Solv Protocol has launched a new Bitcoin (CRYPTO:BTC) staking token, SolvBTC.JUP, on the Solana (CRYPTO:SOL) blockchain, aimed at attracting BTC holders seeking higher yield opportunities.
The announcement, made on Oct. 17, highlights the increasing competition for Bitcoin liquidity as decentralised finance (DeFi) and layer-2 (L2) scaling solutions continue to develop within the Bitcoin ecosystem.
SolvBTC.JUP is a liquid staking derivative (LSD) that generates BTC-denominated yield from transaction fees on Jupiter Exchange, one of Solana’s decentralised exchanges (DEX).
According to Solv, the token offers an annual percentage return (APR) of approximately 12%, which is significantly higher than the single-digit APRs typically available for Bitcoin staking on other L2 platforms.
The initiative seeks to enhance Bitcoin’s role in decentralised finance, with the higher yield compensating for additional risks, such as hedging against volatile token prices in Jupiter’s (CRYPTO:JUP) liquidity pool.
Solv employs a delta-neutral strategy to mitigate risk, balancing the net open interest of traders on centralised exchanges.
"Solv mitigates risk by deploying a delta-neutral strategy, hedging traders' net open interest on centralized exchanges," the protocol stated.
With approximately $1.3 billion in total value locked (TVL) on Jupiter Exchange, according to DefiLlama, SolvBTC.JUP offers an attractive option for BTC holders looking for yield.
Other networks, including Bitcoin-native L2s like Core Chain, Babylon, and Spiderchain, are also exploring Bitcoin staking, enabling users to lock up BTC as collateral to secure networks similar to proof-of-stake (PoS) systems.
Meanwhile, Ethereum’s (CRYPTO:ETH) EigenLayer, a restaking protocol, has added wrapped Bitcoin to its collateral options, increasing competition for Bitcoin liquidity across blockchain ecosystems.
At the time of writing, the Bitcoin (BTC) price was $67,628.99, and the Solana (SOL) price was $152.28.