Unified "Measurement and Weights"? Solv stake abstract layer provides a new interpretation of BTCFi "standardization"

From a certain perspective, the $1.75 trillion scale of BTC ( as of November 12, 2024, is the largest "sleeping fund pool" in the crypto world.

Unfortunately, most of the time it has neither brought returns to holders nor injected vitality into the on-chain financial ecosystem. Although there have been many attempts to release the liquidity of Bitcoin assets since the DeFi Summer in 2020, most of them are merely reinventing the wheel, and the inflow of BTC funds is quite limited, failing to truly leverage the BTCFi market.

So where is the main battlefield of BTCFi? In other words, what problems need to be solved first for Bitcoin staking? This is an answer worth at least tens of billions of dollars, and it is a question that the Bitcoin ecosystem, especially staking projects, must answer.

As the current leader in the Bitcoin staking field, Solv has proposed a forward-looking solution, the core of which lies in the concept of "standardization" of the SAL) Staking Abstraction Layer(.

![Unified "Measurement and Weights"? The staking abstraction layer provided by Solv offers a "standardized" new interpretation of BTCFi])https://img-cdn.gateio.im/webp-social/moments-26a5fd0ded6f71c0df9b5d4ddfb5344c.webp(

Trapped in the "Liquidity Fragmentation" of Bitcoin

We can first review the development history of the Ethereum staking ecosystem.

As of November 12, 2024, the total amount of ETH staked in Ethereum exceeds 34.55 million ETH. Data shows that the proportion of staked ETH to the total supply has surged from 15% in April 2023 to about 29%, nearly doubling, with a total scale surpassing 100 billion dollars.

At the same time, the Bitcoin ecosystem, which has risen alongside the Ordinals wave, has a staking penetration rate that is far lower than that of Ethereum. Even though the market value and price increase of BTC have surpassed ETH, it still cannot keep up with the expansion speed of the Ethereum Staking ecosystem.

It is worth noting that if the liquidity of BTC can be released by 10%, it will create a market of $175 billion. If it can reach a staking rate similar to ETH, it will release about $500 billion in liquidity, propelling BTCFi to become a super on-chain ecosystem far exceeding EVM networks.

To some extent, the outstanding performance of the Ethereum Staking ecosystem, in addition to its programmability advantages, is also attributed to the Ethereum Foundation leading the establishment of a clear and complete set of standards for ETH staking at the protocol level. This includes a staking threshold of 32 ETH, a penalty mechanism, and comprehensive considerations of hardware and network costs, fully covering the financial requirements of ordinary users to the economic security of node operation.

It is precisely this unified standardized framework design that not only enhances the decentralization and security of the network but also lowers the barriers to development and participation, prompting projects like Lido Finance, Rocket Pool, and Frax Finance to rise quickly and driving the Ethereum Staking ecosystem to achieve rapid scaling and diverse exponential growth in a short period of time.

In contrast, the Bitcoin ecosystem has "no founders" and "no centralized promoting organization," creating its uniquely extreme decentralization "chain sentiment." This is both a unique advantage of the Bitcoin ecosystem and, to some extent, has become a "development shackle:"

This completely decentralized structure means that the establishment of key technological standards, such as the staking mechanism, lacks a leader that can play the role of the "Ethereum Foundation". It requires a broad consensus among global developers and node operators to implement, and this process is often long and complex.

Therefore, a complete set of clear standardized frameworks in the Ethereum ecosystem has laid a solid foundation for the rapid growth of its staking and liquidity ecosystem. For BTCFi to achieve similar progress, it must introduce comparable standardized mechanisms in the staking field to address various challenges related to liquidity and asset management.

