Solv Protocol Drama: Analyzing BTCFi’s first major controversy in 2025

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

Author:vivilinsv

Compiled by: Vernacular Blockchain

NuBit Founder’s “Scam Warning” – The First Big Crypto Event of 2025 Is Breaking in the #BTCFi Sphere! The controversy of @SolvProtocol has attracted widespread attention in the encryption circle.

Below is a detailed breakdown of what happened, how it escalated, and the impact this had on #BTCFi and the industry as a whole.

Disclaimer: This article only represents the objective views of an observer. The author has no interest in any party.

1. What happened?

Allegation: User @Clarissexx0805 accused @SolvProtocol of failing to fulfill its promised returns, saying that she pledged 1,800 BTC and the team originally promised her a certain return, but she ended up receiving only the minimum return. Solv responded that she did not switch to higher-yield products as required.

Solv 's response:

@SolvProtocol responded that @Clarissexx0805 chose the product with the lowest return and despite the opportunity to move to better options, she took no action. Therefore, Solv believes that he did not make a mistake.

Escalation of the situation:

The situation escalated further when @nubit_org founder @trackoor issued a "scam warning" and called on users to withdraw their funds from Solv. He compared Solv's transparency to @FTX_Official and accused Solv of having "fake TVL." This added fuel to the fire, and Solv later accused him of spreading FUD news.

2. Public discussion

The controversy sparked widespread reactions from the crypto community: most prominently concerns over its transparency.

Critics, such as @nina_rong, @BitHaHa and @trackoor, questioned why 1800 BTC remained in @Clarissexx0805’s wallet and was being counted against @SolvProtocol’s TVL, raising concerns about transparency.

Representation of support for Solv:

Within crypto circles, there are also those who have come to Solv’s defense, calling the accusations a “deliberate plot” to spread FUD and damage the reputation of the protocol.

The Solv team counters that this is a conspiracy theory: Solv co-founder @myanTokenGeek suggested that the controversy may be an intentional smear campaign, alluding to a possible organized attack attempt against Solv.

Statement from @RyanChow_DeFi:

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

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

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

• Responsibility awareness: He believes that users need to be responsible for their own fund allocation and proactively seize opportunities to pursue higher returns.

3. Personal opinion

I have met @RyanChow_DeFi and @myanTokenGeek in Shanghai during the 2021 epidemic and have always been impressed by their professionalism and tenacity. I am very impressed by @myanTokenGeek (Mr. Meng), he is a philosophical person, while Ryan is full of youthful energy and determination. The team's ability to continue to innovate through market cycles over the years is very admirable.

1) Respond to accusations

The current situation highlights the complexity of disputes in the DeFi space. Here are a few key points worth thinking about in depth:

Terms of deal unclear: Details of the agreement between @Clarisse and Solv are vague. Basically, it’s a “he said, she said” situation where it’s difficult to clarify the responsibilities and commitments of both parties.

Focus of Controversy: Returns Clarisse 's allegations focus on returns that were not honored. If the Solv team’s explanation is true that she did not choose to move BTC to higher-yielding products, then a major portion of the blame should fall on her. But there is also a key question: Should Solv proactively remind or help an important user maximize returns? Especially in a model that combines centralized and decentralized elements, a friendly reminder may be able to avoid this crisis.

Solv’s response: The Solv team responded quickly and methodically, demonstrating strong crisis management capabilities and providing an example for the crypto industry to follow in crisis response.

Transparency Issues: @nubit_org founder @trackoor raised legitimate concerns about on-chain transparency. If protocols were more transparent about how they operate and how they report data, it would help build trust and avoid similar disputes.

Potential Manipulation: Meng Yan’s suggestion that Solv may be facing a larger conspiracy, while interesting, cannot be verified. As spectators, we can only make guesses. For retail investors, this once again emphasizes the importance of fairness and transparency in the ecosystem .

Broad impact on BTCFi and transparency : Currently, BTCFi has yet to achieve widespread adoption, and growth in this area will be relatively flat in 2024. Originally @SolvProtocol was seen as a positive force driving the development of the field in 2025, but this storm may slow down this momentum.

Impact on BTCFi: Controversies like this could erode trust in the emerging space. If not handled properly, it may hinder the participation of institutional and retail investors, thereby affecting the development of BTCFi.

Need for transparency: Clearer transparency standards are urgently needed in this area. The protocol should take steps to ensure that users have a clear understanding of the risks, rewards and mechanics of investing. Clearer on-chain reporting and user education will help reduce similar disputes in the future.

2) Lessons from the industry

This incident brought several important lessons to the industry:

• Proactively communicate with high-value users.

• Transparently report TVL and other key metrics.

• Establish a clear dispute resolution mechanism.

3) Summary thinking

As a bystander, I think this turmoil reminds us of the growing pain points of the crypto industry. The accusations and rebuttals reveal systemic problems, but also provide opportunities for industry development. BTCFi has huge potential, but the key to its success lies in building trust through fair, transparent, and user-centric practices. Hopefully the lessons from this controversy will spur positive change for @SolvProtocol and the entire crypto ecosystem.