In the evolving landscape of blockchain and DeFi, the significance of tokenized Real World Assets (RWA) cannot be overlooked. Solv has been committed to introducing a wide range of asset classes and yield prospects to the crypto world, with the ultimate goal of serving as the pivotal infrastructure that connects liquidity across DeFi, CeFi, and TradFi. Now, we have reached another significant milestone: RWA.
Overview of the first RWA Fund
On September 22, the first RWA fund on Solv V3 was unveiled — RWA: Generate Yield On Your Stable Coins. It is tailored for investors seeking RWA yields with their stablecoin holdings, providing exposure to US Treasury while preserving the stability of their stablecoin assets.
The entirety of the fund’s raised capital will be strategically invested in a single US Treasury, ISIN US91282CDR97. As of August 3, 2023, this US Treasury bond boasts an impressive yield-to-maturity (YTM) of 5.40%. This service is powered by Red Cedar Digital Pte. Ltd., with the custodianship of US Treasury assets held by a Monetary Authority of Singapore Licensed Broker & Custodian.
This is just the beginning of our RWA journey. Solv will introduce a broader range of RWA funds in the future.
Solv’s Proven Track Record in DeFi and CeFi Yield
Prior to the launch of RWA offerings, Solv has established a strong track record of providing innovative yield opportunities across DeFi and CeFi. Since our launch in March 2023, Solv V3 has effectively managed assets valued at $162,898,517 across 76 funds. These funds employ a variety of underlying strategies, including pure DeFi strategies and strategies that combine both DeFi and CeFi elements.
Notable DeFi Strategies
Proactive Market Making
Take “iZUMi Market Making 202301” as an example. The strategy of this fund is to provide liquidity to leading DEXes on Arbitrum and BNB Chain. This fund successfully raised $1.35 million, offering senior tranche a yield of 7% and junior tranche a subordinate yield of 31.6% (what is senior and junior tranche).
Security is our top priority. This fund employs robust risk management measures including
- Collateral: iZUMi provides $500,000 in collateral.
- Custody Solution: All funds are managed through a multi-signature wallet controlled by lead investor BingX, Solv, and iZUMi to ensure the dedicated use of funds.
- Liquidation Mechanism: In the event of extreme market conditions causing a total fund retraction of more than 10%, the fund manager will withdraw all liquidity and initiate liquidation.
Notable DeFi + CeFi Strategies
Delta neutral strategies with minimal drawdowns across CeFi and DeFi platforms.
Take Blockin GMX fund as an example. Blockin has issued six neutral strategy funds, providing liquidity on GMX V2 while hedging on Binance. By monitoring open interest and currency fluctuations, fund manager Blockin hedges risks in real-time. These funds have collectively raised approximately $40,000, with yields ranging from 10% to 30%.
This fund has robust risk management measures in place. If the 30-day drawdown exceeds 3%, the strategy will be forced to liquidate positions and suspended for at least 14 days. Proactive precautions like this drawdown limit help protect investor assets through volatile market conditions.
How Solv Ensures Asset Security
Solv provides powerful on-chain infrastructure enabling access to diverse yield-generating assets. With a variety of assets comes the need for stronger security guarantees.
Solv’s solution is our security-first framework, which comprises two key modules:
- Trustless Fund Infrastructure Powered by ERC-3525
Based on ERC-3525, Solv efficiently creates complex financial products on-chain. Solv V3 utilizes smart contracts to fully automate fund operations in a non-custodial way. All fund issuance, administration, and settlement is handled by smart contracts. Backend capital permissions are also automated via smart contracts. Fund NAVs and historical performance are transparently recorded on-chain using trusted oracles, achieving complete lifecycle transparency.
2. Risk Management Engine
Solv enables trusted institutions to collaborate in a decentralized framework to build on-chain and off-chain risk systems, providing a transparent, non-custodial DeFi risk management engine, which include:
- Institutional-Grade Fund Screening
Trusted institutions collaboratively screen funds under Solv’s organization, offering institutional-grade expertise to everyday investors.
- Multi-party Controlled Vault
Regardless of DeFi or CeFi strategies, all funds raised on the Solv platform are transferred to designated MPC solutions via Solv V3 smart contracts. Permissioned roles strictly separate transfer rights, liquidation rights, and operation rights, preventing fund manager scams or fraud. Investors can view real-time fund flows to identify risks, and influence usage permissions through custody dashboards if necessary.
- Coordinated Settlement Procedures
Solv organizes the trusted institutions to set proper liquidation rules for each fund to limit losses. Dedicated risk managers monitor positions, issue alerts, and handle orderly liquidations if triggered. In liquidation events, risk managers have special permission to smoothly close out positions and cash out funds, preventing extra losses.
The RWA Fund on Solv V3 signifies a significant advancement in democratizing access to the secure and smart-yield domain in DeFi. Simultaneously, Solv is poised to emerge as the ultimate all-in-one gateway to yield opportunities spanning DeFi, CeFi, and TradFi.
About Solv V3
Officially launched in 2023, Solv V3 has pioneered the construction of a trustless fund infrastructure based on ERC-3525. It also achieved decentralized collaboration between trusted institutions to offer transparent, non-custodial DeFi risk control. It allows global investors to access varied, trusted crypto investments on one transparent and secure platform, and empowers excellent fund managers to efficiently raise capital and build on-chain credibility.
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