Solv V3 Retrospective: How to Find a Reliable Innovation Path in Web3 (Part 1)
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Solv V3 Retrospective: How to Find a Reliable Innovation Path in Web3 (Part 1)
A阶段性 review of Solv's Web3 startup journey: entering the market through imitation or innovation? Solv V1 accidentally hit the mark, Solv V2 launched at the wrong time but still holds future potential, and with V3 we have finally identified our key user positioning and value proposition.
Navigating Web3 tides with focused insightsAuthor: Meng Yan, Solv Core Team
Solv V3 was launched on March 21, and it has now been exactly three weeks as of this past Monday. In these three weeks alone, the actual transaction volume has exceeded $60 million, with expectations to surpass $100 million within this month. Based on our current pipeline, this growth momentum is set to continue. Within a few months, Solv V3 is projected to generate hundreds of millions of dollars in real transaction volume.
In the crypto market, such figures may seem insignificant. But for us, they are hard-earned. Although the secondary market has shown signs of recovery recently, and industry events in Hong Kong are bustling, we are not currently in a bull market or an expansion phase for the industry. If we draw a historical analogy, this period resembles the recovery phase between spring and summer of 2019—there's some return to the secondary market, but no substantial underlying growth to support it. Under these conditions, Solv V3 achieving such results genuinely exceeds our expectations. A couple of days ago, we announced internally that Solv V3 had scored an initial victory. Of course, we're still far from true success, and we must remain calm, closely monitoring market changes and risks.
If Solv V3’s growth continues, its significance could transcend the project itself. Solv V3 is a “digital asset fund supermarket,” establishing end-to-end standardized processes for on-chain fund issuance, trading, clearing, and settlement, enabling users to easily create funds and raise capital quickly.
On the backend, Solv V3 integrates Gnosis Safe, Cobo, Enzyme, and multiple custodians including Ceffu and Copper, using multi-party management mechanisms and technical measures to ensure fund managers can generate returns without misusing funds. On the frontend, investors can monitor fund status, trade investment certificates (SFTs), and in the future, access additional liquidity through various lending platforms.
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For ourselves, if V3 succeeds, it marks that we’ve finally found a path suited to the current market—one that is original and distinctive, not a mere copy of any existing successful project. This is a new赛道—a truly innovative offering, not a clone of another project.
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For the industry, if we succeed, we could potentially open up an entirely new market within Web3—one we believe holds immense latent potential.
To make perhaps an imperfect analogy, the hottest DeFi projects during the last bull run—Uniswap, Compound, Aave—all pioneered new tracks during bear markets. Though initially small, they proved their value propositions and business models viable. Then, when the bull market arrived, these new tracks evolved into massive markets.
The idea of creating a digital asset fund supermarket has long existed in crypto. Back in the 2017–2018 bull market, I personally knew of at least five such projects, one even backed by a star-studded team reportedly from Yale. Yet after all these years, none have succeeded.
Anyone who’s started a company knows that venturing into areas where many have repeatedly failed carries exceptional risk, and generally shouldn’t be chosen. So why did we take this path? And how did we get here?
After some reflection, we decided to conduct a阶段性 review of Solv’s arduous exploration over the past two-plus years in selecting application scenarios, summarizing what can be publicly shared.
It should be noted that Solv hasn’t yet achieved genuine success, so this retrospective isn’t meant to boast—we have nothing to brag about. However, in the Web3 space, people tend to enjoy mythologized stories: elite teams with golden backgrounds, visionary insights cutting through chaos, effortlessly securing dominance. But those of us in the industry know reality is far grittier. Anyone seriously trying to build something lasting—rather than cashing out and disappearing—faces immense difficulty and twists along the way. Few are willing to share these struggles externally. We’ve always wanted to read such honest accounts but never found them. Since no one else has, let’s try writing one ourselves, hoping it offers value to peers and readers alike.
Web3 Projects: Copy or Innovate?
In entrepreneurship, unless absolutely necessary, few willingly pursue pioneering innovation. If China’s Web2 success left any fundamental lesson, it’s “don’t stand out,” or more precisely, avoid risky ventures into uncharted territory. Instead, replicate others’ successes—follow proven paths—and tailor them to specific markets via “micro-innovations” or process improvements.
Whether in Web2 or Web3, going “from 0 to 1” is the riskiest and most difficult. The deepest fear early entrepreneurs face is releasing an idea they’ve meticulously refined, only to find the market rejects it—with no clear way to pivot. For almost anything else, there are established frameworks; the challenge lies in knowing them or finding experts. But discovering new market opportunities follows no playbook.
