Solv Protocol Drama: Analyzing the First Major Controversy of BTCFi in 2025

Original Title: "Solv Protocol Drama: A Breakdown of BTCFi's First Major Controversy of 2025"

Author: vivilinsv

Translation: Baihua Blockchain

NuBit founder's "scam warning" ------ The first major crypto event of 2025 is erupting in the #BTCFi space! The turmoil surrounding @SolvProtocol has garnered widespread attention in the crypto community.

Here is a detailed analysis of the event, including what happened, how the situation escalated, and its implications for #BTCFi and the entire industry.

Disclaimer: This article represents the objective viewpoint of an observer, and the author has no vested interest in any party.

1. What happened?

Allegation: User @Clarissexx0805 accused @SolvProtocol of failing to fulfill promised returns, claiming she staked 1,800 BTC, and the team originally promised her a certain return, but she ultimately received only the minimum return. Solv responded that she did not transition to high-yield products as required.

Solv's Response:

@SolvProtocol stated that @Clarissexx0805 chose the product with the lowest returns, and despite having the opportunity to switch to better options, she took no action. Therefore, Solv believes it has done nothing wrong.

Escalation of the Situation:

The situation escalated further when @nubitorg founder @trackoor issued a "scam warning" and urged users to withdraw their investments from Solv. He compared Solv's transparency to that of @FTXOfficial, and accused Solv of having "fake TVL." This move fueled the fire, and Solv subsequently accused him of spreading FUD messages.

2. Public Discussion

This controversy has sparked widespread reactions in the crypto community, most notably concerns about transparency.

Critics, such as @nina_rong, @BitHaHa, and @trackoor, questioned why 1,800 BTC remains in @Clarissexx0805's wallet and is counted in @SolvProtocol's TVL, raising concerns about transparency.

Support for Solv:

In the crypto space, some have come forward to defend Solv, claiming these allegations are a "deliberately orchestrated conspiracy" aimed at spreading FUD and damaging the protocol's reputation.

Solv Team's Counter to the Conspiracy Theory: Solv co-founder @myanTokenGeek suggested that this controversy might be a deliberate defamation attempt, hinting at a potentially organized attack against Solv.

@RyanChow_DeFi's Statement:

In his post, Ryan defended @SolvProtocol with the following points:

• Transparency: He reiterated that the team has maintained open communication regarding its operations.

• Protocol Design: Ryan explained that the 1,800 BTC was staked through a specific mechanism and calculated in the TVL according to standard DeFi operational procedures.

• Sense of Responsibility: He believes users need to take responsibility for their fund allocations and proactively seize opportunities for higher returns.

3. Personal Opinion

I met @RyanChow_DeFi and @myanTokenGeek in Shanghai during the pandemic in 2021 and have always been impressed by their dedication and resilience. @myanTokenGeek (Mr. Meng) left a strong impression on me as a philosophical person, while Ryan is full of youthful energy and determination. Over the years, the team has been able to continuously innovate through market cycles, which is very admirable.

1) Response to Allegations

The current situation highlights the complexity of disputes in the DeFi space. Here are several key points worth our deep consideration:

Unclear Terms of Agreement: The details of the agreement between @Clarisse and Solv are somewhat vague. Essentially, this is a "he said, she said" situation, making it difficult to clarify the responsibilities and commitments of both parties.

Focus of the Dispute: Return Issues Clarisse's allegations center on unfulfilled returns. If the Solv team's explanation is true, that she did not choose to transition her BTC to higher-yield products, then the primary responsibility should lie with her. However, there is also a critical question: Should Solv proactively remind or assist a significant user in maximizing returns? Especially in a model that combines centralized and decentralized elements, a friendly reminder could have avoided this turmoil.

Solv's Reaction: The Solv team's response was swift and organized, demonstrating strong crisis management capabilities and providing a model for the crypto industry on how to handle crises.

Transparency Issues: @nubit_org founder @trackoor raised valid concerns about on-chain transparency. If the protocol could more clearly disclose its operational methods and data reporting, it would help build trust and avoid similar disputes in the future.

Potential Manipulation: Mr. Meng's suggestion that Solv might be facing a larger conspiracy is intriguing but unverifiable. As observers, we can only speculate. For retail investors, this again emphasizes the importance of fairness and transparency in the ecosystem.

Broad Impact on BTCFi and Transparency: Currently, BTCFi has not achieved widespread adoption, and growth in this area has been relatively flat in 2024. Originally, @SolvProtocol was seen as a positive force driving development in this field in 2025, but this turmoil may slow that momentum.

Impact on BTCFi: Similar controversies could undermine trust in this emerging field. If mishandled, it could hinder participation from institutional and retail investors, thereby affecting the development of BTCFi.

Demand for Transparency: This field urgently needs clearer transparency standards. Protocols should take measures to ensure users can clearly understand the risks, returns, and mechanisms of their investments. Clearer on-chain reporting and user education will help reduce similar disputes in the future.

2) Lessons for the Industry

This incident brings several important lessons for the industry:

• Proactively communicate with high-value users.

• Transparently report TVL and other key metrics.

• Establish clear dispute resolution mechanisms.

3) Concluding Thoughts

As an observer, I believe this turmoil reminds us of the growing pains in the crypto industry. The allegations and rebuttals reveal systemic issues but also provide opportunities for the industry's development. BTCFi has tremendous potential, but its success hinges on building trust through fair, transparent, and user-centered practices. I hope the lessons from this controversy can promote positive changes for @SolvProtocol and the entire crypto ecosystem.