Solv Protocol, a financial services provider catering to bitcoin holders, has entered into a partnership with the decentralized oracle network Chainlink to integrate real-time verification of its actual Bitcoin reserves into the price feed of its liquid token, SolvBTC. This significant move aims to enhance transparency and foster greater trust among its users.
Unlike traditional price feeds that have relied solely on market data, the newly introduced SolvBTC-BTC Secure Exchange Rate feed uniquely merges exchange rate calculations with real-time proof of reserves. This integrated approach delivers an on-chain redemption rate that is firmly anchored in verifiable collateral, offering users increased reliability in their transactions.
A notable feature of this mechanism is its built-in upper and lower bounds based on reserve data, which mitigates the risk of manipulation. This safeguards the system, making it particularly suitable for decentralized lending markets such as Aave.
Ryan Chow, Co-Founder and CEO of Solv, expressed enthusiasm about the collaboration, stating, “We’re excited to work with Chainlink to launch a Secure Exchange Rate feed. This marks a major evolution in DeFi security, allowing protocols to more accurately price wrapped assets by leveraging redemption rates rooted in verifiable collateral, powered by the Chainlink standard.”
The SolvBTC-BTC Secure Exchange Rate feed is now operational on the Ethereum mainnet, with plans to extend its reach to additional blockchains, including BOB.
Launch in April 2024, SolvBTC is a bitcoin-backed liquid staking token designed to allow BTC holders to engage in decentralized finance (DeFi) ecosystems while still earning yield without losing exposure to Bitcoin. Users can deposit BTC to mint SolvBTC, which serves as a liquid representation of staked Bitcoin, thus facilitating its use across various DeFi protocols including vaults, decentralized exchanges (DEXs), and lending platforms.
Chainlink’s Proof of Reserve (PoR) utilizes its decentralized oracle network to verify that the on-chain supply of tokenized assets—such as stablecoins and wrapped assets—is fully backed by corresponding reserves held off-chain or on other blockchains. With billions of dollars in wrapped assets circulating within DeFi, transparent and reliable pricing mechanisms have become increasingly essential.
By amalgamating PoR with price feeds atop Chainlink’s existing cross-chain interoperability through CCIP, Solv enables wrapped assets to serve as collateral securely across multiple blockchains. Johann Eid, Chief Business Officer at Chainlink Labs, encapsulated the significance of this integration, stating, “By combining real-time collateral verification with exchange rate logic, this solution delivers a redemption rate rooted in cryptographic truth, raising the security standard for wrapped assets across DeFi.”