Why is Steve Jobs still revered as an innovation leader decades after his passing? Why is Elon Musk seen as Iron Man regardless of his billionaire status?
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Because both are exceptionally rare individuals capable of repeatedly pioneering innovations and opening new tracks.
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Precisely because such cases are extremely rare, most entrepreneurs should avoid striking out independently. It’s wiser to improve upon already-proven paths.
When someone else has built it, validated it, and educated users, launching an improved version avoids the biggest startup risk. Remember, entrepreneurship isn’t about pride or winning internet applause—it’s about achieving commercial success. Thus, “not innovating” is actually rational, pragmatic, and responsible.
Yet in Web3, standing out is the norm. Entrepreneurs seem reluctant to copy others, each insisting on adding some novelty. During every bull market, we see countless novel ideas competing for attention, overwhelming observers.
My most vivid memory is during the 2020–2021 DeFi bull run, when many script-kids skimmed a few finance textbook pages and launched financial innovations—complex formulas flew everywhere, groundbreaking financial products flooded in. At the time, it created a strong illusion: Are traditional finance professionals really that incompetent? How could they miss such brilliant ideas for decades?
Of course, in hindsight, most were pseudo-innovations—many lacked basic theoretical foundations, bordering on fabrication.
So why do so many Web3 founders prefer fabricating novelties over following proven copying strategies? We believe it’s mainly because Web3 remains early-stage, offering high rewards for innovators. Specifically, five reasons:
- First, the Web3 market places a high premium on “authenticity,” making copycat projects feel unrewarding. Web2 users don’t care who originated an idea—they only care about usability. Savvy internet veterans never take early risks; instead, they watch for underdogs who accidentally blaze a trail, then immediately clone it, leveraging advantages in product, UX, and traffic competition to overtake the pioneer. Over time, forgetful users and media often mistake the imitator for the originator, leaving creators heartbroken while copycats reap fame and fortune. But in today’s Web3 stage, the market deeply values authenticity. As a category creator, you receive top valuations and honors; as a follower or copycat, your valuation barely reaches a tenth, no matter how hard you struggle. Vitalik Buterin observed this early, noting that “authenticity” is crypto’s most critical resource. With such high premiums, Web3 naturally incentivizes being first, no matter the cost, to wear the crown of legitimacy.
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Second, Web3 infrastructure is primitive, limiting product differentiation and UX advantages—leaving little room for micro-innovation. Copycat projects thus struggle to gain late-mover advantages.
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Third, Web3 user acquisition prioritizes tokenomics over UX. The primary way to grow in Web3 is through token incentives; traditional growth tactics are secondary. Copycat projects typically enter only after seeing a legitimate project succeed in the crypto market. By then, they face not just the original’s user base and brand strength, but also the powerful flywheel effect of its established token economy—a formidable barrier. Under such asymmetric pressure, conventional user acquisition methods are ineffective. To compete, many copycats resort to unsustainable high-reward schemes, inevitably leading to collapse.
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Fourth, the premature maturity of crypto markets encourages irresponsible pseudo-innovation. Many Web3 projects needn’t prove viability—they can execute a quick pump-and-dump and profit regardless of whether their innovation makes sense or is sustainable. Why worry about credibility? The more shocking and novel the claim, the better.
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Fifth, extreme market volatility makes being a follower riskier than being a category leader. In Web2, stable periods last longer, giving leaders consistency and followers time to catch up or even surpass them. In Web3, stability and chaos switch unpredictably. Often, before a copycat launches, the original has already collapsed and the category invalidated. No matter how good your idea, the market won’t accept it anymore.
Due to these factors, the “be first at all costs” mentality is stronger in Web3, with far more projects claiming pioneering innovation than in Web2. But note: this is mostly lip service. Truly solid, executable projects are few. In fact, statistically, the proportion might not even exceed that of Web2, which is already in decline. An objective reason is that immature Web3 infrastructure severely limits genuine innovation space. Thus, the reality of Web3 innovation is that nearly every project wears an innovation halo, but insiders know only a handful will ever deliver.
That’s the summary. When we launched Solv in 2020, we didn’t grasp all this. Initially, we intended to build a copycat project with minor tweaks—pure Web2 thinking. But we had one baseline: we wanted a credible, implementable project. If we couldn’t believe in it ourselves, relying solely on hype, we simply couldn’t do it. As we explored possible clones, we stumbled upon a technically feasible innovation path—leading to ERC-3525. While gaining market recognition for our innovation was relatively easy, the real challenge was building a viable business around it—that part was truly hard.
