What is bitSmiley?

Introduction to bitSmiley Project

Founded in 2023, bitSmiley is a Bitcoin-native DeFi project and the first stablecoin project in the Bitcoin DeFi ecosystem, often referred to as the “Compound + MakerDAO” for Bitcoin. bitSmiley has introduced innovations at both the application and protocol layers, with its groundbreaking Fintegra framework comprising three main components: a decentralized stablecoin protocol (bitUSD), a peer-to-peer lending mechanism (bitLending), and an advanced derivatives platform. By introducing the native over-collateralized stablecoin bitUSD on the Bitcoin blockchain, bitSmiley provides a stable value-pegged tool that enhances Bitcoin’s utility, expanding its role beyond just a store of value.

bitUSD — An Over-Collateralized Bitcoin-Based Stablecoin

bitUSD is the core component of BitSmiley, a USD-pegged over-collateralized stablecoin. By managing Bitcoin’s price volatility, bitUSD enables stable payments, lending, borrowing, and yield generation on the Bitcoin network. The over-collateralization mechanism in bitUSD is similar to MakerDAO’s:

1. Users over-collateralize BTC on the Bitcoin mainnet.
2. An oracle transmits information to Layer 2 (L2). The bitSmileyDAO on L2 then verifies this information via consensus and instructs Bitcoin mainnet validators to mint bitUSD, enabling its issuance on Bitcoin.
   
   The redemption process mirrors the minting logic; once users retrieve their collateral, the corresponding bitUSD is burned. Unlike MakerDAO, which covers bad debts by minting MKR (thus diluting MKR holders), bitSmiley holds English auctions of future platform revenue to cover debts. Profits beyond basic operational costs are first used to repay creditors.

bitLending — Peer-to-Peer Lending Protocol

bitLending operates similarly to other peer-to-peer lending protocols. Lenders can post loan offers on bitLending, specifying the type and quantity of bitRC-20 tokens they are offering, the loan term, and interest rate. Borrowers can choose offers that match their needs. Once a match is made, bitLending creates a multi-signature address for fund transfers. Both lender and borrower transfer assets to this address, and after network consensus verification, the borrower can withdraw the loan.

CDS — Risk Management Derivatives

Credit Default Swaps (CDS) are powerful tools in traditional finance for risk management, credit evaluation, arbitrage, liquidity, and pricing efficiency. However, CDS has been absent in the Ethereum DeFi ecosystem, primarily due to Ethereum’s pool-based lending model, while CDS operates on a peer-to-peer basis. bitSmiley’s native BTC peer-to-peer lending is a better fit for CDS derivatives. CDS can bundle multiple loans with similar risk characteristics into a CDS asset portfolio, ensuring the safety of the guarantor’s funds while offering speculative potential—a rare additional layer of security in DeFi protocols.

bitSmiley’s Funding Background

Currently, bitUSD has over 20,000 on-chain wallet addresses and a total value locked (TVL) exceeding $30 million. It has partnered with more than 40 projects, leading the space in funding, liquidity, and data performance.

• March 4, 2024: BitSmiley completed a strategic funding round, amount undisclosed.
• October 28, 2024: BitSmiley completed a $10 million Series B funding round led by ABCD, with participation from MH Ventures and Skyland Ventures.

bitSmiley Tokenomics

$bitSmiley: Governance Token

Decentralized Governance: $SMILE holders can participate in platform governance, including adjusting key protocol parameters (e.g., collateral types, loan-to-value ratios) and triggering emergency shutdowns in case of uncontrollable attacks.
Surplus Auction Participation: When platform surplus exceeds a certain threshold, it will be auctioned below market price exclusively for $SMILE holders.
Fee Discounts: Users can pay stability fees at a discount with $SMILE tokens.
Priority Liquidation Rights: $SMILE holders surpassing a threshold are added to the liquidators’ whitelist, granting priority in liquidating bad debt on the platform.

Token Distribution

The total supply of SMILE is 210 million tokens, following the ERC-20 standard.

• User Incentives: 21.5%
• DAO Allocation: 26%
• Investors: 16%
• Team and Advisors: 12.5%

How to Claim $SMILE Airdrop

A total of 2.1 million SMILE tokens are set aside for users who participated in the Merlin Chain and Bitlayer testnets, with eligibility requirements as follows:

1. Open a Vault and mint bitUSD on either the bitLayer or Merlin testnet.
2. Add at least 500 bitUSD single-sided liquidity for the bitUSD-WBTC pair on bitCow (based on a BTC price of $70,000).
3. Engage in interactions with bitCow.
   For NFT Holders: The first asset under the bitRC-20 protocol is the OG PASS NFT (bitDisc). The bitDisc is available in two tiers: the Gold Card (bitDisc-Gold, limited to 100 copies) and the Black Card (bitDisc-Black, limited edition, public free mint). Staking the bitDisc-Black can earn users bitJade, enabling access to airdrops, points, and more.
   Visit the bitSmiley website https://www.bitsmiley.io/, connect your wallet to claim airdrop rewards.

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