Solv Protocol Launches a Yield-Bearing Bitcoin Token on the Avalanche Blockchain

The protocol unveiled SolvBTC.AVAX, a token that connects Bitcoin (BTC) to real-world assets like US Treasurys and private credit offered by BlackRock and Hamilton Lane.

Solv Protocol has launched a yield-bearing Bitcoin token on the Avalanche blockchain, providing more opportunities for institutional investors to gain exposure to yield backed by real-world assets (RWAs).

Announced on May 16, the protocol has created SolvBTC.AVAX, a token that combines Bitcoin (BTC) with RWA exposure in the form of US Treasurys and private credit offered by BlackRock and Hamilton Lane.

The token was developed through a seven-way partnership that also includes Balancer, Elixir, Euler, Re7 Labs and LFJ, the company added.

Solv Protocol founder Ryan Chow said the token is a way to link Bitcoin to “real-world economic cycles” in uncorrelated assets such as US government bonds and private credit, as opposed to BTC’s typical boom-and-bust four-year cycle.

The token uses a multi-protocol strategy to generate yield that includes Elixir’s deUSD stablecoin, Treasurys provided by BlackRock and Hamilton Lane via Elixir, and lending platform Euler to increase RWA exposure.

“The yield is received in BTC format,” a Solv Protocol spokesperson told Cointelegraph

Solv is a Bitcoin-centric staking platform that offers yield strategies across various blockchains and decentralized finance applications. The protocol commands more than $2.3 billion in total value locked, according to industry data.

Related: Bitcoin supply crunch boosts confidence in $200K target for 2025 — Bitwise CIOSolv's new token is a way to link Bitcoin to "real-world economic cycles" in uncorrelated assets such as US government bonds and private credit, as opposed to BTC's typical boom-and-bust four-year cycle, according to the protocol founder Ryan Chow.The token is being launched via a seven-way partnership with Balancer, Elixir, Euler, Re7 Labs and LFJ to create SolvBTC.AVAX, which combines Bitcoin with RWA exposure in the form of US Treasurys and private credit offered by BlackRock and Hamilton Lane. It is also integrating Elixir's deUSD stablecoin and Treasury yield through Euler for lending and leveraged RWA exposure.

"The yield is received in BTC format. Balancer will be used to bootstrap liquidity for the token on the Avalanche chain, while Re7 Labs and LFJ are providing legal and accounting support for the initiative," a Solv Protocol spokesperson explained.

The move comes as demand for Bitcoin yield solutions has grown amid the recent wave of institutional adoption of digital assets.Earlier this month, crypto exchange Coinbase launched the Bitcoin Yield Fund, which aims to offer annual returns of between 4% and 8% on BTC holdings. The yield will be earned through a cash-and-carry strategy, which involves purchasing BTC in the spot market and selling a corresponding futures contract, Coinbase said.

CoinShares analyst Satish Patel predicted the growing interest in Bitcoin yield in December, noting that more investors now see BTC "not only as a store of value but also as a means to generate yields."

While there are many ways to generate Bitcoin yield, such as leveraging derivatives or yield farming, Michael Saylor's Strategy introduced its own "BTC Yield" metric to measure the performance of its investment strategy.Strategy's BTC Yield, which measures how much additional Bitcoin it's acquiring relative to its outstanding shares, is currently 15.5% year-to-date, according to the company.