Introduction

Background

Bitcoin, the world’s most valuable digital asset, has become a cornerstone of decentralized finance (DeFi). As Bitcoin’s influence continues to grow, so does the demand for using Bitcoin across multiple blockchain ecosystems. However, Bitcoin’s native infrastructure wasn’t originally built to support the rapid, flexible transactions required for DeFi. To bridge this gap, the crypto space has seen the rise of wrapped Bitcoin assets, which allow Bitcoin to interact across different blockchain networks.

The Rise of Wrapped Bitcoin in DeFi

Wrapped Bitcoin assets emerged to address Bitcoin’s inability to interact natively with other blockchains. Wrapped Bitcoin (WBTC), for instance, locks Bitcoin on the original Bitcoin blockchain and issues an equivalent token (WBTC) on other networks like Ethereum. This model allows Bitcoin holders to use their BTC for lending, borrowing, trading, and yield generation on platforms like Aave, Uniswap, and Curve, while still maintaining exposure to Bitcoin's value.

However, wrapped Bitcoin solutions vary significantly in terms of how they manage custody, liquidity, and security. Some are custodial, relying on trusted entities, while others aim for more decentralized, trust-minimized solutions. These variations impact the ease of use, risk exposure, and liquidity available across DeFi ecosystems.

Not All Wrapped BTC is the Same

Different wrapped Bitcoin assets serve specific needs but come with trade-offs in terms of security, liquidity, and trust. Some examples:

• WBTC (Wrapped Bitcoin): Managed by BitGo, WBTC offers high liquidity but is centralized and relies on trusted custodians to manage reserves.

• BTCB (Binance Bitcoin): Issued by Binance, BTCB functions similarly, providing liquidity primarily on Binance Chain, but also centralized.

• tBTC and dlcBTC: These decentralized alternatives reduce custodial risk by eliminating third-party intermediaries. However, their liquidity is typically lower than that of centralized solutions, and they can be more complex for users.

• BTC.b (Avalanche) and M-BTC (Merlin): These ecosystem-specific solutions offer better integration within their respective blockchains but are siloed, making it harder for liquidity to move freely across different platforms.

This diversity in wrapped Bitcoin assets results in fragmented liquidity and introduces challenges for users who want to maximize their Bitcoin’s utility across various DeFi protocols.

The Challenges of Fragmented Bitcoin Liquidity

The rise of various wrapped BTC assets has fragmented Bitcoin liquidity across multiple chains. As different ecosystems adopt their own versions of wrapped Bitcoin, liquidity becomes siloed, making it difficult for Bitcoin to move seamlessly across chains. This can lead to inefficiencies, increased risks, and limitations in how Bitcoin can be utilized in DeFi.

For example, if liquidity is trapped on one chain, users may face high slippage or liquidity shortages when attempting to move Bitcoin between platforms. Moreover, different wrapped BTC assets may be exposed to varying degrees of risk, depending on their custodial model and the overall stability of the underlying chain.

One of the major issues with current wrapped BTC solutions is the fragmentation of Bitcoin liquidity. Each blockchain may use its own version of wrapped BTC, such as BTC.b on Avalanche or M-BTC on Merlin, which restricts liquidity to their respective ecosystems. This leads to:

• Siloed liquidity: Bitcoin locked on one chain (e.g., Ethereum) is not easily transferable or usable on other chains like Binance Smart Chain or Solana.

• Slippage and inefficiencies: Moving Bitcoin between chains often involves high costs, slippage, and liquidity shortages, particularly in times of high demand.

• Increased risk: Users must also contend with varying levels of trust and security depending on the specific wrapped BTC model, leading to potential exposure to custodial risk or smart contract vulnerabilities.

Solv: A Bitcoin Reserve for Everyone

Solv is built to address these issues by unifying Bitcoin liquidity across multiple chains, serving as a universal Bitcoin reserve for DeFi users. It offers a flexible, yield-generating solution for Bitcoin holders who want to move their assets across blockchain ecosystems without dealing with fragmented liquidity or the risks tied to individual wrapped BTC assets.

With Solv, Bitcoin holders can:

• Freely move their assets between blockchains such as Ethereum, BNB Chain, Avalanche, Arbitrum, Base, BOB, Mantle, and Merlin.

• Participate seamlessly in DeFi ecosystems across chains.

• Access liquidity and yield generation on multiple platforms without worrying about inefficiencies or high transaction costs.

Through partnerships with Chainlink’s Cross-Chain Interoperability Protocol (CCIP) and Free.tech, Solv ensures secure, efficient cross-chain transactions, allowing users to benefit from smooth liquidity flow and low fees.

Introduction

Solv is a universal Bitcoin reserve token, designed to unlock the full potential of over $1 trillion in Bitcoin assets. Each Solv token is 1:1 pegged to native BTC, ensuring it retains the same value as Bitcoin. Solv is minted by depositing either BTC or other wrapped Bitcoin assets, making it easy for Bitcoin holders to convert their assets into a more flexible, DeFi-compatible form. As a “Bitcoin Reserve for Everyone,” Solv enables Bitcoin holders to move their assets freely and securely between different blockchain ecosystems, eliminating the silos that currently restrict liquidity flow. With Solv, Bitcoin holders can seamlessly participate in DeFi on multiple chains without worrying about fragmented liquidity or the risks associated with individual wrapped BTC assets.