> ## Documentation Index > Fetch the complete documentation index at: https://docs.writz.xyz/llms.txt > Use this file to discover all available pages before exploring further. # Research: Market Landscape - BTCfi + Privacy on Stellar **Author:** Justin (Business Analyst) **Date:** 2026-06-22 **Status:** Complete - initial survey (updated 2026-08-04: Solv Protocol + Templar Protocol findings - see dated addendum in Competitive Analysis) *** ## BTCfi Market ### Growth trajectory Bitcoin DeFi has been one of the breakout trends of the 2024–2025 cycle: | Date | BTCfi TVL | | - | - | | January 2024 | \$304M | | December 2024 | \$7B+ | | Mid 2025 | \$8.6B+ | That is a **28x growth in 18 months**. The market is expanding fast and still early. ### What is driving growth * Bitcoin holders want to generate yield without selling BTC or giving up custody * Institutional interest in BTC-collateralized lending (cleaner regulatory profile than altcoins) * Maturing cross-chain infrastructure making BTC accessible on other chains * Bitcoin's "digital gold" narrative evolving toward "productive asset" ### Current BTCfi players | Protocol | Chain | Mechanism | Privacy | | - | - | - | - | | WBTC (BitGo) | Ethereum | Custodial bridge | None | | tBTC | Ethereum | Threshold signatures | None | | Aave (WBTC collateral) | Ethereum | Lending | None | | Compound (WBTC collateral) | Ethereum | Lending | None | | Stacks (sBTC) | Stacks L2 | Threshold bridge | None | | RSK (RBTC) | RSK sidechain | Federated peg | None | | Starknet (strkBTC) | Starknet | ZK-powered | Partial | | Interlay (iBTC) | Polkadot | Collateralized vaults | None | | Solv Protocol (SolvBTC) | Ethereum, BNB, Arbitrum, **Stellar (Soroban, live)**, +7 others | Custodial: 3rd-party custodians + FROST threshold-signature reserve network, NAV oracle | None (blacklist/pausable token, built for compliance not privacy) | | Templar Protocol | NEAR (native BTC lending, mainnet) - Soroban vault also live on Stellar today, but XLM-collateralized only | NEAR side: MPC/chain-signature Bitcoin light client, no wrapping. Stellar side: curator vault + Blend adapter (Upshift infra) | None | **Key observation (updated 2026-08-04):** Ethereum and Bitcoin L2/sidechains still dominate BTCfi by volume, but **the "None are on Stellar" claim from the original June survey is no longer accurate** and should not be reused as-is. Two Stellar-relevant players now exist: * **Solv Protocol** already runs an audited SolvBTC deployment on Soroban mainnet with real trading volume ($179K/day Q4 2025 → $372K/day Q1 2026 per Messari). It is fully custodial/wrapped, not privacy-preserving - it doesn't compete with Writz's trust model, but it kills the "we're the only BTCfi thing on Stellar" talking point. * **Templar Protocol** is the sharper risk: it already proved native-BTC lending *without wrapping* on NEAR (via Bitcoin light client + MPC chain signatures, \$4M pre-seed, audited, mainnet), and separately already has a live, Halborn-audited Soroban vault on Stellar (via Blend, currently XLM-collateral only) plus a cross-chain bridge (`omni-sdk`) that explicitly lists Stellar among its supported chains. They have not yet connected native BTC collateral to the Stellar vault - but all the components exist in their own GitHub org today, and their core `contracts` repo is under active daily development. Neither currently offers **ZK-private** BTC-collateralized borrowing on Stellar - that claim still holds. But the clean "no BTCfi exists on Stellar" framing needs to retire; the differentiator has to be privacy + trustless SPV specifically, not first-to-Stellar. *** ## Privacy Market ### Why privacy matters in DeFi Public blockchain DeFi has a fundamental problem: every position, every trade, every liquidation threshold is visible to anyone. This creates: * **Front-running:** Bots watch liquidation thresholds and exploit them * **Competitive intelligence leakage:** Institutional players don't want competitors seeing their positions * **Personal financial exposure:** Individuals don't want their net worth and borrowing behavior public * **Regulatory uncertainty:** Some jurisdictions treat DeFi activity differently based on public visibility ### Privacy in crypto - 2026 state Zero-knowledge proofs have moved from experimental to practical infrastructure: * Proof generation is orders of magnitude faster than 2022 - GPU/FPGA-accelerated provers produce basic proofs in milliseconds * ZK has gone from research tool to production infrastructure (Starknet, zkSync, Aztec, etc.) * The regulatory conversation has shifted toward "selective transparency" - private by default, auditable on request ### Stellar's privacy position Stellar launched **Protocol X-Ray** in January 2026, making it uniquely positioned: | Feature | Detail | | - | - | | **ZK proof verification** | Noir circuit proofs verifiable inside Soroban smart contracts | | **Stellar Private