With the Bitcoin market capitalization nearly 2 dollars, Ryan Chow by Solv Protocol says that BTCFI could evolve far beyond the decentralized finance of Ethereum if even a fraction becomes productive.
The decentralized financial space of Bitcoin (BTC) – better known as BTCFI – is still in its first sleeves. But some see a huge opportunity to take shape. The American hedgehist fund focused on the Capital Capital Capital, for example, suggested that it could unlock up to $ 500 billion in value if it gained in the consumer adoption.
Solv Protocol, a platform that helps Bitcoin holders to do more with their BTC, seems to be one of the players who bet on this future. The project has already crossed $ 2 billion in total locked value, aimed at providing Bitcoin strategies in a way that reflects what Lido did for Ethereum.
In an exclusive interview with Crypto.News, the founder of Solv, Ryan Chow, explains why BTCFI could possibly exceed the Ethereum DEFI ecosystem – although he admits that there is still a long way to go. It also weighs on transparency standards as “TVL proof”, the possibility of a Bitcoin Staking ETF, and what it will take to attract institutional capital in the Bitcoin chain economy.
CN: Bitcoin’s DEFI space is still in its infancy, but Pantera thinks that it could unlock an opportunity of $ 500 billion if it takes off. Solv has already reached $ 2 billion on TVL, and Ethereum Lido is more than $ 16 billion. To what extent do you think that the Bitcoin’s development market could get if the Bitcoin of Defi really catches up that of Ethereum?
RC: Although comparisons with the Ethereum lumping market provide a context, the opportunity in BTCFI is motivated by a much more important factor: Bitcoin status as the first world active course.
With a market capitalization nearly 2 dollars, Bitcoin has solidified its place as a significant value reserve. For an asset of this magnitude, a sophisticated financial ecosystem is inevitable. The opportunity lies in unlocking the large part of this 2 billions of dollars which remains inactive. If BTCFI effectively financializes an important part of the Bitcoin market capitalization, its size could be exponentially larger than Ethereum DEFI, driven by the Bitcoin scale as an actor. Solv builds the essential infrastructure necessary to make bitcoin a really productive force in the global financial landscape.
CN: Given regular updates of the total value locked on centralized web2 platforms like Defillama, do you think that implementation protocols should adopt a standardized approach, such as “TVL proof” similar to “proof of reserves” to improve transparency and prevent confusion for users?
RC: Transparency is absolutely fundamental to strengthen the long -term confidence and growth of the ecosystem, especially in BTCFI. Measures like TVL, proof of reserve and proof of potential TVL are precious tools, and we believe that standardized approaches are necessary for clarity.
At Solv, our commitment is unshakable. We actively put several layers of transparency: provide public dashboards, by supporting the verification of third parties like ChainLink Por, working directly with data platforms such as Defillama for specific reports, etc. We are committed to exploring any viable method that truly improves transparency. We support industry collaboration on these standards. The verifiable transparency and integrity are essential to attract the institutional participation necessary for the greatest expansion of BTCFI.
CN: Do you think that an ETF of Bitcoin milestone could follow if the dry approves Ethereum ETF ETF? What is the size of the market?
RC: If the SEC approves Ethereum display ETHE, it could open the door to similar products in the ecosystem, however, an ETF of implementation of Bitcoin would be confronted with unique implementation challenges, because the consensual mechanism of Bitcoin would not natively support the implementation of the evidence of Ethereum. Instead, an ETF of Bitcoin milestone should rely on third-party solutions for the generation of elements, such as LST Bitcoin (liquid liquid chips), creating additional regulatory considerations around security and underlying mechanics.
The market opportunity for these products could be significant given the previous one fixed by the Bitcoin Spot ETF, which have seen billions of entries shortly after approval. Traditional financial institutions that are looking for both Bitcoin exposure and the production of elements could find such convincing products, especially since the wider market becomes more comfortable with digital asset investments. However, the regulatory path would probably require robust safety measures and complete transparency on how the yield is generated.
