Solv Protocol Secures $10M to Bring Bitcoin Solutions to Institutional Investors

The U.S. Securities and Exchange Commission (SEC) opened the floodgates to institutional bitcoin ( BTC) adoption in 2024 when it approved the first spot bitcoin exchange-traded funds (ETFs)

Solv Protocol, a bitcoin staking platform, has finalized a $10 million ‘Bitcoin Reserve Offering’ to take advantage of the rapidly growing institutional appetite for bitcoin.

The U.S. Securities and Exchange Commission (SEC) opened the floodgates to institutional bitcoin adoption when it approved the first spot bitcoin exchange-traded funds (ETFs).

Bitcoin’s inventor, Satoshi Nakamoto, envisioned the cryptocurrency as digital cash, but its disinflationary issuance schedule and astronomical price appreciation have morphed the asset into digital gold, a safe haven asset that shrewd investors buy and hold to preserve and build wealth.

However, there’s only one problem with holding bitcoin—it doesn't generate yield. Sure, its price appreciation is unmatched, but investors only realize profits if they sell their BTC.

Solv Protocol was designed as a solution to this conundrum by offering staking yield to institutions holding bitcoin, and the $10 million the firm will be used to implement various yield-generating strategies.

“When institutions put their bitcoin into our bitcoin reserve, we won’t let it be idle,” Solv co-founder Ryan Chow told Bitcoin.com. “We will deploy it into BTC yield-generating vehicles.”

Institutions will deposit bitcoin with Solv and in return receive yield-bearing instruments that resemble convertible bonds.

“It’s very similar to Strategy,” Chow explained, referring to how the software company turned bitcoin treasury firm Strategy (MSTR) has frequently financed its bitcoin purchases by issuing debt via convertible bonds.

He also provided examples of assets Solv invests in to generate yields high enough to attract institutional investors. Stablecoins such as Ethena’s USDe are on the menu. USDe is currently offering a 4% yield according to the Ethena website, but the stablecoin has offered returns as high as 56% in the past. Solv also purchases other stablecoins that can be used to invest in different types of crypto assets.

“We use the BTC as a pledge to borrow stablecoins, and then we invest the stablecoins in all those other ways.”

Solv hopes to conduct additional fundraising rounds for its reserve. Chow said the firm has already attracted a few big names, which he declined to disclose. However, he claims large players in the crypto space have already committed funds for subsequent rounds.

“We cannot disclose their names,” Chow explained. “But for the follow-up rounds like round two, round three, we already have a lot of institutions that [have] committed in the pipeline.”