Analysis of the Solv Protocol project
Solv Protocol is a next-generation financial protocol aimed at developing infrastructure for liquidity management. The project has developed a new type of financial asset based on ERC721 tokens called vouchers. Vouchers contain characteristics such as underlying asset, valuation date, expiration date, issuance coefficient, etc. Therefore, these vouchers can have different values and be issued to meet the needs of each specific issuer or investor. To simplify understanding of the final product, it can be compared to a bond.
In addition to the popular product and advanced technology, the advantage of Solv Protocol lies in the creation of its own platform that ensures liquidity for all voucher transactions. This is a convenient and secure solution for funds, institutions, market makers, and other large entities, which can provide a quick start even for non-crypto-oriented companies.
However, the most important thing for us as investors is that the project is already working and has excellent indicators:
- The total amount of funds issued is $161,000,000
- Total Value Locked (TVL) - $53,000,000
- Number of users - 26,140+
Tokenomics
The project's token is $SOLV, with a total supply of 100 million tokens.
The $SOLV utility token is intended for the following purposes:
1. Participating in voting on important protocol decisions.
2. Holding $SOLV tokens allows borrowers to mint NFT vouchers.
3. Token holders will receive benefits such as
-priority access to closed pools,
-lower protocol fees, and a revenue-sharing model.
-This approach is becoming more common and ensures fairness between investors and the project team.
Solv Protocol's business model includes commission rewards for NFT voucher purchases, receiving a portion of the asset placement's percentage-based revenue (carry), and other models.
Project value
Solv Protocol aims to reduce barriers to creating and utilizing financial instruments in the chain by offering various asset classes and opportunities to generate cryptocurrency profits, ultimately becoming crucial infrastructure connecting liquidity between DeFi, CeFi, and TradFi. The project enables global institutions and retail investors to access diverse and reliable cryptocurrency investments on one transparent and secure platform. The project has developed a new type of financial asset based on ERC721 tokens called vouchers. These vouchers contain characteristics such as underlying asset, valuation date, expiration date, issuance coefficient, and more. Therefore, these vouchers can have different values and be issued to meet the needs of each specific issuer or investor. For simplicity, the final product can be compared to a bond.
Social network
The project's Twitter account has 134k followers (Score 573, which is very good for an early-stage project). Many influencers, fund CEOs, and other notable individuals follow them on Twitter. They also have a Telegram channel with 40k subscribers, where the project shares news about its products.
Team
Will Wang - Co-Founder. He has extensive experience in technology and blockchain, and his work at Solv Protocol focuses on developing innovative financial instruments based on NFT technology and the Ethereum blockchain. He developed the EIP-3525 standard: Semi-fungible token, which was later adopted by the Ethereum community. This standard combines the desirable characteristics of ERC-20 and ERC-721 for tokenizing real-world financial assets.
Meng (Mike) Yan - Co-Founder. He is one of the initiators and authors of the ERC-3525 token standard, which is the first standard for Semi-fungible Tokens. These tokens possess high flexibility and efficiency and can represent various digital assets, financial instruments, and digital contracts.
Ryan Chow - Co-Founder. In addition to being one of the authors of the ERC-3525 standard, he led the external communications and public relations team at IBM, actively involved in developing and implementing strategic initiatives, including projects like Smarter Planet, Cognitive Business, and Blockchain. Under his leadership at Solv Protocol, Solv V3 completed the issuance of funds amounting to $141 million by June 2023 and expanded to Ethereum, Arbitrum, and BNB networks.
Investors and funds
At the moment, the project has already closed 4 investment rounds, starting from May 2021 and continuing until August 2023.
Some of the top funds that have invested, including multiple times, are Binance Labs, Blockchain Capital, IOSG, Spartan, Mirana Ventures, and Hashed Fund.
The most important aspect is that those who participated in the SEED round in 2021 have reinvested in later stages, which is a strong signal of quality.
Conclusions
The current project has numerous advantages.
- Solid funds with impressive portfolios and substantial resources are involved to assist the project in its development.
- The project introduces a new and unique asset format - vouchers.
- It implements and leverages a unique technology called Semi-Fungible Tokens (SFT).
- A significant focus of the project is on servicing and attracting institutional investors who are willing to deploy their substantial capital into convenient solutions.
- The platform has been created and developed for over two years and is now fully operational, boasting impressive metrics in terms of users (26,140+) and the total value locked ($53M).
In conclusion, the project has a unique and largely implemented solution. It primarily focuses on attracting large investors. There are already significant indicators of effective performance, indicating that it is not at an early stage with lofty plans and nothing more. The repeat investments from funds are a testament to the quality of the Solv Protocol. Marketing, team expertise are also at a high level, evident from their social media presence and the already implemented application. Most importantly, we are investing at a valuation of $100M, almost on the same terms as Binance Labs. Based on the readiness of their product, we expect a listing in Q1-Q2 2024.
We estimate the potential return at 900-1400% or more, drawing on the performance of projects focused on finance and institutional investors.