Hello From Bitcoin Dollar,
We are a founding team of crypto veterans including former Founding Engineer - EtherFi, Head of Research - Bullish Treasury, Head of Credit - Credora, CTO - Keyring, Qenta, Alicenet. Backed by Polygon Labs and Coinme. We have built something novel and quite interesting and we hope you’ll take the time to learn about us.
Intro
Our flagship USD Vault is live on IPOR as the highest yielding USD opportunity on the platform. It produces a receipt token bdUSD. We are outperforming vaults across DeFi with significantly more looping leverage while our product performs a simple 2X Loop while programmatically maintaining 50% LTV.
We are unique because we take advantage of the fact that DeFi is structurally oversupplied with BTC and we borrow BTC to create our 2X loop rather than borrowing USD like everyone else. This is because our foundational token (BTCD and sBTCD) is a novel 50% BTC/50% USD collateralized token. Our yield engine is powered, in part, by harvesting BTC volatility.
For those familiar with Yield Basis, our mechanics will be familiar. They receive BTC deposits and pair crvUSD in a liquidity pool to create 2X leverage on a ~50/50 LP position. The crvUSD debt offsets the crvUSD in the liquidity pool leaving users with approximately BTC exposure. Our USD Vault receives USD deposits, flash loans wBTC to mint sBTCD and uses sBTCD as collateral against wBTC debt. The BTC exposure within sBTCD is cancelled by the wBTC debt leaving users with pure high yield USD exposure.
Important Risk Considerations:
BTCD is a collateralized token similar to Ethena. However, rather than a $1 peg, our peg is the constant product function of BTC/USD (think of a uniswap v2 pool holding USDC/wBTC). Importantly, only ~3% needs to be in the rebalacing engine at any time leaving ~97% of our backing assets auditable onchain in conservative yield earning strategies.
It is somewhat counterintuitive but worth recognizing that pegging to the constant product function is quite robust. As we know from the definition of impermanent loss, if our rebalancing engine were to fail during a BTC price crash or rally, our protocol would remain over collateralized. We would simply not be selling dollars into falling BTC or selling appreciating BTC for dollars when we should be. When systems come back online, we would make a large rebalancing trade that would harvest significant profit above peg. In normal times, our portfolio has a ~1% rebalancing tolerance meaning we are programatically buying low and selling high which out performs our peg as discussed in LVR research.
Proposal
We hope to build a mutually beneficial partnership with FRAX. bdUSD holders are willing to pay above market rates to borrow a non-yield bearing stablecoin to loop their position. These creates organic lending yields for frxUSD holders and AMO strategies while stimulating our TVL growth.
Additional collaboration opportunities:
- A portion of our underlying portfolio (currently $1.3M with organic 40% MoM growth) holds dollar yield strategies in our USD Sleeve and could be committed to frxUSD or sfrxUSD strategies.
- bdUSD/sfrxUSD curve liquidity pools
- Our soon to launch BTC Vault uses sBTCD as collateral to borrow a stablecoin 1:1 to create the same leveraged position as the USD Vault. Users receive yield bearing BTC (bdBTC) earning ~8% APY. This is another lending opportunity for frxUSD.
- Our bdBTC product could eventually collaborate with frxBTC as a growth partner/yield engine (we aren’t sure of the status of frxBTC so please inform us if this is a priority.)
- Frax Lend integrations.
We believe we have built something novel and interesting that can produce very compelling yields on USD, BTC and eventually ETH, RWA’s like Gold and tokenized stocks. Our protocol’s 50/50 composition is simple, powerful, and a bit counterintuitive. We are looking for big brained DeFi communities who might take the time to understand what we are building and help us grow while we are small so you can benefit when we are large.