Solv V1: An Accidental Start
Solv began between August and October 2020 during a series of internal discussions. It was the peak of Chinese-market DeFi cloning, and some clone projects had made money, so we considered cloning a major project with minor improvements. That was our sole ambition—no desire to pioneer. One of our earliest investors even criticized us as “too rational, not crazy enough.”
We targeted MakerDAO for three reasons:
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First, MakerDAO was still the largest DeFi project at the time.
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Second, no clones existed yet.
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Third, Ross Ulbricht, the Silk Road developer then in prison, wrote a blog post suggesting several potential improvements to MakerDAO (though later proven largely incorrect).
We spent weeks studying MakerDAO and proposed six improvement points.
But as mentioned earlier, we held high standards for feasibility. After deep analysis, we convinced ourselves that our proposed improvements in the “digital central bank” track were fundamentally flawed, so we completely abandoned the idea of cloning MakerDAO.
However, one idea stood out: turning MakerDAO’s “vaults” into NFTs, making ownership transferable. This caught our attention, though it served little purpose in MakerDAO’s context—who would sell their own bank account or deposit slip?
But we realized these NFTs were fundamentally different from existing gaming or collectible NFTs. These were essentially financial rights instruments or financial bills. Across DeFi at the time, no one used NFTs as financial instruments, nor was there a token standard suitable for representing them. Could this be an opportunity?
At the time, we only vaguely sensed that if such financial NFTs could be split and merged, they might find utility in DeFi. But when pressed to name a concrete use case, we couldn’t find a compelling one. Still, we took a gamble: regardless of the uncertainty, we’d push forward technically. Our reasoning? Many innovations start this way—logically plausible, seemingly useful, even if applications aren’t fully clear. Just build the tech first, then find uses. Some eventually succeed. So we raised a small round from friends and dove in. Honestly, we were nervous. We knew building tech before identifying use cases was risky—even speculative. Our worst fear: completing the technology but failing to find any practical application, leaving us with no product direction.
Our fears weren’t unfounded. Technically, we progressed rapidly, finalizing a splittable NFT concept by December 2020 and initiating the EIP process. By March 2021, we had a working prototype. Looking back, the technical journey wasn’t smooth—we spent 23 months, revised four times, before finalizing the ERC-3525 standard we’re proud of. It supports not only splittable NFTs but also value transfers between bills, plus optimizations for visualizing on-chain and off-chain data. The result surpassed our initial expectations: ERC-3525 isn’t just tokenized bills—it’s tokenized accounts, portfolios, digital containers, and even smart contracts, with extraordinary flexibility. But the existential question remained: where could we immediately deploy it? This challenge haunted us. Failure meant contributing to the ecosystem without commercial payoff—“making clothes for others.” Such outcomes aren’t rare in Web2 or Web3. We hoped to do better.
We split efforts: one team focused on technical breakthroughs, the other on exploring use cases. Initially, this exploration was funding-driven—engaging investors helped validate our ideas.
Our first envisioned scenario was term lending. Yes, after failing to clone MakerDAO, we turned to Compound and Aave. Since Compound and Aave only supported demand deposits, we aimed to create bearer term deposits, allowing users to earn higher interest. If users needed early access, they could resell the deposit (discounting) for liquidity.
We pitched this to investors. Surprisingly, many questioned fine details of financial logic, especially interest rate design. This was right after DeFi’s November 2020 downturn, when institutions intensely scrutinized financial soundness, fearing minor flaws could invalidate entire projects.
This level of scrutiny was unusual—both before and since—but encountering it then was both grueling and fortunate. It forced rigorous validation rather than hand-waving. Interestingly, while investors debated rate discovery, we ultimately realized that wasn’t the core issue. The fatal flaw was pricing and liquidity challenges caused by sudden liquidation risks.
In short, the envisioned use case died in the womb. We were anxious. Then, an investor suggested: Why not tokenize SAFT agreements with your tech?
He added that he’d happily use such a product. This was our first suggestion from the market—or potential users—so we took it seriously and rushed to build it, accidentally birthing Solv V1: Vesting Voucher.
SAFT stands for Simple Agreement for Future Tokens—a contract between investors and Web3 projects. After investing, the project distributes tokens per the SAFT schedule. Usually manual, we automated this using our financial NFT tech.
Specifically, projects wrap investors’ token entitlements into a Vesting Voucher—a time-locked vault holding full tokens, unlockable only per schedule (e.g., linear release or staged unlocks). Investors gain peace of mind against default and can transfer part or all of their voucher before unlocking, creating a convenient, secure, transparent secondary market for token allocations.
Solv V1 achieved moderate success, issuing over $40 million (at issuance price) in Vesting Vouchers, but fell short of expectations. Why? Mainly because V1 primarily benefited investors. They gained flexibility—early transfer, splitting, or holding—making them confident and satisfied.
