BitCollateral

Unlock Your Bitcoin's Potential, Keep Your Keys

RSK Project Submission

Basic Information

  • Project Name:BitCollateral
  • Team Name:BitCollateral DAO
  • Project Category:DeFi
  • Submission Date:October 22, 2024

Project Overview BitCollateral is a decentralized lending protocol built natively on Rootstock that enables Bitcoin holders to access liquidity while maintaining their BTC exposure. The platform introduces a novel approach to Bitcoin-backed loans through smart contract automation and community governance.

Problem Statement Bitcoin holders face a common dilemma: they want to hold their BTC long-term but also need access to liquid capital. Current solutions either require:

  • Selling BTC (losing upside potential)
  • Using centralized lending platforms (custodial risk)
  • Complex cross-chain solutions (high fees and bridge risks)

Solution BitCollateral solves these problems by providing:

  1. Non-custodial lending directly on RSK
  2. Smart contract-based collateral management
  3. Automated risk assessment and liquidation protection
  4. Community-governed lending parameters

Technical Architecture

Smart Contracts

// Core contracts structure
1. VaultManager.sol
   - Manages BTC collateral vaults
   - Handles deposits and withdrawals
   - Implements safety checks

2. LendingPool.sol
   - Manages lending pools
   - Handles interest rates
   - Processes loans and repayments

3. PriceOracle.sol
   - Integrates price feeds
   - Provides real-time valuations
   - Triggers safety mechanisms

4. Governance.sol
   - Handles protocol parameters
   - Manages community voting
   - Controls upgrades

Key Technical Features

  1. Multi-signature Vault System

    • 2/3 multisig for large withdrawals
    • Time-locked operations
    • Emergency pause functionality
  2. Risk Management Engine

    • Real-time LTV monitoring
    • Dynamic collateral requirements
    • Automated liquidation prevention
  3. Cross-chain Bridge Integration

    • Secure BTC-RSK bridge usage
    • Stablecoin bridge integration
    • Multi-token support

Innovation & Unique Value

  1. Native Bitcoin Integration

    • Direct use of Bitcoin's security model
    • Lower fees through RSK
    • Simplified user experience
  2. Advanced Risk Management

    • ML-powered risk assessment
    • Dynamic interest rates
    • Automated safety mechanisms
  3. Community Governance

    • DAO-controlled parameters
    • Community-driven development
    • Transparent operation
  • Market Analysis

  • Target Users:

    • Long-term Bitcoin holders
    • DeFi participants
    • Institutional investors
  • Market Size

    • Bitcoin market cap: $1T+
    • DeFi lending market: $100B+
    • Potential addressable market: $50B+

Development Roadmap

Phase 1: MVP (Q4 2024)

  • Core smart contract development
  • Basic UI implementation
  • Security audit
  • Testnet deployment

Phase 2: Launch (Q1 2025)

  • Mainnet deployment
  • Initial lending pairs
  • Basic governance features
  • Community building

Phase 3: Expansion (Q2 2025)

  • Additional features
  • Cross-chain integration
  • Institutional tools
  • Market expansion

Technical Requirements

  1. Smart Contract Development:

    • Solidity
    • RSK Web3
    • OpenZeppelin contracts
  2. Frontend Development:

    • React.js
    • Web3.js
    • MetaMask integration
  3. Backend Services:

    • Node.js
    • PostgreSQL
    • Redis

Team Requirements

  • Solidity Developer (2)
  • Frontend Developer (1)
  • Backend Developer (1)
  • UI/UX Designer (1)
  • Product Manager (1)

Budget Estimation Total: 350,000 USD

  • Development: 200,000 USD
  • Security Audits: 50,000 USD
  • Marketing: 50,000 USD
  • Operations: 50,000 USD

Security Considerations

  1. Smart Contract Security

    • Multiple audit rounds
    • Bug bounty program
    • Formal verification
  2. Operational Security

    • Multi-sig governance
    • Timelocks
    • Emergency procedures
  3. User Security

    • Non-custodial design
    • Clear documentation
    • Risk disclosures

Community & Marketing

  1. Community Building

    • Discord community
    • Educational content
    • Ambassador program
  2. Marketing Strategy

    • DeFi ecosystem partnerships
    • Content marketing
    • Community incentives

Success Metrics

  1. Technical Metrics

    • TVL (Total Value Locked)
    • Number of active vaults
    • Transaction volume
  2. User Metrics

    • Active users
    • User retention
    • User satisfaction
  3. Financial Metrics

    • Protocol revenue
    • Lending volume
    • Default rates

Additional Resources

  • GitHub Repository (to be created)
  • Technical Documentation
  • User Guides
  • Community Guidelines