BounceBit, a Chinese ink-style Bitcoin re-pledge project, has recently received investment from Binance. However, how can BTC, which has no native network income, attract users to pledge or even re-pledge? Where does the revenue behind BounceBit come from? This article will take the architecture of BounceBit as the starting point.
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ToggleWhat problem does BounceBit want to solve?
Bitcoin currently has no native returns. BounceBit's goal is to provide Bitcoin holders with a network-native income structure similar to ETH by creating a staking ecosystem.
But where does the profit come from? The Bitcoin network is not like the Ethereum network that has native network income, so how to achieve the goal of "allowing Bitcoin holders to obtain income"? The answer is to create an ecosystem first.
Introduction to BounceBit
BounceBit Ecological Architecture
BounceBit is a Bitcoin ecosystem project, which can be divided into BounceBit Protocol and BounceBit Chain:
- BounceBit Protocol is a pledge protocol that serves as the capital entrance for the entire ecosystem. Users can pledge BTC and stablecoins and other assets, and obtain liquid pledge tokens (BounceBit BTC, BBTC) as proof of pledge.
- BounceBit Chain is a PoS Layer1 network on which various applications are built, including decentralized exchanges, decentralized lending protocols, etc. Users can choose to use liquid pledged tokens for on-chain services, or pledge them to BounceBit Chain to protect network security to obtain more income and liquidity re-staking tokens (stBBTC).
By building an ecosystem from scratch, BounceBit has successfully turned BTC into an asset with native network returns.
BounceBit's infrastructure has been carefully designed to elevate Bitcoin's status from a passive asset to an active income-generating instrument.
BounceBit Protocol
Because it is compatible with the EVM network, in addition to the Bitcoin network, BounceBit Protocol can also receive assets on Ethereum and BNB Chain. The user experience is relatively friendly, and only MetaMask is needed to interact with the protocol.
After users pledge their assets, they will receive liquid staking tokens (LST), such as BBTC, BUSDT, BETH and other tokens. These tokens can be used to cross-chain and participate in applications on BounceBit Chain.
In order to allow users to pledge Bitcoin and other assets with greater peace of mind, BounceBit seeks external custodians to increase market trust. Because the Bitcoin network does not have a native virtual machine, many operational logic related to asset services are not protected by the blockchain consensus, which means that project parties can basically steal user assets if they want to do evil. In order to allow users to pledge assets with more confidence, BounceBit cooperates with third-party custodians such as Mainnet Digital and Ceffu to improve user asset security through the CeFi hybrid DeFi architecture.
BounceBit Chain
BounceBit Chain is a PoS Layer1 network. The network's verifiers pledge BTC and its native BounceBit BTC to protect network security. This is an EVM-compatible network that uses dual token staking to protect security. Currently, the network The road is still in the testnet stage.
Users can cross-chain the above-mentioned BBTC, BUSDT, BETH and other tokens to BounceBit Chain and invest assets in DeFi applications on it to earn income. They can also choose to re-pledge BBTC to protect network security and obtain liquidity and re-pledge tokens. Coin (LRT) participates in other applications to further amplify the benefits. Of course, you can also choose to deposit it into CeFi’s revenue pool.
In order to maximize the value generated by the ecosystem (so that more users will pledge assets), BounceBit announced that it will also launch the BounceBit App Store, allowing users to more easily use on-chain services; for developers or project teams, you can use BounceClub is designed to better develop apps and reach users.
The future goal is to create a complete Bitcoin staking ecosystem
In addition to the current architecture mentioned above, BounceBit's long-term goal is to integrate other Bitcoin re-staking infrastructure and become the infrastructure layer for these re-staking projects. It is hoped that this will allow the Bitcoin ecosystem to develop more rapidly.
A new route that is different from routines
At present, most application design directions in the Bitcoin ecosystem are mainly to build infrastructure based on Layer 2 architecture on the Bitcoin network. BounceBit is creating a new Layer 1 ecosystem and creating value on the network through a large number of applications, allowing Bitcoin to become a token with staking returns.
BounceBit puts the value of EVM applications on BTC.
However, from the above structure, it is not difficult to see that the assets of the entire ecosystem are pledged layer by layer, and the risks will also increase accordingly. Whether there is a problem with BounceBit Protocol, Mainnet Digital, Ceffu, cross-chain bridge, BounceBit Chain or any application on the chain, user assets may be compromised, so participants need to pay special attention.
