Solv Protocol has launched a yield-bearing Bitcoin token on the Avalanche blockchain, giving institutional traders extra publicity to yield alternatives backed by real-world belongings, or RWAs.
On Could 16, the protocol unveiled SolvBTC.AVAX, a token that connects Bitcoin (BTC) to real-world belongings like US Treasurys and personal credit score provided by BlackRock and Hamilton Lane.
The brand new token was developed by a seven-way partnership involving Solv, Avalanche, Balancer, Elixir, Euler, Re7 Labs, and LFJ, the corporate mentioned.
Solv Protocol founder Ryan Chow mentioned the token is a method to hyperlink Bitcoin to “real-world financial cycles” in uncorrelated belongings similar to US authorities bonds and personal credit score, versus BTC’s typical boom-and-bust four-year cycle.
The token makes use of a multi-protocol technique to generate yield involving Elixir’s deUSD stablecoin, Treasurys offered by BlackRock and Hamilton Lane by way of Elixir, and integrated on the lending platform Euler to extend RWA publicity.
“The yield is obtained in BTC format,” a Solv Protocol spokesperson advised Cointelegraph
Solv is a Bitcoin-centric staking platform that provides yield methods throughout numerous blockchains and decentralized finance purposes. The protocol instructions greater than $2.3 billion in whole worth locked, in keeping with trade knowledge.
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The race to supply Bitcoin yield intensifies
Demand for Bitcoin yield options has grown amid the latest wave of institutional adoption of digital belongings.
Earlier this month, crypto trade Coinbase launched the Bitcoin Yield Fund, which goals to supply annual returns of between 4% and eight% on BTC holdings.
The yield shall be earned by a cash-and-carry technique, which entails buying BTC within the spot market and promoting a corresponding futures contract, Coinbase mentioned.
CoinShares analyst Satish Patel predicted the rising curiosity in Bitcoin yield in December, noting that extra traders now see BTC “not solely as a retailer of worth but in addition as a way to generate yields.”
Whereas there are various methods to generate Bitcoin yield, similar to leveraging derivatives or yield farming, Michael Saylor’s Technique launched its personal “BTC Yield” metric to measure the efficiency of its funding technique.
Technique’s BTC Yield, which measures how a lot further Bitcoin it’s buying relative to its excellent shares, is at the moment 15.5% year-to-date, in keeping with the corporate.
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