Solv Protocol Faces Accusations of Misrepresenting Bitcoin Staking Metrics

Solv Protocol, a prominent Bitcoin staking platform, is facing allegations of inflating its total value locked (TVL) figures. Industry experts have raised these accusations, which question the platform’s asset-handling practices and the accuracy of its reported metrics.

However, the platform’s team has strongly denied these accusations, labeling them as unfounded and an attempt to spread fear and misinformation.

Concerns Arise Over SolvBTC’s Asset Handling

On January 3, Hanzhi Liu, co-founder of Nubit, brought attention to potential irregularities in Solv Protocol’s operations. Liu alleged that blockchain data suggests the platform recycles the same Bitcoin across multiple protocols instead of locking unique deposits. This practice, according to Liu, artificially inflates Solv’s TVL figures.

Liu explained that SolvBTC, the platform’s wrapped Bitcoin asset, relies on pre-signed transactions to appear in multiple staking protocols simultaneously. This method, he claimed, allows one Bitcoin to be counted multiple times across different platforms, creating the illusion of higher TVL.

For example, one BTC in SolvBTC could be reported as three BTC by leveraging this duplication across various platforms.

“Solv Protocol isn’t locking unique BTC deposits. Instead, it’s using pre-signed transactions to “authorize” the same BTC across multiple protocols: 1 BTC in Solv → +1 TVL BTC Same BTC in Bsquared → +1 TVL BTC (again) Same BTC in ??? → +1 TVL BTC (again) In reality, 1 BTC = 3 fake TVL BTC,” Liu stated.

He also accused the platform of altering its TVL data on monitoring tools like DeFiLlama and moving funds supposedly locked in staking contracts. So, Liu urged users to withdraw their funds from Solv and verify whether their assets are genuinely secured or being reused across protocols.

Solv Protocol Responds to the Allegations

Eva Binary, Solv Protocol’s Chief Marketing Officer, dismissed the allegations, describing them as misleading and baseless. She clarified that Solv’s TVL metrics align with its standard 15-day restaking cycles and are accurately reflected on DeFiLlama.

Binary also attributed TVL fluctuations in specific pools, such as SolvBTC.BBN, to routine redemption processes, denying any manipulation or “3x BTC” inflation.

Ryan Chow, co-founder of Solv, echoed these sentiments, accusing competitors of orchestrating a coordinated effort to tarnish the platform’s reputation. He also argued that these claims are part of a deliberate campaign to disrupt Solv’s operations and undermine its partnerships.

“For months we are aware competitors are out there smearing us to our partners and persuade them ‘don’t work with Solv, work with us instead, [insert accusations above, if not more].’ We have so far chosen to ignore and continue doing us. But no more. Make no mistake. This is a smear campaign, coordinated and orchestrated, and going to great lengths in attempt to take Solv down,” Chow stated.

Solv Protocol’s TVL. Source: DeFillama

Solv Protocol specializes in Bitcoin staking and yield generation across multiple blockchain networks. According to DeFiLlama, Solv currently manages approximately $2.5 billion in TVL.