BTC Proxy: A Decentralized Liquidity Protocol That Bridges The Gap Between Bitcoin And DeFi Ecosystem

By thefreethinkeer | StartUpInsider | 24 May 2022

Since the inception of cryptocurrency, its ecosystem has steadily been attracting attentions and interests. Bitcoin (BTC) is dominating the space with 40-60% of shared market capitalization, leaving tons of altcoins (ETH, BNB, XRP, ADA ...) with the remaining 40-60% of shared market capitalization. As far as I know, Bitcoin is not a platform but a digital store of value, this simple fact has given altcoins such as Ethereum and other EVM chains such as Polygon (Matic) and BSC (BNB) an edge, because they are platforms where decentralized finance (DeFi) solutions are built and deployed on.

DeFi ecosystem is highly booming with the year 2022 recording a total value locked (TVL) of about $239 billion in liquidity protocols that are mostly dominated by decentralized exchanges, swap protocols, DeFi products and derivatives. Bitcoin with all it huge market capitalization has been grossly neglected in the DeFi space, this is attributed to the absence of reliable decentralized bridge and custodial for the transfer of BTC to Ethereum, Polygon and other DeFi compatible chains. In this article, I discussed BTC Proxy, a revolutionary Bitcoin liquidity protocol.

Introducing BTC Proxy

BTC Proxy is a layer-2 DeFi protocol that utilizes Proxy Relay technology to power and support multi-institutional tokenization (wrapping) of Bitcoin in Ethereum's erc20 and Polygon mrc20 blockchains respectively, empowering Bitcoin holders with a decentralized bridge for staking their BTC into custody on a 1:1 ratio in order to seamlessly transfer value into Ethereum and Polygon blockchains. Unlike most conventional bridging protocols that rely greatly on liquidity availability, BTC Proxy is totally liquidity independent, thus possessing a guarantee of zero price slippage during transfer of value.

leaning on systems decentralization and blockchain's transparency, the group of minds behind the development of Proxy are keenly focused towards advancing and popularizing their unique idea of an integratable BTC tokenization protocol, they have so far introduced quite a number of complementary products in their suit of Bitcoin Yield Strategies that bridges the gap between DeFi and Bitcoin in order to welcome key and important holders to participate with close to zero risk exposure to liquidation, impermanent loss or LTV ratios maintenance.

The principal utilization scenario of BTC Proxy solution is towards the liberation of BTC value in custody of long-term hodlers, Investment Funds, whales and the world's MicroStrategy among several others by wrapping BTC into $BTCpx. Given to the recent rates of hacking incidence among centralized and decentralized financial services, BTC Proxy utilizes and insured assets custodian that guarantees and maintain a secure holding environment.

Bitcoin is the first known decentralized currency yet its not a part of the booming decentralized finance ecosystem. BTC Proxy solution have brought these two world together, ushering a new dawn for Bitcoin maxies as they can now take full advantage of DeFi by directly accessing and utilizing Proxy finance solution here.

Features of BTC Proxy

BTC Proxy revolutionary solution is equipped with a number of rich features that includes but not limited;

Minting: This feature powers a completely decentralized minting of BTC Proxy tokens through interaction with smart contracts. Users only requires to connect their wallet with the web3 interface of Proxy finance and complete their desired minting operation.
Redemption: The redemption feature is utilized when a user want to redeem their BTC Proxy token for BTC. This process involves interacting with Proxy finance smart contract and burning BTCpx in order to redeem BTC from the custodian.

Yield Earning: This is a DeFi product that users can utilize to stake their BTCpx in order to yield rewards. Finanly BTC hodlers can also be a part of the amazing DeFi ecosystem, thanks to BTC Proxy!
Custody: Hex Trust is an insured and regulated asset custodian that BTC Proxy ecosystem utilizes for safe custody of all bridged Bitcoins. Aside 100% insurance coverage, Hex Trust allow for secure storage with multi-sig hot and cold wallets.

Proxy Governance: $PRXY is the native asset of BTC Proxy ecosystem, it is the primary utility for governace of the ecosystem as hodlers get to vote on and propose changes that affects the growth and development of the ecosystem.

Understanding BTC Proxy Relay Technology

Proxy Relay is simple the technology that BTC Proxy utilizes to confirm deposits in Hex Trust custody. In an effort to transparently stand-out, BTC Proxy built and improved on the success of popular wrapped token protocols by utilizing a side-chain to Relay the confirmations of Bitcoin network transactions to smart-contract on Polygon and Ethereum networks.