Especially in the current context where the liquidity of Bitcoin assets is accelerating fragmentation, the need for unification has become particularly urgent:

On one hand, when BTC is bridged to EVM-compatible networks such as Ethereum in the form of wrapped assets like WBTC and cbBTC, it provides users with opportunities to participate in DeFi and earn yields. However, this also leads to further dispersion of BTC liquidity across different chains, creating "liquidity islands" that are difficult to circulate and utilize freely, greatly limiting the development potential of BTCFi. ), including WBTC, has recently attracted community attention due to custodial risks, making decentralization and standardization imperative. (;

On the other hand, with the launch of Bitcoin ETFs and the further strengthening of global asset consensus, Bitcoin is accelerating its expansion into CeFi and CeDeFi, with more and more BTC flowing into institutional custody services, forming large pools of stagnant capital.

Data shows that the currently yield-generating Bitcoin has been distributed across 95 chains, 448 protocols, and 766 liquidity pools. However, due to the lack of a unified staking standard and cross-chain liquidity mechanisms, the BTC assets across chains, platforms, and institutions not only have high friction costs for usage, but the dispersed liquidity also cannot be efficiently integrated and utilized.

In this context, BTCFi and the Bitcoin staking ecosystem need to continue to expand in scale, urgently requiring the establishment of a universal and standardized industry safety standard and framework to efficiently integrate the liquidity resources of Bitcoin that are dispersed across multiple chains and platforms.

Therefore, BTCFi and the Bitcoin ecosystem currently need a leading role that can dominate these standardization processes, allowing the integration of cross-chain Bitcoin liquidity to reach a consensus, establish a unified technical framework and standards, thereby bringing broader applicability, liquidity, and scalability to the Bitcoin stake market, further promoting the financialization process of staked assets, and driving the maturity of the BTCFi ecosystem.

![Unified "Measurement and Weights"? The Solv staking abstraction layer provides a new interpretation of BTCFi "Standardization"])https://img-cdn.gateio.im/webp-social/moments-51a126aabc048ae5a71d9460910d7482.webp(

Solv: The Elephant in the Room of Bitcoin Stake

As the largest Bitcoin staking platform in the current market, Solv has quickly seized the opportunity in the Bitcoin staking field over the past six months. Since April of this year, it has attracted over 25,000 Bitcoins ) including BTCB, FBTC, WBTC, accumulating over $2 billion in asset management scale.

More than 70% of SolvBTC has been invested in various staking scenarios, making Solv the protocol with the highest TVL and capital utilization efficiency in the current Bitcoin space.

Master the most powerful liquidity and market penetration, Solv has taken the lead in proposing Staking Abstraction Layer ( SAL ) staking abstraction layer's new narrative, aimed at aggregating the decentralized BTC liquidity across the entire chain, providing a scalable and transparent unified solution.

To achieve this goal, Solv first conducted a systematic analysis of the Bitcoin stake ecosystem, categorizing the core participants into four key roles, from bottom to top respectively:

• Staking Agreement: A protocol that allows users to deposit Bitcoin assets and generate收益 through staking activities, such as Babylon, CoreDao, Botanix, etc;

• Staking Validators: Entities responsible for verifying the integrity of the staking and transaction processes, ensuring that LST issuers genuinely execute staking and preventing errors or fraudulent activities, such as Ceffu, Cobo, Fireblocks, and Solv Guard.

• Yield Distributors: Entities responsible for the efficient and fair distribution of staking rewards, such as Pendle, Gauntlet, Antalpha, and most LST issuers also play the role of yield distributors;

• LST issuer: A protocol that converts users' staked BTC assets into liquidity tokens (LST), allowing stakers to earn returns while maintaining control over the liquidity of their assets, such as Solv, BedRock, etc.

These four roles complement each other and form the core structure of the Bitcoin stake ecosystem - the staking protocol serves as the underlying foundation of the entire system, managing and supporting all other roles; staking validators operate above the protocol, maintaining on-chain security; yield distributors allocate profits according to the protocol rules, ensuring the incentive mechanism of the system operates; LST issuers provide liquidity to staked assets through tokenization.