But for projects, while they appreciated the tool, they found it too rigid. Not that they intended to default, but human nature prefers retaining emergency options.
Moreover, many projects felt uneasy about a parallel allocation transfer market emerging alongside token trading. Since SAFTs already enabled fundraising, most saw no incentive to adopt Vesting Vouchers. Meanwhile, investors lacked mechanisms to collectively demand project adoption.
Thus, V1 exposed a critical flaw: overly narrow asset creators—severe supply-side limitations. Beyond projects, no other party held large token allocations. Once project motivation waned, no alternative sources emerged. Without supply, even superior tech becomes useless.
Solv V2: Poor Timing, Promising Future
During this period, as ERC-3525 matured, semi-fungible tokens (SFTs) became increasingly robust. Yet the contradiction between technical power and lack of practical applications grew starker. From late 2021 to mid-2022, we held numerous internal debates exploring potential use cases:
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A free SFT secondary market, allowing users to freely create and trade SFTs;
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NFT fractionalization via ERC-3525;
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NFT installment purchases;
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NFT group buys;
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Futures, options, and leveraged contracts;
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Prediction markets on ERC-3525 tickets;
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An eToro-style portfolio copy-trading platform;
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ERC-3525 game cards;
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Dynamic art via ERC-3525, etc.
We debated each idea extensively, internally and externally. To avoid self-deception, we sometimes role-played opposition—someone deliberately attacking ERC-3525’s value, dismissing marginal uses as worthless, demanding undeniable proof of utility.
Across discussions, everyone agreed: ERC-3525 is powerful and flexible, bound to be significant someday—but in concrete scenarios, issues arise: unclear advantages, high gas fees, fierce competition, high user education costs, incomplete infrastructure, or poor secondary market liquidity. Internally, we agonized: Did we build a beautiful but useless toy?
What pulled us out of confusion was customer insight. From V1, we’d engaged many projects, deeply understanding their needs. A common desire emerged: beyond token fundraising, they wanted debt financing.
Wasn’t V1’s main problem insufficient supply?
With debt instruments, that wouldn’t be an issue. Projects hesitant to issue Vesting Vouchers eagerly embraced bond issuance. So in late 2021, we returned to our original idea: term lending. But this time, our target audience was clearer, messaging simpler, goal sharper—help Web3 projects issue ERC-3525 “corporate” bonds. This became Solv V2. V2 supports various bond types: fully/collateralized fixed-term bonds, unsecured credit loans, convertible bonds with optionality—flexible forms, clear rights, highly programmable.
Before and during V2 development, we conducted extensive user and market research. Protocols like Maple, Clearpool, and TrueFi were seen as adjacent competitors and studied carefully. Though they didn’t issue bonds, their target customers and solved problems were similar. We saw this as positive—learning from V1, targeting an already-validated direction was safer and smarter.
How did V2 perform?
Initially well—quickly reaching over $30 million in issuance and trading volume. Had the industry developed healthily, we believed V2 could become a major market. But then came the industry-wide crash. Throughout 2022, starting with Luna’s collapse in May, followed by Three Arrows Capital’s bankruptcy in June, and FTX’s implosion in November—three consecutive blows devastated the market. Amid this upheaval, bond businesses revealed three weaknesses. First, project strength and creditworthiness severely deteriorated—willing to borrow but unable to collateralize. Second, lenders faced tight liquidity and rising anxiety, demanding higher collateral and security standards. Third, bond operations involved multiple centralized components, each becoming a potential vulnerability amid market downturns and eroding trust. Overall, as external markets collapsed, the lending market shrank rapidly, and V2 transactions stalled. Ironically, we’d debated how to eventually overtake adjacent leaders—only to see them collapse from defaults before we even scaled.
Still, we don’t view V2 as a failure. Long-term, we believe Web3 “corporate bonds” will grow into a massive market—especially with real-world assets (RWA) integration and maturing regulation. Unsecured credit lending and credit bonds will eventually emerge. The 2022 crash merely delayed this evolution. Once markets recover, we’ll resume refining V2 to seize the opportunity.
In sum, both V1 and V2 achieved respectable results for their time, earning investor and community recognition. We’ll continue developing both—when external conditions shift, they may experience significant growth. But in the current bear market, neither can break through. Regardless of external shifts, we must admit: right now, we still need to find ERC-3525’s breakthrough key.
