Author: HAOTIAN

Seeing @bitsmiley_labs has secured another $10M in new financing to accelerate its vision of launching the new Stable CoinbitUSD on BTC. So, what exactly does this BTCFiStable Coin project, affectionately known as "GRIN," aim to achieve? And what is its core technical framework? Why is the BTCFi market so highly regarded by the market? Next, let me share my thoughts:

1）The Decentralized Finance ecosystem of ETHhub originated from MakerDAO's DAI Algorithm stablecoin, ultimately fermented by Compound's lending platform governance incentives, igniting a wave of Decentralized Finance summer. bitSmiley #SMILE In order to seize the first-mover advantage in the BTCFi market, a combination of MakerDAO (DAI) and Compound (Lending) and other Decentralized Finance infrastructure, has respectively launched three major components:

1. bitUSD: an over-collateralized stablecoin protocol, similar to DAI. Users can deposit BTC into the bitSmiley Treasury to mint bitUSD. It adopts the bitRC20 standard to maintain high transparency and collaborates with ZetaChain to ensure native cross-chain bridges for seamless circulation within the entire ecosystem.

2、bitLending: The native Trustless lending protocol adopts a peer-to-peer atomic exchange technology to achieve transaction matching, while introducing an insurance system to optimize the shortcomings of traditional lending liquidation process;

3, Credit Default Swaps (CDS): Innovation Derivatives protocol, integrating NFT cutting CDS, and using aggregated Bidding method to improve the efficiency and fairness of the CDS market.

2. How to further experience its product components to evaluate. From specific to general, I mainly talk about two core technical points:

1. Native Cross-Chain Interaction in cooperation with @zetablockchain: ZetaChain is a POS blockchain built on Cosmos SDK and Tendermint PBFTConsensus engine, embedding a specific chain into the entire chain environment to provide a series of interoperability operations. Since Bitcoin does not have Smart Contracts, it can deploy a light node and perform longer signature operations based on the ECDSA Signature Algorithm. ZetaChain only needs to track and manage the UTXO on BTC to achieve secure Cross-Chain Interaction.

In addition, due to ZetaChain's Ominichain Smart Contract, which is aimed at the entire chain environment, after solving the Cross-Chain Interaction problem with the BTC network, theoretically, it can transparently manage the entire chain assets through its entire chain circulation environment.

2. bitRC20 standard, it looks like the BRC20 inscription standard. Yes, bitUSD borrows the asset issuance paradigm of inscription on BTC Mainnet. When users want to over-collateralization BTC, they can first bridge the asset to the bitSmiley official bridge. After the bitSmiley layer2 chain confirms the user's collateralized assets and undergoes Consensus verification, it will pass on the information of minting bitUSD to BTC Mainnet.

As traditional BRC20 coin issuance and minting require pre-set total supply, bitRC20 has added the Mint and Burn operations for the Stable Coin scenario to meet the needs of dynamically adjusting the supply. This is actually the significance of the indexer, and this alternative inscription issuance method is more likely to obtain practical application and empowerment for the project.

Above.

In the end, it is not difficult to see why mainstream capital is rushing into BTCFi, and decentralized finance infrastructure providers like bitSmiley are also eager to lay out.

On the one hand, everyone is watching the huge asset growth space in the BTCFi market. Calculated based on the current total lock-up of 1.6 billion U.S. dollars in the BTC network, it accounts for only 0.14% of the total market capitalization of BTC, which has 50-100 times the rise space compared to networks such as ETH and Solana. Its source of funds is not limited to on-chain, but also includes the off-chain demand behind the huge BTC+ETH ETF funds.

On the other hand, I believe that stablecoins, loans, derivatives, and other landing application strategies that master the core BTC assets will radiate throughout the entire chain environment. They will revitalize and lead innovation in the DeFi model and users of the entire chain environment.