Introducing Native Yield Assets Backed by Trading Strategies
Every Asset Deserves Native Yield
Background: Every Asset Deserves Native Yield
Native Yield acts as a powerful catalyst for ecosystem growth, attracting liquidity and fostering the development and interoperability of protocols. This dynamic creates a ripple effect, fostering increased trading activity and unlocking additional revenue streams within the ecosystem. As these revenues circulate back into the ecosystem, a virtuous cycle of growth is set in motion.
In the Ethereum (ETH) ecosystem, Native Yield has demonstrated its transformative potential. ETH staking has provided significant income opportunities for ETH holders, while liquid staking derivatives (LSDs) like Lido’s stETH have become a vital LEGO block in the DeFi ecosystem, achieving remarkable success.
However, other mainstream assets like BTC and USDT have lacked native yield options, limiting the growth of their respective ecosystems. Currently, the total value locked (TVL) in ETH protocols represents 15.4% of ETH’s total market cap, whereas the TVL in BTC protocols accounts for only 0.19% of BTC’s market cap. This indicates a significant untapped potential within the BTC market.
Solv‘s Solution: Strategy-based Native Yield Products
Solv introduces a trading-strategy-based mechanism designed to leverage various chains, protocols and exchanges to access diverse yield opportunities. By dynamically allocating liquidity across different trading-strategies, it maximizes the generation of competitive native yields.
We will start with the launch of SolvBTC, SolvETH, and SolvUSDC , offering native yield opportunities for BTC, ETH, and USD. These vaults will be the first step in our journey to provide native yields for a wide range of assets.
The core of oursolution lies in：
- Solv’s Decentralized Asset Management Architecture
Solv’s architecture supports the entire asset lifecycle, encompassing creation, issuance, redemption, and risk management. This framework comprises Trading Strategy Vaults, a Built-In Safe Guardian, Price Oracles, and Liquid Strategy-based tokens.
For more detailed insights, refer to Reimagining Asset Management: Solv’s Decentralized Approach.
2. Dynamic Allocation of Trading Strategies
Liquidity within each native yield pool（SolvBTC, SolvETH, SolvUSD）will be allocated to different strategy-vaults on Solv, each executing independent trading strategies, all of which are carefully selected to be delta-neutral. This strategic allocation ensures a more robust and diversified approach, enabling the achievement of a stable yield. The inclusivity plays a vital role in optimizing native yield and strengthening overall performance.
3. Transparency and Trustless
Solv provides investors with asset autonomy and establishes a trustless standard through smart contracts. These contracts restrict Solv’s operations to strategy execution, mitigating the risk of malicious activities or misappropriation of funds. Smart contract upgrades require joint control with reputable partners via a multi-signature address and TimeLock mechanism. Additionally, if the strategy involves operating on centralized exchanges, Solv will collaborate with on-chain custodians such as Ceffu and Copper to ensure secure off-exchange fund settlements.
4. Security
Each strategy features a predefined pause threshold. If a strategy underperforms and reaches this threshold, it is automatically paused. Additionally, Solv’s 24-hour monitoring system includes delta monitoring to detect abnormalities. If there are deviations or anomalies in the delta values, the system takes prompt action, including pausing the strategy if necessary.
Unlocking the Potential of Native Yield
Solv’s Native Yield Assets are represented as ERC-20 tokens. With ERC-20’s high liquidity nature, Native Yield assets can be listed as trading pairs on major DEXs and CEXs, enabling users to conveniently purchase and sell the asset.
As stable yield-bearing assets, they can serve as foundational building blocks within the DeFi ecosystem. These tokens can be utilized as collateral, staked in liquidity pools, or utilized in yield farming strategies, among other possibilities. Through seamless integration with DeFi protocols, users can further optimize capital utilization to unlock maximum yield potential. This interoperability and integration across various DeFi platforms significantly elevate the value and versatility of Solv’s yield-generating assets within the ecosystem.
Conclusion
By providing a universal native yield creation mechanism that empowers every asset to generate native yield, Solv aims to fuel the flourishing growth of the ecosystem and bring about increased value for more asset holders.
Our upcoming product, SolvBTC, SolvETH and SolvUSD will offer a compelling yield and seamless integration across the DeFi ecosystem. Stay tuned for updates.
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