Therefore, the design of SAL is closely centered around these roles, launching key modules that cover the entire process, including LST generation services, stake validation services, transaction generation services, and profit distribution services, efficiently integrating them using smart contract technology and Bitcoin mainnet technology.

Specifically, SAL includes the following five core modules:

• Stake parameter matrix (SPM): Core parameters required for the abstract staking process, including Bitcoin script configuration, staking transaction parameters, LST contract parameters, and profit distribution rules. These parameters are not only shared among various modules in SAL but also support cross-role collaboration in the staking process;

• Staking verification service: Based on the Bitcoin mainnet algorithm, it ensures the correctness and integrity of each staking transaction, while verifying whether the issuance of LST matches the underlying BTC quantity, to prevent malicious activities;

• LST Generation Service: Responsible for the issuance and redemption of BTC LST, while supporting interactions between the Bitcoin mainnet and EVM chains.

• Transaction Generation Service: Automatically generate stake transactions, estimate the best transaction fees, and broadcast the transactions to the Bitcoin mainnet;

• Profit distribution service: transparently calculate stake earnings, and proportionally distribute earnings to users through oracle mechanisms or earnings exchange services.

Through these modules, SAL not only effectively integrates the technical differences of various protocols within the Bitcoin ecosystem, but also provides a clear operational framework for different roles, constructing a new system of efficient collaboration:

• For staking users: SAL provides a convenient and secure staking process, reducing asset risks caused by operational errors and lack of transparency in protocols.

• For the staking protocol: The standardized interface of SAL allows for quick integration into the Bitcoin staking market, shortening the development cycle and achieving an ecological cold start;

• For LST issuers: SAL provides comprehensive yield calculation and verification tools, enhancing user trust while simplifying the issuance process, allowing them to focus on product innovation;

• For custodians: SAL has opened a new business model for participating in the Bitcoin stake ecosystem, bringing additional revenue opportunities to custodians.

This greatly simplifies the participation threshold in the Bitcoin stake ecosystem, providing a unified solution that can effectively meet the needs of multiple parties for co-construction and sharing.

As of now, multiple protocols and service providers have joined the SAL protocol ecosystem, including a certain chain, a certain protocol, a certain oracle, and a certain financial protocol. This not only demonstrates the wide applicability of SAL but also brings richer application scenarios for Bitcoin staking, accelerating the sustainable development of business models in this field.

Activate the Diversified Yield Ecosystem of Bitcoin Stake

A certain data platform shows that in the Ethereum LSD track, a certain protocol holds the first position with a market share of 68.53% and 1,981,000 ETH, despite long-standing concerns about its centralization. However, it is undeniable that this protocol, through the innovative design of LST, has promoted the deep integration of staked assets and the DeFi yield ecosystem, significantly enhancing the utilization efficiency of staked assets.

Bitcoin staking also requires a foundational framework that promotes the efficient use of assets, and the SAL( Staking Abstraction Layer) has been launched for this purpose: it not only lowers the participation threshold for all parties, providing a consistent user experience for the Bitcoin staking ecosystem, but also significantly enhances capital utilization efficiency through a unified liquidity management mechanism, allowing Bitcoin assets to flow freely between different chains, laying the foundation for various financial innovations in the DeFi ecosystem.

Therefore, a more promising imaginative space is that SAL can essentially derive a set of diversified yield solutions based on the entire chain of BTC, allowing Bitcoin holders to obtain diversified and dynamic yield flows without affecting liquidity, opening up new development space for BTCFi( Bitcoin financialization).

The main focus is on the cross-chain functionality based on SAL, which supports users in unlocking various income-generating opportunities, transforming Bitcoin from a passive store of value into an income-generating & productive asset, allowing participation in DeFi and other on-chain use cases, creating new value:

1. Users can stake Bitcoin on platforms that benefit from the security of the Bitcoin economy ( such as certain protocols.