Solv Protocol: The Middle East Is a Remarkable Place to Build DeFi platforms

    16 Jun 2022

    With the emergence of decentralized finance (DeFi), NFTs that broadly represent financial ownership and rights, often dubbed “financial NFTs,” are showcasing exciting use cases of NFTs the space has never seen.

    Solv Protocol, a DeFi startup, is a platform for creating, managing, and trading financial NFTs, or Vouchers.

    “The most pressing problem in the emerging field of DeFi is the absence of an efficient and flexible tool to express complicated financial contracts,” says Mike Meng, Solv Protocol’s co-founder, in a press release announcing a new partnership with Binance. “Solv Protocol offsets the gap by bringing to the table financial NFTs and a marketplace designed specifically for creating and trading financial NFTs.”

    To date, Solv Protocol has partnered with over 30 crypto projects, including Binance, all of whom have minted their own Vesting Vouchers for various underlying assets. As of January 10, Solv’s TVL (Total Value Locked) has reached an all-time high of $260 million.

    Gulf Crypto Insight spoke with Doreen Du, Solv Protocol’s spokesperson, concerning the matters and prospects for the promising project.

    “First, I’ll tell you what our platform is about and what’s motivating us to build a financial NFT ecosystem,” Doreen said in an interview with Murad Zaur. “Our team feel it’s too difficult for common users to use the financial instruments in DeFi. If you like liquidity mining, you’ll will get a ton of different LP tokens. But each LP token has a distinct label, some too hard to remember. So when you open your wallet, you can see a lot of different tokens but you have no idea what they are. With Solv’s token standard, using financial instruments becomes very easy  because the standard expresses all the information that you need in the self-generated artwork of the NFT.”

    According to the official blog, financial NFTs are powered by an all-new token standard by Solv, ERC-3525. It’s an infrastructure-level solution and an enhancement of ERC-721 that simplifies the implementing and programming of advanced financial products.

    “Basically, you can put any kind of digital assets into an NFT-container, and you get your own financial NFTs,” Doreen explained. “Imagine when you go to the bank, make a deposit and get a receipt in turn. And that receipt is going to tell you everything about this deposit: interest rate, duration, insurance, an so on. The same with the financial NFT. Vesting Vouchers will tell everything about your token vesting: vesting schedule and the type of vesting, who the owner is, etc.”

    A Vesting Voucher is a kind of financial NFT that locks and vests tokens over time. All Vouchers created by Solv are powered by the ERC-3525 token standard, which allows for the splitting and merging of the NFTs. Vouchers allow users to enjoy the descriptive attributes of the ERC-721 standard and the liquidity of the ERC-20 standard.

    Besides the Vesting Voucher, Solv Protocol has also rolled out Convertible Vouchers and Bond Vouchers. A Convertible Voucher is a zero-coupon bond with a price range by which DAOs will offer a fixed yield to the investors, with the convertibility into project tokens. A Bond Voucher removes the Convertible Voucher’s downside protection but requires the issuer to pay back principal and interest no matter the price of the project token.

    The ability to trade financial NFTs significantly improves liquidity for the locked assets and has proved to be useful in numerous use cases across DeFi. Fortunately, Solv Marketplace is far from the only platform where financial NFTs could be traded.

    “Financial NFTs are wide supported by large NFT platforms. You can put them up for sale on NFT marketplaces like OpenSea or Rarible. Or you can borrow against your financial NFTs on NFT lending platforms,” Doreen said. “You can create a variety of cool structural financial products and apps. In a way, it’s really like building your own investment portfolio, except now it’s tokenized.”

    So, how does the platform work? 

    When asked to described the platform’s business model, Doreen said that the Solv provides marketing and community-building solutions for early-stage projects, as well as the treasury-diversifying  solutions for post-IDO(or post-TGE) protocols.

    “Crypto projects that have needs around community-building or fundraising need to put their tokens into the Solv smart contract. she explained. “On the other side, we’ll connect with keen investors who will come in and start investing in the tokens.”

    Speaking of potential clients, Doreen noted that it is usually difficult for early-stage projects to incentive their communities because doing so would mean using tokens, which most of them have not launched yet. What Solv can do is to allow them to sell pre-IDO tokens without any impact upon the token price, and it’s called Initial Voucher Offering, or IVO.

    An IVO is a public offering of tokens where project tokens are locked and sold in Vouchers to retail investors who would not have previously been able to invest in early projects.

    “They just need to lock their tokens into our smart contract and the investors will come in to our marketplace and purchase them. In the process, we’ll help marketing exposure towards over 1 million sophisticated DeFi investors to help close the sale.  IVOs are price-friendly to tokens because lockups don’t  have sell pressure for the market.,” she said. “This way, projects can safely use the proceeds from the sale to build out their products and services in time and wait out until the right time to launch their IDO.”

    Du also mentioned that the IVO is a very useful way to build a robust follower base on social media.

    “We’ve seen remarkable growths in Twitter, Telegram and Discord followers since Solv’s own IVO launch last December,” she said, adding that all these users are incentivized to remain in and actively contribute to the project’s community “I think this creates a nice win-win and a really healthy dynamic for the entire industry from a macro perspective.”

    In response to the question regarding Solv’s marketing strategy, Doreen noted that Solv’s marketing strategy is actually no different from that of other DeFi platforms.

    “We have very good relationships with over 50 top-tier institutional investors of DeFi,” she said, mentioning Blockchain Capital, Sfermion, Binance Labs, Bybit, and Gumi Cryptos.

    “We got our funding PR in some crypto media, and maintain daily connections with their editors. We also invite influencers we already know into the space and sophisticated users to try out our products. We’ve worked with over 450 influencers across all major demographic regions of the world, including most of English-speaking markets, Russia, Turkey, Japan and Korea. If you know anything about today’s crypto, you’d know that we’ve pretty much covered it all.”

    When asked how the war in Ukraine and global sanctions against Russia will affect the crypto industry and Solv, Du said that the platform has the war has not and will likely not affect the project in any real ways and Solv has a vibrant Russian-speaking community that the team is very proud of.

    “Solv is a decentralized platform, which means no discrimination whatsoever will come from our protocol, and that includes political,” she answered.

    Regarding Bitcoin’s reputation as a safeguard against inflation, Doreen denied that this reputation has changed much despite the market condition.

    “When the market has accumulated lots of capital, everyone will want to diversify. It’s never a good idea to put all your eggs in one basket. Keep investing especially when the market sentiment is bearish, but be smart about it,” she said.

    “Right now, we have several stablecoin projects in the space and some of them have chosen Bitcoin as the pillar of their treasuries. The market always responds positively to this diversification strategy,” Doreen noted, adding: “Bitcoin might benefit the world of traditional finance serving as an asset for diversification. It would help derisk investments, I’m sure.”

    Du confirmed that Solv Protocol has plans to expand its business to the Middle East and expressed interest in having partners in the Gulf region.

    “The Middle East region is an excellent market for the financial industry. Both wealth and education levels are high.  I think the society there will absorb crypto rather rapidly,” she resumed. “We consider the Middle East a remarkable place to build DeFi platforms, like Solv.”

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