Solv Protocol Launches Bitcoin Staking Token on Solana Amid Growing Competition for BTC Liquidity

As Bitcoin's layer-2 (L2) and decentralized finance (DeFi) ecosystems continue to evolve, competition for Bitcoin liquidity across multiple blockchain networks is intensifying. In a strategic move, Solv Protocol has introduced a new Bitcoin staking token on the Solana network, offering BTC holders enhanced yield opportunities. The announcement was made on Oct. 17, as Solv seeks to attract Bitcoin liquidity to Solana’s decentralized finance landscape.

The token, named SolvBTC.JUP, is a liquid staking derivative (LSD) designed to generate Bitcoin-denominated yield through transaction fees on Jupiter Exchange, one of Solana’s leading decentralized exchanges (DEX). Though still in its pilot phase, the token aims to establish Bitcoin's stronger presence within decentralized finance, offering an attractive alternative for BTC holders seeking higher returns.

Competing for Bitcoin Liquidity

Bitcoin’s emerging L2 and DeFi ecosystems have introduced new yield options, prompting networks like Ethereum and Solana to compete for BTC liquidity. SolvBTC.JUP is positioned to offer approximately 12% annual percentage returns (APR), significantly higher than what is typically available through Bitcoin staking on L2 chains, where yields are generally in the low single digits.

To balance the risks associated with volatile token price exposure in Jupiter’s liquidity pool, Solv employs a delta-neutral strategy, which involves hedging against traders’ net open interest on centralized exchanges. This risk management technique aims to provide more stability for BTC stakers participating in Solv's yield-generating protocol.

Jupiter Exchange and Solana’s Growing DeFi Presence

Jupiter Exchange, which hosts the SolvBTC.JUP token, is one of Solana’s most active decentralized exchanges, with approximately $1.3 billion in total value locked (TVL), according to data from DefiLlama. The introduction of Solv’s staking token is expected to further enhance liquidity and yield opportunities for Bitcoin holders within the Solana ecosystem.

Rising Interest in Bitcoin-Native Staking

While Solv focuses on Solana’s DeFi landscape, other projects are also exploring Bitcoin-native staking solutions. Core Chain, Babylon, and Spiderchain are among the platforms working on Bitcoin-native staking protocols, where BTC is locked as collateral in exchange for rewards, similar to proof-of-stake (PoS) networks like Ethereum.

Additionally, EigenLayer, Ethereum’s largest restaking protocol, has expanded its offerings to include wrapped Bitcoin, allowing BTC holders to use their tokens as collateral for restaking across multiple protocols. This growing competition underscores the increasing demand for Bitcoin in staking and DeFi, as various platforms vie to capture BTC liquidity.

As Solv Protocol moves forward with the launch of SolvBTC.JUP, it adds another layer to Bitcoin’s expanding role within decentralized finance, offering innovative yield opportunities for BTC holders on Solana.