I really didn't expect that everyone would be so interested in #BTCFi, so I'll say a few more words. First, in my understanding, my design is actually equivalent to:
BTCFi = BTC + STO + RWA + RWAFi + DeFi + PayFi
Specifically, BTC is actually a general term, not just #BTC, but a collection of #Bitcoin, which includes BTC, $MSTR, $COIN, and various BTC spot ETFs. However, considering the closer relation to native BTC, the three representative underlying assets were prioritized, which are BTC, MSTR, and $IBIT, these three 'BTC'.
The STO part is a very important part, and this STO is only formal. If it hasn't grown for a day, there’s no need to apply for an STO license. Conceptually, it talks about a fund or offshore company as the main body of the entire project, which after injection of capital goes to purchase BTC, MSTR, and IBIT, these three assets. The STO part is to issue tokens for the packaged assets.
It should be noted that if the issued token itself equals BTC, MSTR, and IBIT, it is 100% non-compliant. It will definitely be sued by the SEC. Therefore, what I do is take the total assets of the fund or offshore company as the anchor asset and issue tokens based on the total value of the three assets. If the fund has 1 million dollars of BTC, 1 million dollars of MSTR, and 1 million dollars of IBIT, then what I can do is issue 1 million ST (Stable) Tokens worth 1 dollar each. BTC is stBTC, MSTR is stMSTR, IBIT is stIBIT (the names are just made up, no need to get tangled in it, but those in the know should understand what I will ultimately do; just keep it to yourself, no need to say it out loud 🫢).
If the BTC purchased rises by 10%, then the value of stBTC rises from 1 dollar to 1.1 dollars. The same applies to declines. So the issuance of tokens is likely to occur after the late-stage STO compliance, allowing friends to directly purchase st assets with USDT or USDC, equivalent to purchasing MSTR or IBIT. The significance of buying stBTC is minimal. All assets are audited by Web2 auditing firms, with reports published monthly to ensure one-to-one correspondence of assets and funds. For users with larger amounts of funds, they can directly settle MSTR or IBIT. In fact, this system is almost identical in structure to Grayscale's GBTC and ETHE.
The RWA part is quite simple, which is to bundle BTC, MSTR, and IBIT into a synthetic asset. The asset itself includes both virtual and real-world compliant assets, and these assets can be traded in both Web2 and Web3. Shareholders can request to view all documents and accounts, and balance formulas will be calculated daily.
RWAFi integrates the three assets as an ETF. This ETF can be traded in the OTC market, and if the volume is large enough, it can also be traded on exchanges like NASDAQ, and even traded on-chain. This ETF directly reflects the value fluctuations of the three 'BTC' and has Web2 assets for certification. This ETF can support Staking and ReStaking and can be opened to individual DeFi projects as pledge targets.
DeFi itself is actually the foundation of STO and RWA, and even RWAFi is based on the premise of DeFi, so small-scale investors can directly trade on the on-chain Dex. The liquidity is provided by BTCFi according to the asset shares, ensuring that each Token corresponds to a portion of one of the three underlying assets. Thus, holding St Token is equivalent to holding any one of the three underlying assets.
For high-net-worth users, they can become LP of BTCFi by providing BTC, MSTR, and IBIT, enjoying LP dividends. The main profits come from fees, custody fees, and transaction fees, as well as some price difference profits, which I won’t elaborate on.
In fact, there is another system on PayFi. A friend guessed it right last time. Although PayFi is not the core gameplay, it will allow BTCFi to be applied more directly in life. This is also why I want to place this project on @solana, willing to support SOL in RWA design and also willing to support PayFi applications. I will come back to the PayFi part separately after a while, and I hope @Solana_zh can provide more support.