Payments** | Open-source framework: private deposits, transfers, and withdrawals using Groth16 ZK proofs | | **Compliance hooks** | Association Set Providers (ASPs) enable selective disclosure to regulators - "open by default, private when needed" | | **Protocol 24 roadmap** | Confidential assets are the next milestone - Stellar views privacy as a multi-year buildout | Stellar is the only major blockchain with ZK privacy infrastructure that is simultaneously **compliance-friendly**. This is critical for institutional adoption. *** ## Stellar Ecosystem ### Key metrics (2025–2026) * **USDC volume:** \$500M/month on Stellar - the dominant stablecoin, real usage not speculation * **Network operations:** Surpassed 1 billion network operations in Q3 2025 * **Soroban maturity:** Smart contracts moved from early experimentation to production-grade deployments * **RWA tokenization:** Hit \$3B target set by SDF * **Protocol 23 (Whisk, Sep 2025):** Parallel smart contract execution - significantly faster network ### DeFi protocols on Stellar | Protocol | Type | BTC support | Privacy | | - | - | - | - | | Blend | Lending (Aave-style) | No | No | | Stellar DEX | Native AMM | No native BTC | No | | Various AMMs | Soroban-based | No | No | | Solv Protocol (SolvBTC) | Custodial BTC yield token | Yes - wrapped/custodial only | No | | Templar Protocol (Soroban Vault) | Curated lending vault on Blend (via Upshift) | No - XLM/RWA collateral, not BTC (yet) | No | **Gap (revised 2026-08-04):** No protocol on Stellar handles **real, non-custodial BTC** (native UTXO, SPV-verified, no wrapping) as collateral. Solv fills the "some form of BTC exists on Stellar" gap with a fully custodial wrapped token. Templar has live Soroban infrastructure plus proven native-BTC-without-wrapping tech (on NEAR) but has not yet combined the two. The specific gap Writz occupies - trustless SPV-verified native BTC + ZK-private positions, on Stellar - is still open. ### USDC + Stellar = unique combination USDC is the world's most regulated and trusted stablecoin. On Stellar, USDC is natively issued by Circle - not bridged. This means: * No bridge risk on the USDC side * Stellar USDC is the same USDC that businesses already use for payments, remittances, and treasury * Users borrowing USDC on Writz are getting a real, liquid, institutionally recognized asset This combination - real BTC collateral + real USDC output - makes Writz Protocol's value proposition immediately understandable to mainstream financial players. *** ## Competitive Analysis ### Direct competitors to Writz Protocol Nobody is building exactly what Writz is building. The closest analogues are: **On privacy + DeFi:** Aztec Network (Ethereum), Penumbra (Cosmos) - but none handle BTC natively and none are on Stellar. **On BTCfi:** Stacks, RSK, Interlay - but none have ZK privacy and none are on Stellar. **On Stellar DeFi:** Blend - but no BTC support and no privacy. ### Indirect competitors | Competitor | Why they're indirect | Writz advantage | | - | - | - | | WBTC on Aave | Custodial bridge, no privacy, Ethereum fees | Trustless, private, Stellar low fees | | tBTC | Complex threshold bridge, no privacy | Simpler UX, ZK privacy | | Blend | On Stellar, but no BTC | Same ecosystem + BTC + privacy | | Stacks sBTC | Bitcoin-native, but no privacy, no Stellar | ZK privacy, USDC output | | Solv Protocol (SolvBTC) | Live on Stellar, real volume, but fully custodial + no privacy - targets USDC holders wanting BTC yield, not BTC holders wanting private loans | Trustless custody (user's own P2WSH), ZK-private positions, opposite flow direction | | Templar Protocol | Native-BTC-no-wrap tech proven on NEAR + live Soroban vault infra on Stellar already - closest thing to a credible fast-follower if they connect the two | Writz keeps BTC in the user's own script and verifies it with a light client on Stellar, where Templar relies on MPC threshold custody; the execution gap is smaller for Templar than for a from-scratch entrant | ### The competitive moat Writz's moat is **technical first-mover advantage in a specific niche**: 1. First Bitcoin SPV client on Soroban - takes 12–18 months to build and audit 2. First integration of Stellar's ZK privacy (Protocol X-Ray) with BTC collateral 3. Open SDK creates ecosystem lock-in - once Stellar wallets/protocols build on Writz SPV, switching is costly ### Update - 2026-08-04: Solv Protocol + Templar Protocol findings Deeper research (prompted by evaluating a potential Solv integration) surfaced two corrections to the picture above: **Solv Protocol** is live on Stellar Soroban mainnet (`solv-finance/SolvBTC-Stellar-Contract`, audited, real trading volume). It does not threaten Writz's moat directly - SolvBTC is custodial (third-party custodians + FROST threshold-signature reserve, NAV oracle, blacklist/pausable token) and serves the opposite customer flow (USDC holders wanting BTC-denominated yield, not