Reflection: Key User Positioning and Value Proposition
Through V1 and V2, we gained four key insights:
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First, we built core technical capabilities around ERC-3525. While some EIPs take mere months from conception to approval, ours took 23 months because we relentlessly pursued the optimal balance between flexibility and simplicity—the sweet spot where minimal architecture enables maximal use cases. We’re confident our final ID-SLOT-VALUE three-layer structure achieves this ideal balance: richly expressive yet elegantly simple. Of course, ERC-3525 isn’t as straightforward as ERC-20 or ERC-721—using it correctly requires skill. Through prolonged refinement, we’ve cultivated a technically excellent team and built a secondary development framework enabling rapid creation of new ERC-3525-based products.
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Second, we built a battle-tested team. As a Chinese team operating globally, at our scale, we maintain full capabilities across tech, product, marketing, operations, and business development—compact but complete—capable of delivering real services and tackling challenging deals.
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Third, we deepened industry partnerships. Both V1 and V2 followed B2B models. Through product and business development, we forged strong ties with leading players across ecosystems. Many became partners; some became investors. Many early-stage Web3 startups aim straight for hit consumer products, avoiding deep industry collaboration, seeing it as slow and cumbersome. But our experience shows deep integration into this network is invaluable—not just relationship-building, but accessing information and resources essential for competitive advantage. It’s worth the investment.
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Fourth, we gained cross-boundary depth—bridging on-chain and off-chain worlds. A key evolution from pure crypto apps is integrating on-chain and real-world systems to optimize performance, security, transparency, and functionality. While the industry trend emphasizes decentralization, we believe Web3 will remain hybrid—each player finding their optimal balance. Products capable of bridging on-chain and off-chain boundaries technologically and operationally can offer more balanced, competitive solutions. In V2 development, we integrated with exchanges, market makers, custodians, and other key entities, enabling on-chain tokens and smart contracts to reflect and manage real-world realities across boundaries.
Therefore, when deciding to confront bear market realities and develop Solv V3, our accumulated technical, operational, and industry resources were incomparable to our early days. Our strategic options had vastly expanded. But deciding what to build remained a tough call. This sparked long, heated debates within the core team.
The breakthrough came from rethinking the most fundamental questions: Who is our customer? What problem do we solve for them?
In typical startup courses, instructors first demand you define your target customer, then identify their pain points—this is the “value proposition.” Often, this step takes minutes on a whiteboard before moving to templates. But in real entrepreneurship, those templates are easy—the real challenge is defining customers and value propositions.
Observers might say: If you don’t know your customer or value proposition, why start? But reality is, most startups—including copycat ones—don’t have clear answers at launch. Even after early traction, they must constantly revisit and refine these answers. It’s safe to say the top cause of business failure is unclear customers and vague value propositions.
Customer positioning is hard in Web2, harder in Web3. We’d even argue that founders who answer this quickly likely haven’t thought deeply. As previously noted, infrastructure is weak—your options are limited, most needs already addressed. Discovering new customers or markets isn’t easy. Plus, Web3 adds unique challenges—like customers vanishing overnight. You research, analyze, validate demand, define value, build relationships, maybe even launch—then suddenly, a market event occurs. You think it’s unrelated—then boom, your customer dies, your opportunity evaporates.
Value proposition is equally tricky. In an ideal world, you wouldn’t start without clarity. But in today’s Web3, waiting until everything is crystal clear means missing the window. Successful teams run while changing guns and retargeting mid-flight.
Still, this doesn’t mean skipping the exercise. Indeed, in V1 and V2, we didn’t think deeply enough about value propositions—our biggest regret pre-V3.
Like most DeFi projects, Solv is a marketplace, so we must address value propositions on both supply and demand sides. In other words, we need irresistible reasons for sellers to list here and buyers to purchase here.
In V1, we handled investor (demand-side) value well, but offered weak incentives to projects (supply-side). We tried communicating with projects to understand their pain points. In V2, we clearly addressed project (now demand-side) needs, but failed to attract capital providers (supply-side)—why should they buy high-risk project bonds? That became the core conflict, especially during market turbulence, where value propositions weakened severely.
After repeated reflection, we concluded: early-stage projects shouldn’t be our primary customers. In both V1 and V2, we targeted them, assuming we understood their mindset. But practice taught us: in today’s Web3, early-stage projects are poor target customers. First, most can’t provide quality assets. Second, many harbor strong speculation instincts—low or zero ethical floors when crises hit. Third, the crypto market still revolves heavily around BTC and ETH; chasing long-tail assets outside this mainstream isn’t optimal for the ERC-3525 ecosystem.
So who should we target? What needs do they have? Who are their counterparty? What problems can we solve? What value can we offer? Deep reflection on these questions led us to Solv V3.
(To be continued)
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