Bitcoin staking platform Solv Protocol is at the center of controversy after accusations surfaced that it has been manipulating its total value locked (TVL). Lianchuang Hans, the co-founder of Nubit, alleged on X that the protocol has been recycling user deposits.
According to Hans, Solv uses the same assets on multiple protocols and manipulates its TVL on Defillama. He alleged that the platform is not locking BTC deposits as it claims. Following his accusations, Hans called on Solv users to withdraw their assets from the protocol as they could lose their assets.
Han said:
“Solv Protocol isn’t locking unique BTC deposits. Instead, it’s using pre-signed transactions to “authorize” the same BTC across multiple protocols.”
Solv is a Binance-backed DeFi project on Bitcoin that has been attracting positive interest in recent months. It is set to have its airdrop on Binance this year after the exchange announced it as the third project on its Binance Megadrop launch pad. The protocol has also secured a potential listing on the Hyperliquid spot exchange.
Solv faces multiple allegations from various quarters
Han’s allegation is not the first time that Solv has come under public scrutiny in recent days. Just a few days ago, one Bitcoin whale claimed that she had a private agreement with Solv protocol to use her 1,800 BTC as reserve assets for SolvBTC even though the Bitcoin remained under her control.
Before that, Jacob Phillip, the co-founder of Lombard Finance also raised concerns about Solv protocol two weeks ago. Although he did not mention the project specifically, he claimed that some liquid staking protocols lost a part of their TVL and did not stake during the Babylon Cap3 staking window.
Hans referenced this allegation as well while noting that on-chain transactions show that Solv recently moved BTC from one of its addresses. This Bitcoin ought to have been staked on Babylon protocol.
Meanwhile, Hans called on the Solv team to stop trying to set up a private meeting and publicly clarify information about its operations by providing users with transparency on its wallets, reserves, and staked assets.
Solv Protocol team dismisses allegations as smear campaign
The Solv protocol team responded to the allegations, describing them as malicious, baseless, and intended to destabilize the project.
Solv co-founder Ryan Chow published an article on X where he debunked all the claims Hans raised. According to Chow, Solv operates multiple Bitcoin liquid staking tokens (LSTs), and the mempool link Hans posted as evidence of Solv moving BTC is misleading. He explained that BTC was not for its SolvBTC.BBN product which is staked on Babylon, but rather for the SolvBTC.CORE product.
Chow further clarified the reason for the declining TVL and alleged changes to the TVL on Defillama. He noted that the redemption for SolvBTC.BBN started on the same day as the Babylon Cap3 staking, and TVL updates on Defillama are a standard procedure that happens every two weeks.
He wrote:
“Solv officially began the redemption of SolvBTC.BBN on the same day. It is completely normal for TVL to change, which highlights the liquidity and flexibility provided by SolvBTC.BBN to users.”
The Solv team has threatened to take legal action against Hans if he does not retract the accusations, which it believes is a calculated smear campaign aimed at derailing its token launch. Chow noted that Solv has been around for four years now and has gone through two cycles without any issues.
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