From the perspective of investors, how to understand the Alpha nature of the BTCFi track?

Author: JiaYi

23,500 BTC, what level is that?

As a long-term investor who is optimistic about BTC and related tracks, I have invested in multiple BTC track projects such as Babylon, Bouncebit, Yala, Lorenzo and Solv. Especially Solv has recently released a major update, launching SAL (Staking Abstraction Layer), which has both stable rise momentum in operation and good community feedback.

Currently, 23,500 BTC have been staked on Solv, second only to MicroStrategy (252,220 BTC) and TSL (252,220 BTC), higher than Marathon, Hut 8, and other mining companies~ aside from Block.one and the already defunct Mt.Gox.

What is the main battlefield of BTCFi? Or, what problem does BTCFi want to solve? This is also a must-answer question for the BTC ecosystem. Today, I will briefly explain my understanding of the BTCFi track from an investor’s perspective.

BTC is walking the path of Decentralized Finance Summer

Experienced veterans of the initial Decentralized Finance Summer on the old chain, must be familiar with yearn.fi, the “on-chain money gun pool”.

In my opinion, for the BTC ecosystem, projects like Solv play the role of this ‘Smart Pool’. As we can all feel, whether it is traditional wrapped BTC assets like BTCB and WBTC, or new types of BTC assets like FBTC and M-BTC, they have indeed brought BTC liquidity into the on-chain scene. However, every coin has two sides, and it has also intensified the problem of fragmented BTC liquidity.

Especially for users with decision-making difficulties, in order to earn stable and higher returns, they may even need a bunch of xxBTC in their wallets. Therefore, the full-chain income and Liquidityprotocol of Solv’s multi-chain multi-asset strategy can be regarded as an ‘income aggregator’ for BTC assets.

No matter what BTCB, FBTC, MBTC, xx BTC… different on-chain BTC assets, all can be minted into SolvBTC, simplifying everyone’s asset management experience.

Of course, this also means integrating the Liquidity opportunities of different BTC assets, where SolvBTC travels across the chain, forming a unified asset pool, bringing more diversified income opportunities for holders.

BTCFi will give birth to a huge asset package ecosystem

BTC was actually quite “lonely” in the early years.

In the past few crypto market booms, whether it was the ICO boom in 2017, the ‘summer’ of Decentralized Finance in 2020, or the subsequent NFT narrative, the BTC ecosystem seems to have been marginalized, with BTC being seen as a ‘non-yielding asset’. 01928374656574839201

However, since last year, more and more projects have been trying to provide stable on-chain income for BTC, gradually turning it into an interest-bearing asset. This trend not only awakens the dormant BTC but also opens the door for BTC to enter the on-chain income market, marking a redefinition and release of the value of BTC for the entire ecosystem.

I have never invested in any ETH stake projects, I believe that BTC is more suitable for users to stake. Users holding BTC also have the strongest ability to withstand short-term Fluctuation. From the perspective of comprehensive stake income, the interest-bearing properties of BTC are more conducive to the steady rise of personal assets.

For new Web3 users, or “new suckers,” the mainstream encryption asset held in the first station is still BTC - as high as $1.35 trillion, the largest in scale, and the strongest in risk resistance encryption native asset. As long as the profit opportunities are rich and diverse, most holders are inevitably itching for this opportunity.

And Solv’s imagination is not limited to stake returns, but also includes returns from reinvestment of stake, trading strategy returns, etc. Of course, this also brings complex interactive scenarios, although it greatly expands the applicability and value of BTC assets, the risks are also increasing simultaneously.

So Solv recently launched the Solv stake Abstract Layer (SAL), which is essentially a universal standardized BTC stake industry security standard and framework, trapping a series of BTC income and asset management scenarios in a risk-isolated cage, using Smart Contract technology and BTC Mainnet technology to achieve seamless cooperation between stakers, LST issuers, stake protocols, and other stake service providers, while simplifying user interactions with the BTC stake protocol.

BTCstake ecosystem needs such a universal security layer to grow bigger and bigger, and it is also one of the most suitable choices for Solv, which has the largest scale.

Bet on the entire Chaoyang track with action

BTC with a market capitalization of over trillions of dollars, previously, people mainly released its Liquidity in the form of wrapped Tokens (such as WBTC), thereby enabling Cross-Chain Interaction to the Ethereum network, participating in on-chain scenarios such as Decentralized Finance by coupling with the EVM ecosystem, but only about tens of billions of dollars can truly be released.

The investment field is the most prone to “myths”, but in fact, the underlying logic is very realistic. Regarding Son’s investment in Alibaba, there was a so-called good story in the market that “investment can be made in six minutes”.

And the fact is that the Ma Yun team is not the first choice and the only cooperative partner of Son Masayoshi. On the same day, in the same office, including Ma Yun, nearly 10 Internet companies gathered together to wait for a meeting with Son Masayoshi and his team.

The immaturity behind it is an opportunity, betting on the entire Chaoyang track with action.

I fully agree with Franklin Bi, a partner at Pantera, on one point - if Decentralized Finance reaches the same proportion on BTC as it does on ETH, it means that the total value of Decentralized Finance applications on BTC will reach 340 billion USD (25% of BTC market capitalization), and over time, its scale may fluctuate between 108 billion USD and 680 billion USD (8% and 50%).

Actually, I also invested in Solv twice in a row, dumb buying for myself:

• The first investment was because the founder Ryan is one of the few founders I have seen who is very promising. Humble, sunny, direct, young, but every time I see him, I can see his cognitive upgrade. In the 2 years of contact, I basically saw a person’s rapid iteration. This is undoubtedly a tonic for investors;
• The second investment is because of Solv’s performance now. Especially leading Solv to achieve profitability early in the encryption market during the bull and bear market cycle, as the market changes, Solv has undergone commercial iteration or transformation, but as long as it is done, it is the first **, **The logic behind it is a profound insight and firm belief in Decentralized Finance and strong execution courage;

However, the Staking/Restaking track is facing common pressure from the Secondary Market - as more and more projects enter the Listing stage, they bring heavy selling pressure to the market in order to improve the FDV before listing. Therefore, although many projects have a good TVL and revenue structure, the coin price performance has been continuously depressed, which has also led to questioning the operation mode of some early projects and even dragged down the performance of related stake assets.

If you want to break the curse of the track, it is not an easy task to balance the performance of the coin price in the secondary market, which can make investors see the greater potential of the BTCstake ecosystem.