What do you think of the rapid rise of @SolvProtocol, the full-chain yield aggregation platform? In the past few months, Solv Protocol has accumulated over $1B in assets by virtue of the new asset management paradigm of Solv Guard built for the Bitcoin interest-bearing track, and deep binding cooperation with MerlinChain, Babylon, BNBChain and the recent GMX. Why? Next, share my observations:
In my opinion, SolvProtocol's rapid growth is due to the fact that it is stepping on the increasingly prosperous "Restaking+Yield" interest-bearing track with BTC as the core asset and expanding horizontally to the full-chain environment. In short, With the explosion of Bouncebit, Ethena and many Restaking projects, a "CeDeFi" project that mixes CeFi management and DeFi market circulation has attracted attention.
With the savage rise of such projects, how to build a transparent and trustworthy secure asset circulation aggregation environment has become a rigid demand, and Solv Guard aims to provide such projects with an intermediate layer of "transparent contract management" services to make asset control rights more controllable. Specifically:
1) Combining the centralized management efficiency of CeFi with the decentralized liquidity security of DeFi has increasingly become a new mainstream paradigm for asset management. This is due to the fact that CeFi custody can also gain a certain degree of "trust" under the background of the increasing maturity and compliance of Crypto custody institutions, so it will become one of the "efficiency" preference choices in balancing the impossible triangle of security, decentralization, and efficiency, which makes sense.
Take the BTC cross-chain bridge scenario as an example: the pure technical native cross-chain method has a long development cycle and is subject to uncertainty. Using centralized custodians such as Cobo and Ceffu as "bridge" carriers can quickly solve the cross-chain solution of assets, thereby promoting the rapid implementation of BTC layer2 projects, without getting stuck on the cross-chain bridge issue;
Also take the off-chain interest of POS assets as an example: pure POS pledged assets can only obtain the native reward of providing asset pledges for the public chain, but a large number of assets can be passed through the hands of traditional CeFi managers before becoming pledged assets, and also achieve certain income off-site, which increases the income source of POS assets.
Therefore, the fact that CeDeFi-type projects can become the focus is also the result after the impossible triangle TradeOff. It fully combines the management and use efficiency of CeFi and the decentralized transparent circulation application environment of DeFi, and is more suitable for projects with high decentralized technical barriers but absolute advantages in operation and capital. Typical projects include: @Bouncebit, @ethena_labs, and recently noticed a new stablecoin alpha project based on the CeDeFi concept, @BitU_Protocol, etc.
In short, after overcoming compliance issues, some Web2-background projects tend to use advantages such as capital volume and efficiency to quickly land projects in the Crypto field, and the CeDeFi model has become the optimal solution.
2) The centralized part in CeDeFi is often connected to a custodian with compliance qualifications and long-term brand reputation. However, this solution is only a "transitional" solution, and the general direction still has to pursue a decentralized architecture. In the custody application scenario, how to achieve more transparent and refined management?
The overall logic is: to be as transparent as possible and on-chain contract management in terms of the use rights of the custody address, the inflow and outflow of assets, and the management of multi-signatures.
As we all know, Fireblocks, as a hosting SaaS service platform, provides many hosting institutions with an internal control console platform with similar management functions, but this is an internal process service, and the outside world cannot supervise the internal systemic evil.
Based on its own ERC3525 contract standard and SFT semi-homogeneous token exploration experience, Solv Guard has specially launched a public management platform that can provide technology holdings for custodians, and builds all permission settings, authorization management, inflow and outflow review, etc. into a complete set of Authorization permission inspection mechanisms. As a "middleware" service layer, it "increases" the technical content of centralized custodians and decentralized integration, thereby reducing trust friction.
3) How to do it specifically? 1. In the design of asset permissions for the custodial address, Gnosis Safe's multi-signature contract address is used to manage assets; 2. Since Safe multi-signature can only perform simple Threshold management, some more sophisticated complex permissions and conditional execution designs have to be implemented by nesting another layer of Solv Vault Guardian. For example, in the Guardian structure, you can customize the target address permissions, configure Authorization permission checks, configure execution Rules, and nest permission management contracts for specified purposes, etc.
Simple understanding: Solv Guardian further granularizes the management of fund usage permissions (contracts, contract functions, ACL lists, etc.) based on the Safe multi-signature contract, and configures contractual triggers and transparent supervision conditions for funds from inflow and outflow to the entire life cycle of the process. For example: which contracts are allowed, which functions are allowed for each contract, whether each function corresponds to the corresponding ACL permission list, etc.
At the same time, in order to avoid the "middleware" providing refined services and making the "middleware" itself a new layer of centralized risk, Solv has set strict Governor permissions for Vault Guardian: first the committee votes, then the multi-signature triggers the management configuration, and then waits for a certain timelock time before the permission configuration can be performed, including the upgrade and modification of the transaction restrictions, address restrictions, rule restrictions, etc. specified in the contract.
So, how to position the performance of Solv Protocol in asset management capabilities? It can be said that Solv has added an extra lock to the industry celebrity Gnosis Safe, increasing the granular product expressiveness and security of its multi-signature management; it can also be said that Solv has implemented a more Web3 Native "dimensionality reduction attack" for SaaS unicorn service platforms such as Fireblocks, bringing a set of on-chain transparent contractual management methods that are more in line with the needs of industry development into the custody industry process specifications.
In short, the fundamental reasons why Solv Protocol has been able to rise rapidly in the past few months are: 1) It has stepped on the environment of CeDeFi's increasingly strong demand for interest-bearing services, and has been able to quickly reach cooperation with MerlinChain, Babylon, GMX, Ethena, etc.; 2) It has mature financial scenario exploration experience with ERC3525 standards and SFT asset logic, which enables it to have the ability to "extend" granular new "transparent contractual" asset management services.
In addition, it should be added that with the passage of Ethereum ETF, the "commodity" attribute of ETH has been established, and the uncertainty of "regulation" has become clearer. Under the expectation of more OTC funds flowing in, the decentralized and transparent management of digital assets not only meets the market's need for a trusted environment, but also meets the "compliance" means of some regulatory agencies.
I believe that, in this context, Solv Protocol can also explore feasible "full compliance" solutions in terms of the trade-offs between regulatory measures such as "KYC" and "Yield Vaults" and the concept of decentralized services. This is also the basis for expanding the scale of funds in the CeDeFi industry and providing stability for interest-bearing services.
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