With the market capitalization of Bitcoin, almost $ 2 trillion, says Ryan Chow of SOLV Protocol that BTCFI can scale much further than the decentralized financing of Ethereum if even a fraction becomes productive.
The decentralized financing space of Bitcoin (BTC) – better known as BTCFI – is still in the early innings. But some see a huge opportunity taking shape. For example, American Crypto-oriented Hedgefonds Pantera Capital suggested that it could unlock no less than $ 500 billion in value if the mainstream acceptance were to get.
SOLV Protocol, a platform that helps Bitcoin holders to do more with their BTC, seems to be one of the players who bet on that future. The project has already crossed $ 2 billion in the total value, aimed at bringing return strategies to Bitcoin in a way that reflects Lido for Ethereum.
In an exclusive interview with crypto.news, SOLV founder Ryan Chow talks about why BTCFI would eventually outgrow the Defi Ecosystem of Ethereum -although he admits that there is still a long way to go. He also weighs on transparency standards such as ‘proof-of-TVVL,’, the possibility of a bitcoin deployment ETF, and what it is needed to attract institutional capital in the Bitcoin economy in the chain.
CN: Bitcoin’s Defi space is still in the early days, but Pantera thinks it can unlock a chance of $ 500 billion if it starts. SOLV has already hit $ 2 billion in TVL and Lido of Ethereum is more than $ 16 billion. How big do you think the Bitcoin -inserting market could get if Bitcoin’s Defi really catches up for Ethereum’s?
RC: Although comparisons with the Ethereum market offer context, the possibility in BTCFI is powered by a much larger factor: the status of Bitcoin as a prominent global activa class.
With a market capitalization of $ 2 trillion, Bitcoin has solidified its place as an important value of value. For a possession of this size, an advanced financial ecosystem is inevitable. The chance lies in unlocking the enormous part of this $ 2 trillion that remains inactive. If BTCFI effectively finances a considerable part of the market capitalization of Bitcoin Financial, its size can be exponentially greater than the Defi van Ethereum, powered by the Bitcoin scale as an active. SOLV builds the essential infrastructure needed to make Bitcoin a really productive power in the worldwide financial landscape.
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CN: Given the regular updates for the total value that are locked on centralized Web2 platforms such as Defillama, do you think that setting up protocols should use a standardized approach, such as ‘Proof-of-TVL’ similar to ‘Proof-of-Reserves’ to prevent transparency and to prevent confusion for users?
RC: Transparency is absolutely fundamental for building trust and the long -term growth of the ecosystem, especially in BTCFI. Statistics such as TVL, proof-of-reserves and a potential proof-of-TV are valuable tools, and we believe that standardized approaches are needed for clarity.
At SOLV, our dedication is not repellent. We actively implement multiple layers of transparency: providing public dashboards, supporting verification of third parties such as Chainlink Por, which collaborate directly with data platforms such as Defillama for accurate reporting, etc. We support industrial cooperation on these standards. Verifiable transparency and integrity are of the utmost importance for attracting the institutional participation needed for the greatest expansion of BTCFI.
CN: Do you think that a Bitcoin deployment ETF could follow if the SEC Ethereum approves ETFs? How big could the market be?
RC: If the SEC ETHEEM STIVE ETFs approves, it could open the door for similar products in the ecosystem, but a Bitcoin infringement ETF would get unique implementation challenges, because Bitcoin’s consensus mechanism does not support native such as Ethereum’s Proof-of-Stake. Instead, a Bitcoin strike ETF should rely on solutions from third parties for generating yield, such as Bitcoin LSTs [liquid staking tokens]Creating additional legal considerations regarding security and underlying mechanics.
The market opportunities for such products can be considerable, given the precedent established by Spot Bitcoin ETFs, who saw billions in the inflow shortly after approval. Traditional financial institutions that look for both Bitcoin exposure and yield generation can find such products convincing, especially the more comfortable with investments in digital assets. However, the regulatory path would probably require robust security measures and complete transparency about how yield is generated.
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