With an average Relay transaction execution time of close to 30 minutes, Proxy Relay is designed to verify all BTC blocks confirmation into Polygon chain at a very cheap cost before Relaying the transaction to either an Ethereum or Polygon smart-contracts to mint or redeem BTCpx tokens. All transaction confirmations are displayed in real-time for real-time settlements and transparency with no third parties involved in any execution phase.

BTC Proxy Utilization Scenarios

BTC Proxy revolutionary solution can be utilized in quite a number of scenarios that includes but not limited to;

DeFi Products in Ethereum's Blockchain: Ethereum erc020 blockchain development promoted the emergence and growth of dApps and decentralized finance products that ranges from DEXs to Swap protocols and borrowing/lending protocols among so many others. The DeFi space has attracted so much value but with BTC owning the most share of the total market capitalization, bringing BTC into DeFi space will bring about an astronomical increase in liquidity for many products.

Tokenized Assets: BTC Proxy ecosystem provides a possibility for transfer of value to be utilized from one particular chain to another, thus tokenizing them. Tokenized assets are usually backed by fiats or digital assets, hence providing a safe way of storing value in cryptocurrency without fear of price actions.
Interoperability Between Cryptocurrencies: Being interoperable is a major trending feature in today's cryptospace, this can be attributed to a number of push factors that includes; cheap transaction fees, privacy, transaction throughput and smart-contract availability among several others. BTC Proxy framework allow for any cryptocurrency to be mapped and represented in its ecosystem to benefit from enhanced blockchain functionality.
dApps and DEXs Liquidity: Its a known fact that majority of the erc20 tokens trading in centralized exchanges are paird with BTC and majority of the tokens trading in decentralized exchanges are paired with ETH liquidity. BTC Proxy solution has bridged this technology gap, thus leading to an increased liquidity pools for decentralized exchanges and DeFi products such as borrowing/lending protocols.

Benefits of Being a Part of BTC Proxy Ecosystem

Being a part of BTC Proxy's rich solutions and features also comes with perks, these includes but not limited to;

Financial Freedom: BTC Proxy have successfully taken BTC into Ethereum and Polygon blockchains, BTC holders can now liberate their financial freedom by taking advantage of the various DeFi opportunities in these chains. Trading requires good liquidity to avoid price slipage, and BTC Proxy is bringing in more liquidity.
Decentralized Bridge: Bitcoin holders will now benefits from the utilizing BTC Proxy decentralized solution to bridge their holdings into erc20 and mrc20 blochains without the interference of any centralized authority or exchange.

Secured Lubrication: BTC Proxy have empowered the cryptospace with the lubrications for a secure and efficient flow of blockchains.
Standardized Bitcoin: The solution of BTC Proxy have upgraded Bitcoin to a more standardized level, allowing BTC maxies to bridge and benefits from DeFi opportunities that were previously unreachable for them.
Flexibility: The idea of BTC Proxy makes it quite flexible for BTC to be redeemed at any point in time.

BTC Proxy Token (PRXY) & Its Tokenomics

$PRXY is the native token of BTC Proxy ecosystem with the Polygon contract, the token is interoperable with a maximum supply of 21 million $PRXY that will serve as the governance token that powers BTCpx decentralized autonomous organization (DAO). PRXY was modeled with the tokenomics of Bitcoin but within the context of decentralized finance (DeFi).

With a current circulating supply of 3,872,397.979836 tokens, $PRXY utilizes Proof of Stake (PoS) consensus protocol where token supply increases through staking pools reward as opposed to BTC's Proof of Work (PoW) consensus protocol that requires hardware and energy for fresh coins to be minted as reward for miners. BTC Proxy maintains a dual tokens economy with $PRXY being the unstaked tokens and sPRXY being the staked tokens. $PRXY will tentatively be utilized for voting in the governance system, Bitcoin farming and liquidity mining among several other.

Meet BTC Proxy Team

Meet Their Partners

Project Development Timeline

In Conclusion

It is widely known that Bitcoins accumulated or mined by institutions and large funds are usually sent into storage and locked or put into work in lending protocols to yield 7% APY. BTC Proxy was launched in July 30th, 2021 to provide BTC with access to the ever expanding DeFi landscape. BTC Proxy have changed the APY narratives to a double/triple digits based on its value proposition that offers a substantial yield with minimal risk. This is quite an alternative to not miss considering. Do follow the official links i made available below for a deeper understanding of the solution here, thanks.