The Bitcoin ETF has been approved for three months, and last week it also experienced the Bitcoin halving. The launch of the Rune Protocol has attracted more and more people to pay attention to and participate in the Bitcoin ecosystem, potentially reaching a new height. The overall funding in the Bitcoin ecosystem is also increasing, and the strong demand for Bitcoin ecosystem trading from both institutions and retail investors will give rise to a series of infrastructure developments.

Although Bitcoin occupies an important position in the market, the current DeFi space still faces challenges in utilizing its liquidity. Currently, Layer 2 solutions and Bitcoin DeFi platforms are still in their early stages, and Bridge technology mainly focuses on connectivity issues. Moreover, most DeFi protocols primarily target ERC-20 assets, and there has not been sufficient effort to create corresponding application scenarios for a massive market like Bitcoin. Among them, BTC stablecoins represent a newer track, as stablecoins can leverage the BTC ecosystem, increasing its liquidity. Next, we will introduce a new BTC stablecoin project @LambdaFinance.

Project Introduction

Lambda Finance is a Bitcoin-based USD stablecoin protocol that transforms Bitcoin's potential liquidity into a composable and capital-efficient stablecoin, btcUSD, allowing holders to realize DeFi yield opportunities. Users can mint btcUSD stablecoins using their Bitcoin and redeem them for the underlying collateral at a 1:1 ratio at any time. btcUSD is fully backed by over-collateralized debt positions and employs a soft liquidation mechanism to protect users' assets.

Investment and Team Information

The angel round has been completed, raising $1.8 million, with notable investors including Michael Egorov, the founder of the well-known stablecoin project Curve @newmichwill, Hashcow Group @aladdinDAO, and @bambalados from Conflux network. Our Bitcoin Square is also a strategic investor in this project. The team members are experienced, including the founder of Curve Finance, who serves as both an investor and project advisor.

Technical Details

btcUSD is the first licensed fork of Curve Finance's crvUSD, inheriting all the innovative features and competitive advantages of crvUSD, including the following characteristics:

1. Soft Liquidations: When the price of Bitcoin drops, Lambda Finance will gradually sell off collateral to reduce risk and replenish collateral when the price of Bitcoin rebounds, ensuring the system remains solvent.
2. Autonomous Market Operators: Lambda Finance can mint and burn btcUSD in liquidity pools to adjust its peg to the dollar and earn liquidity provider fees through this process.

3. Adaptive Interest Rates: Real-time adjustments of borrowing rates to influence supply and demand dynamics, maintaining the stability of its currency unit pegged to $1.

Product Features

1. Resilient: A defense mechanism that adapts and responds in real-time to market conditions; no need to wait for decoupling to react; no forced liquidations + large-scale liquidations + collateral + debt redistribution; no slow governance voting rates. Achieves dynamic equilibrium while keeping the peg stable around $1.
2. Minimal Liquidation Risk: Bitcoin holders can leverage their assets for borrowing, aiming to go long on Bitcoin and utilize its liquidity for various trades. However, the current liquidation model contradicts this fundamental goal. With the soft liquidation mechanism provided by L.L.A.M.M.A, users can safely collateralize and leverage without worrying about liquidation risks caused by short-term volatility.
3. Self Sovereign: Users have complete control over their collateral. The redemption ratio is 1:1, and users can withdraw funds at any time. btcUSD only accepts Bitcoin equivalents as collateral, eliminating external risks posed by ERC-20 or stablecoins backed by real assets. At launch, Lambda will support $wBTC and @TheTNetwork's $tBTC, with plans to integrate @dlc_link's dlcBTC and other bridging derivatives and liquid collateralized BTC in the near future, creating lending options that support yield for BTC holders.

Conclusion

As the team says, "Bring Degen Back to Defi" is ready, the Bitcoin ecosystem has arrived, and the most exciting aspect of Lambda Finance is the launch of a brand new DeFi protocol that will allow any protocol to use Lambda to create a volatility/stability currency pair and lending market for its tokens in one stop. Let’s keep an eye on more details of this project in the future and embrace this gradually thriving Bitcoin ecosystem together.