFs in January 2024, institutional adoption surged. Bitcoin’s price climbed over 156% since then, pushing its market cap to near $2.5 trillion.

This growth has prompted institutions like JPMorgan to consider accepting Bitcoin ETFs as loan collateral.

Federal regulators have also weighed in; the US Federal Housing Finance Agency recently directed Fannie Mae and Freddie Mac to consider integrating Bitcoin and other crypto assets into mortgage risk assessments.

Predicting this trend, CoinShares analyst Satish Patel noted that yield generation would become a priority as institutional Bitcoin holdings increased.

Business intelligence company STRAT also introduced a “BTC Yield” metric to measure Bitcoin’s contribution to shareholder value, while crypto miner MARA Holdings increased its Bitcoin allocation through investment adviser Two Prime.