Solv brings RWA Bitcoin yield to Avalanche
Solv Protocol has released a new token on the Avalanche blockchain designed to generate yield from Bitcoin holdings. This token aims to increase institutional investor access to yield opportunities tied to real-world assets.
The token, introduced on May 16, connects Bitcoin to assets like US Treasurys and private credit. These assets are provided by major financial firms, including BlackRock and Hamilton Lane. The development involved a collaboration among seven different entities: Solv, Avalanche, Balancer, Elixir, Euler, Re7 Labs, and LFJ.
The purpose of this token is to link Bitcoin to real-world economic cycles through assets that do not typically correlate with Bitcoin’s own price movements, offering an alternative to Bitcoin’s historical market cycles.
Yield is generated using a strategy involving multiple protocols. This includes using Elixir’s deUSD, a synthetic dollar. The Treasurys from BlackRock and Hamilton Lane are brought into the process via Elixir and integrated onto the Euler lending platform to boost exposure to real-world assets. The yield earned is paid out in Bitcoin.
Solv is a platform focused on Bitcoin staking, providing yield strategies across various blockchains and decentralized finance platforms. Data indicates the protocol manages over $2.3 billion in total value locked.
Demand for ways to earn yield on Bitcoin has been increasing, partly due to rising institutional adoption of digital assets. Earlier this month, the crypto exchange Coinbase launched a Bitcoin Yield Fund. This fund seeks to provide annual returns of 4% to 8% on Bitcoin investments. The yield in this fund is generated through a strategy that involves buying Bitcoin on the spot market and simultaneously selling a related futures contract.
Observation suggests growing investor interest in Bitcoin not just as a store of value but also as a means to generate returns. While various methods exist to earn yield from Bitcoin, such as using derivatives or yield farming, one company, MicroStrategy, has introduced its own measure, called “BTC Yield,” to track the performance of its investment approach. This metric measures the amount of additional Bitcoin acquired relative to the company’s outstanding shares and was recently reported at 15.5% year-to-date.
