As Bitcoin’s market capitalization approaches $2 trillion, a new frontier is emerging: BTCFi — the decentralized finance ecosystem built on Bitcoin. While Ethereum remains the current DeFi leader, Ryan Chow, founder of Solv Protocol, believes Bitcoin’s sheer scale could eventually position it to surpass Ethereum’s DeFi market.
In a conversation with crypto.news, Chow outlined why BTCFi could grow exponentially, the role of transparency in DeFi infrastructure, and the long-term potential for Bitcoin staking ETFs — all while Solv Protocol crosses $2 billion in total value locked (TVL).
Unlocking Idle Capital in Bitcoin
Ethereum’s DeFi boom has been largely driven by staking protocols, with Lido alone securing over $16 billion in TVL. But Chow suggests the comparison misses the bigger picture.
“Bitcoin’s market cap is nearly $2 trillion. It’s a global store of value — and yet the majority of that capital sits idle,” he explains. “If BTCFi can activate even a fraction of it, the financialization potential far exceeds that of Ethereum.”
Solv is currently at the forefront of building this financial infrastructure, offering yield-generating strategies tailored for Bitcoin holders. The company’s focus is on providing the tools to transform Bitcoin from a static asset into one that powers a broader on-chain economy.
A Call for ‘Proof-of-TVL’ Transparency
As BTCFi scales, Chow stresses that transparency will be non-negotiable. With TVL metrics becoming a core industry benchmark, he believes standardized transparency frameworks — like “proof-of-TVL” — could become the norm.
“Just as proof-of-reserves has helped bring accountability to custodians, a similar standard is needed for staking protocols and liquidity providers,” Chow says. “We’re actively working with platforms like Chainlink and DefiLlama to ensure public visibility of our TVL and reserves.”
Solv has already adopted real-time dashboards and third-party audits, setting a precedent that Chow hopes becomes industry standard.
The Possibility of a Bitcoin Staking ETF
While Ethereum staking ETFs are currently under SEC review, a similar Bitcoin product is not so straightforward. Chow notes that Bitcoin’s proof-of-work consensus doesn’t support native staking, and thus any ETF would need to rely on external yield mechanisms like liquid staking tokens (LSTs).
“A Bitcoin staking ETF would likely need a hybrid solution — using LSTs or institutional-grade custodians to generate yield,” Chow explains. “That brings added regulatory scrutiny, especially regarding how yield is produced.”
Still, the demand is there. Following the launch of spot Bitcoin ETFs, institutional appetite for passive yield strategies is growing. A BTCFi-based ETF could become a natural next step — provided regulatory clarity and investor protections are in place.
Bottom Line
BTCFi is evolving from an abstract concept into a multi-billion-dollar sector. If transparency, regulatory alignment, and institutional infrastructure continue to progress, Bitcoin’s DeFi ecosystem could soon rival — or even surpass — Ethereum’s in scope and utility.
