The New Star in the BTCFi Craze: The Rise of an Innovative Stablecoin Project

Recently, a highly anticipated BTCFi stablecoin project secured a new round of financing of 10 million dollars to accelerate the development and implementation of its Bitcoin stablecoin bitUSD. This project, affectionately called "smiley face," is making waves in the BTCFi space. So, what exactly is it aiming to do? What is its core technology framework? Why is the BTCFi market so hot? Let's explore these questions together.

Core Components of the Project

This project draws on the essence of the Ethereum DeFi ecosystem, combining mature models such as MakerDAO and Compound, and has launched three main components:

1. bitUSD: This is an over-collateralized stablecoin protocol where users can deposit Bitcoin to mint bitUSD. It adopts the bitRC20 standard, ensuring high transparency, and collaborates with a cross-chain project to achieve circulation in a full-chain environment.

2. bitLending: This is a decentralized lending protocol that uses a peer-to-peer model and atomic swap technology to facilitate transaction matching. It also introduces an insurance system that optimizes the settlement process in traditional lending.

3. Credit Default Swap (CDS): This is an innovative derivative protocol that integrates NFT slicing CDS and uses an aggregated bidding method, aiming to improve the efficiency and fairness of the CDS market.

Core Technical Highlights

1. Native Cross-Chain Technology: This project collaborates with a POS blockchain based on the Cosmos SDK and Tendermint PBFT consensus engine to achieve secure cross-chain transactions with the Bitcoin network. This technology not only addresses the lack of smart contracts in Bitcoin but also paves the way for transparent management of on-chain assets.

2. bitRC20 Standard: This is an innovation similar to the BRC20 inscription standard. When users collateralize BTC, the project's layer2 chain will perform verification and then send a minting instruction for bitUSD to the Bitcoin mainnet. Unlike traditional BRC20, bitRC20 adds Mint and Burn operations to meet the demand for dynamically adjusting the supply of stablecoins.

The Appeal of the BTCFi Market

The BTCFi market is so popular for two main reasons:

1. Huge growth potential: Currently, the total locked value of the BTC network accounts for only 0.14% of its total market capitalization, which has 50-100 times more growth potential compared to other networks. This market includes not only on-chain assets but also the enormous off-chain demand behind the BTC+ETH ETF funds.

2. Strategic Position: Mastering core applications such as stablecoin, lending, and derivatives of BTC assets will influence the DeFi ecosystem of the entire blockchain environment. This will not only invigorate the existing market but also lead a new wave of innovation.

With the continuous emergence of such projects, the BTCFi sector is undergoing a profound transformation. This not only brings new application scenarios for Bitcoin but also injects new vitality into the entire cryptocurrency ecosystem. In the future, we may see more innovative projects emerging in this field, driving BTCFi towards a broader future.