Solv Protocol faced a series of doubts on the eve of its TGE, including allegations of false collateral, duplicated TVL calculations, and misappropriation of assets. Co-founder Ryan Chow rebutted each accusation, pointing out clear errors and contradictions in the allegations, and emphasizing that all SolvBTC correspond 1:1 with native BTC and wrapped BTC on the mainnet.
(Prior context: AILayer and Solv Protocol reached a strategic partnership to expand Bitcoin DeFi applications)
(Background: Passive income from Bitcoin》How to participate in the full-chain revenue agreement Solv Protocol? Comprehensive explanation of the ecological path)
The Bitcoin revenue protocol Solv Protocol, backed by Binance investments, faced skepticism and attacks from some members of the community as it approaches its TGE (token generation event). The first emerged accusation was from a user named Mudita, claiming to have missed the opportunity cost of 1800 BTC. The community interpreted this as an accusation that Solv Protocol had “rug pulled” this large holder’s 1800 BTC, which later shifted to alleging that Solv Protocol created false TVL, suggesting that the BTC collateralized in Solv Protocol could be counted multiple times, with an attack claiming that nearly 25,000 BTC collateral was false.
Founder: Accusations based on errors and contradictions
Facing recent consecutive attacks, Solv co-founder Ryan Chow released a lengthy response today. He stated that after enduring a day of baseless attacks such as “1,800 RUG” and “private agreements,” Solv was once again confronted with more absurd accusations. These accusations all revolved around the core issue of asset security but were based on errors and contradictions, attempting to confuse and mislead the public. He emphasized that Solv would respond positively, debunking these unfounded accusations with facts.
Accusation 1: Misappropriation of underlying BTC assets of SolvBTC.BBN
Regarding the public accusation by Nubit co-founder Hans that Solv misappropriated the underlying BTC assets of SolvBTC.BBN, and attempted to substantiate it by referencing mempool links, Ryan stated that Hans’ “evidence” itself contained glaring errors.
In fact, the mempool link screenshot provided by Hans corresponds to Solv’s other revenue asset, SolvBTC.CORE, not SolvBTC.BBN, as directly evidenced in his own screenshot (see below image).
Ryan explained that BTC participating in SolvBTC.CORE needs to be re-collateralized to a new script address every half month, for example, collateralizing on December 19 and withdrawing to re-collateralize on January 2, which is a normal asset management behavior. Additionally, after each operation, Solv updates the address to Defillama, managing assets transparently and openly.
Ryan emphasized that on-chain information can fully demonstrate Solv’s daily asset operations.
Accusation 2: Decrease in SolvBTC.BBN TVL and misappropriation of user assets
Hans also claimed that SolvBTC.BBN experienced a decline in TVL during Babylon Cap3, implying that Solv misappropriated user assets. Ryan clarified that the actual situation was that SolvBTC.BBN officially initiated the redemption process on that date, leading to changes in TVL. This change precisely reflects SolvBTC.BBN providing liquidity and flexibility to users, rather than any form of asset misappropriation.
Accusation 3: “Three-flow” of BTC
Regarding the market speculation of a “three-flow” phenomenon in Solv, accusing Solv of counting the same BTC asset three times in TVL, Ryan stated that such a situation is impossible for Solv’s TVL. In Solv’s calculations, 1 BTC always equals 1 BTC. He further explained:
As the asset issuer, Solv can only be included in on-chain TVL under decentralized applications (dapps) according to Defillama’s classification. Therefore, you may not directly see Solv’s TVL on chains like Base because our SolvBTC and LSTs assets are deployed in dapps like Aerodrome.
While holders of SolvBTC indeed contribute a significant amount of TVL to multiple dapps, this does not mean that there are duplicated calculations in Solv’s TVL.
Ryan emphasized that Solv’s TVL only includes native BTC and wrapped BTC supporting SolvBTC and SolvBTC.LST.
Ryan concluded that as a project that has been deeply rooted for four years, Solv encountered a series of meticulously planned baseless attacks at a sensitive time before the TGE. He stated that Solv has provided all the facts and evidence for the market and the public to judge on their own.
Response to false collateral of 1800 BTC
Regarding the accusation of false collateral of 1800 BTC by Mudita, Solv’s marketing director Ethean responded by stating that all underlying assets of SolvBTC perfectly correspond 1:1 with wrapped BTC and native BTC.
In this incident, the protagonist “1800 BTC lady” collateralized and minted SolvBTC using MBTC. Community members have identified her address, visible to all.
Furthermore, she summarized the recent accusations as follows:
Fabricating a non-existent RUG incident
Confusing operation records of two different LST products
Interpreting routine collateral redemption operations as fund misappropriation
Interpreting the decrease in TVL due to open redemption as a conspiracy theory
The fact is Solv did not engage in false collateral
All SolvBTC underlying assets correspond 1:1 with wrapped BTC and native BTC.
The protagonist of this incident, the 1800 BTC lady, collateralized and minted SolvBTC using MBTC. Community members have found her address, visible to all: https://t.co/SXPifenHa0
— Ethean (@Ethean_yu) January 4, 2025