BTC holders wanting private loans). Its relevance is narrative, not architectural: it retires the "nothing BTC-related exists on Stellar" talking point and means Writz has to lead with "trustless + private," not "first." **Templar Protocol** is a more serious signal. On NEAR, it already runs a mainnet, audited, \$4M-pre-seed-funded lending product that takes **native BTC as collateral with no wrapping**, using a Bitcoin light client plus MPC/chain-signature threshold custody (NEAR's chain-abstraction stack) instead of Writz's SPV-proof + P2WSH-covenant approach - architecturally different (MPC threshold trust vs. pure cryptographic verification) but marketed with similar "no custodian, no wrapping" language. Separately, Templar already has a **live, Halborn-audited Soroban vault on Stellar** (via a Blend lending-market adapter, part of Upshift's multi-chain vault rollout), currently limited to XLM collateral. Its own `omni-sdk` bridge already lists Stellar among its 10+ supported chains, and its core contracts repo shows same-day commit activity as of this writing. Templar has not yet routed native BTC collateral into its Stellar vault - but every component needed to do so (BTC light client, MPC custody, cross-chain bridge with Stellar support, audited Soroban vault) already exists in their GitHub org. This is the most credible fast-follower risk identified so far - closer and faster-moving than Babylon Labs (no Stellar presence at all) precisely because Templar's Stellar infrastructure is already shipped, audited, and live; only the BTC-collateral wiring is missing. **Corrected 2026-10-26:** this update originally called the combination of native-BTC verification without wrapping and ZK-private position sizes Writz's "unreplicated core claim". That no longer describes the product: Writz v1 has no privacy (positions are public on chain; privacy is a separate, later edition), and its cooperative release path uses a protocol co-signing key. The differentiator Writz states is native BTC collateral without custody or wrapping: the BTC stays in the user's own script with a time-locked exit to the user's key alone, and Stellar verifies it through an SPV light client. Babylon also keeps Bitcoin in the owner's own script with a time-lock exit, so Writz does not claim a stronger custody guarantee than Babylon; it differs by lending against that Bitcoin on Stellar. What this update found still holds: Templar shortens the window before someone else assembles the pieces. *** ## Market Sizing ### Total Addressable Market (TAM) **BTCfi TAM:** $8.6B TVL and growing. If Writz captures 5% of BTCfi TVL by 2028, that is $430M+ in TVL. Protocol revenues at 1–2% annualized on TVL = $4.3M–$8.6M/year from lending alone. **Privacy DeFi TAM:** The privacy DeFi category is emerging. Aztec raised $100M. Penumbra raised $23M. The market for private financial infrastructure is early but large. **LATAM remittances (future product):** \$150B/year market where Stellar already has distribution. BTC→USDC private remittances would be a natural extension after the core protocol is established. ### Serviceable Addressable Market (SAM) Near-term realistic targets: * Bitcoin holders on Stellar-adjacent ecosystems (existing Stellar users with BTC) * Privacy-conscious individuals in LATAM with BTC savings * Crypto-native companies needing ZK Proof of Reserve (post-FTX demand is structural) * Stellar DeFi protocols wanting BTC exposure *** ## Timing Assessment **Why now:** 1. Protocol X-Ray launched January 2026 - the ZK infrastructure is production-ready TODAY 2. BTCfi is in a growth phase - early but proven market 3. Stellar has real USDC liquidity - not a chicken-and-egg problem on the output side 4. Soroban has matured - Protocol 23 brought parallel execution; smart contracts are production-grade 5. The summa-tx Rust SPV library exists - no need to build cryptographic primitives from scratch **Window:** 12–18 months before a well-funded competitor could plausibly replicate the SPV + ZK combination on Stellar - holds for a from-scratch entrant. **Revised for Templar Protocol specifically (2026-08-04):** their Stellar Soroban vault infrastructure and cross-chain bridge are already live and audited, and their native-BTC-no-wrap lending tech is already proven on NEAR mainnet. They are missing (1) the BTC-to-Stellar routing and (2) ZK privacy - neither trivial, but both are integration/feature work on top of shipped infrastructure rather than from-scratch builds. Treat their effective window as materially shorter than 12–18 months; testnet-to-mainnet speed on Writz's side is a competitive variable against Templar specifically, not just a generic risk. *** *Last updated: 2026-08-04 (Solv Protocol + Templar Protocol competitive findings added - original survey dated 2026-06-22)* This documentation is built and hosted on [Mintlify](https://mintlify.com), a developer documentation platform.