Today, we’re thrilled to finally release DeCus into the world, a high capital efficiency cross-chain custody system based on innovative algorithms! After the blossom of DeFi applications in 2020, the demand of moving value across blockchains has become particularly strong, so our team set out to rethink how we could make it easier for more people to transfer any crypto asset between any blockchain.
Bringing liquidity of BTC to multiple DeFi applications on Ethereum is the first step for DeCus, so here comes eBTC, an ERC20 token backed 1:1 with real BTC. Powered by DeCus, eBTC provides a better solution of BTC-backed token with improved efficiency and decreased risk.
What makes DeCus different?
Actually, the idea of cross-chain portable assets has been proposed for years, while the existing solutions of BTC-backed token still suffer from two main issues:
•Centralization: Such BTC-backed tokens, like wBTC, are issued by a centralized party, so they may become irredeemable in case of a single point failure or censorship.
•Low utilization of collateral: Other BTC-backed tokens, such as tBTC and renBTC, are issued in a decentralized way, however, they have to design a high collateralization rate to mitigate the risk of fluctuation and misbehavior. For example, each minted tBTC-token requires collateral of value ≥1.5BTC, and each renBTC requires collateral value ≥3BTC. Such over-collateralization would significantly increase the cost of using BTC-backed tokens.
DeCus gives a different answer. The decentralized and self-regulated keeper network of the system enables eBTC implement a lower collateralization rate, with 30%-70% compared to the average more than 150% of other solutions, while still kept decentralized.
Lower collateralization rate means higher capital efficiency.
How does the system work?
Keepers are the core role of this system, who can undertake the custody of a large amount of crypto assets at a lower collateralization rate, with the security of custody still being guaranteed. The first batch of keepers will be selected by a-coming-soon Dutch auction. Please stay tuned.
Undoubtedly, users are the other crucial participants to accomplish the process of minting and redeeming eBTC. One user who wants to mint eBTC should first submit a request to the smart contract on Ethereum network and then get a multi-sig BTC address of a designated keepers group. After depositing a certain amount BTC to that multi-sig address and submitting the proof of deposit, the corresponding amount of eBTC will be sent to the user’s ETH address.
Users are able to convert their eBTC back to BTC at any time. The redeeming process is similar with minting. Once the original BTC is received, the corresponding eBTC will be burnt.
DeCus team want to make sure that our users always feel smart and in control when they are using DeCus to convert BTC, so we’ll continuously optimize user experience.
What can be expected in the future?
eBTC is designed to bring the liquidity of BTC to multiple DeFi applications. Once the whole system starts to work and eBTC starts to be used, DeCus team will try our best to accelerate the adoption of eBTC, like integrating with MakerDao, Compound and AAVE for lending demand, populating into Uniswap, Curve and Balancer for trading requirement. Actually, there are several top DeFi applications that have shown big interest on eBTC and would like to embrace this brand new BTC-backed token.
DeCus can go even further. After the successful launch on Ethereum, this solution can be expanded to more public blockchains such as Conflux, Nervos and Near Protocol, etc.
Security & Audit
Security is always the top priority at DeCus. Our core code is being audited by an industry-leading company. In addition, DeCus is working widely with several professional teams to test the financial infrastructure of the protocol: resilience to attacks by bad actors as well as incentives for honest participants.
But we still know that our protocol depends on new technology that may contain undiscovered vulnerabilities, so we encourage the community to audit our contracts and security. If you have any questions, ideas, or issues, join us on Twitter 👉 https://twitter.com/decusio — we’d love to hear from you.
Finally, I’d like to give a huge thank you and shoutout to the team for all the incredible outcomes! I can’t wait to start the next stage of work and see if we can make a difference!