With Bitcoin’s market cap nearing $2 trillion, Solv Protocol’s Ryan Chow says BTCFi could scale far beyond Ethereum’s decentralized finance if even a fraction becomes productive.
Bitcoin’s (BTC) decentralized finance space — better known as BTCFi — is still in its early innings. But some see a huge opportunity taking shape. American crypto-focused hedge fund Pantera Capital, for instance, suggested it could unlock as much as $500 billion in value should it gain mainstream adoption.
Solv Protocol, a platform that helps Bitcoin holders to do more with their BTC, appears to be one of the players betting on that future. The project has already crossed $2 billion in total value locked, aiming to bring yield-bearing strategies to Bitcoin in a way that mirrors what Lido did for Ethereum.
In an exclusive interview with crypto.news, Solv founder Ryan Chow talks about why BTCFi might eventually outgrow Ethereum’s DeFi ecosystem — though he admits there’s still a long way to go. He also weighs in on transparency standards like “proof-of-TVL,” the possibility of a Bitcoin staking ETF, and what it will take to attract institutional capital into Bitcoin’s on-chain economy.
CN: Bitcoin’s DeFi space is still in its early days, but Pantera thinks it could unlock a $500 billion opportunity if it takes off. Solv has already hit $2 billion in TVL, and Ethereum’s Lido is sitting at over $16 billion. How big do you think the Bitcoin staking market could get if Bitcoin’s DeFi really catches up to Ethereum’s?
RC: While comparisons to Ethereum’s staking market provide context, the opportunity in BTCFi is driven by a much larger factor: Bitcoin’s status as a premier global asset class.
With a market cap nearing $2 trillion, Bitcoin has solidified its place as a significant store of value. For an asset of this magnitude, a sophisticated financial ecosystem is inevitable. The opportunity lies in unlocking the vast portion of this $2 trillion that remains idle. If BTCFi effectively financializes a significant part of Bitcoin’s market cap, its size could be exponentially larger than Ethereum’s DeFi, driven by Bitcoin’s scale as an asset. Solv is building the essential infrastructure needed to make Bitcoin a truly productive force in the global financial landscape.
CN: Given the regular updates to total value locked on centralized web2 platforms like DefiLlama, do you think staking protocols should adopt a standardized approach, such as ‘proof-of-TVL’ similar to ‘proof-of-reserves’ to enhance transparency and prevent confusion for users?
RC: Transparency is absolutely fundamental to building trust and the long-term growth of the ecosystem, especially in BTCFi. Metrics like TVL, proof-of-reserves, and a potential proof-of-TVL are valuable tools, and we believe standardized approaches are necessary for clarity.
At Solv, our commitment is unwavering. We are actively implementing multiple layers of transparency: providing public dashboards, supporting third-party verification like Chainlink PoR, working directly with data platforms such as DefiLlama for accurate reporting, etc. We are committed to exploring any viable method that genuinely enhances transparency. We support industry collaboration on these standards. Verifiable transparency and integrity are paramount for attracting the institutional participation needed for BTCFi’s biggest expansion.
CN: Do you think a Bitcoin staking ETF could follow if the SEC approves Ethereum staking ETFs? How large could the market be?
RC: If the SEC approves Ethereum staking ETFs, it could open the door for similar products in the ecosystem, however, a Bitcoin Staking ETF would face unique implementation challenges as Bitcoin’s consensus mechanism doesn’t natively support staking like Ethereum’s proof-of-stake. Instead, a Bitcoin staking ETF would need to rely on third-party solutions for yield generation, such as Bitcoin LSTs [liquid staking tokens], creating additional regulatory considerations around security and underlying mechanics.
The market opportunity for such products could be significant given the precedent set by spot Bitcoin ETFs, which saw billions in inflows shortly after approval. Traditional financial institutions seeking both Bitcoin exposure and yield generation might find such products compelling, especially as the broader market becomes more comfortable with digital asset investments. However, the regulatory path would likely require robust security measures and full transparency around how yield is generated.
