In the rapidly evolving cryptocurrency financial world, there is always a stark gap between Centralized Finance (CeFi) and Decentralized Finance (DeFi). CeFi offers stable, predictable yield products but lacks transparency and on-chain interoperability. Meanwhile, DeFi provides flexible, innovative financial opportunities but often comes with high risks, particularly with BTC—a type of asset with limited liquidity and on-chain utility compared to ETH.

Bouncebit emerges to solve this problem, creating a CeDeFi ecosystem that combines the safety of CeFi with the creativity and flexibility of DeFi.

The origin of Bouncebit

Bouncebit's founding team identified a significant inefficiency in the market:

  • CeFi users can access stable yield products but cannot participate in on-chain opportunities.

  • DeFi users can exploit complex yield strategies but face high risks, especially when using BTC.

Bouncebit's mission is to unlock institutional-grade Bitcoin yield in a transparent, decentralized environment, allowing BTC holders to engage in advanced DeFi strategies while ensuring safety.

How Bouncebit works

Bouncebit operates based on three main pillars:

1. BTC Restaking Infrastructure

Users deposit BTC into Bouncebit, protected by licensed custody partners. BTC is then restaked to secure the network and participate in yield-generating activities.

2. Two streams of yield

  • CeFi yield: Generated from low-risk strategies, such as lending to vetted partners.

  • DeFi yield: Generated from on-chain activities such as providing liquidity, staking, and lending.

3. The Bouncebit chain

A separate blockchain supporting DeFi protocols using restaked BTC as collateral. This chain is EVM compatible, allowing developers to deploy Ethereum smart contracts easily.

Key features

  • DeFi focused on BTC: Unlike many DeFi ecosystems primarily based on ETH, Bouncebit focuses on making BTC 'profitable.'

  • Managed custody: BTC is protected by licensed custody partners, building trust for institutional investors.

  • Restaking model: Applying the restaking model similar to ETH but for the first time applied to BTC at scale.

  • Interoperability: Developers can build new yield strategies on the Bouncebit chain.

Why Bouncebit matters

Currently, less than 5% of circulating BTC is used in DeFi. The main reasons include:

  • Technical challenges in bringing BTC into DeFi ecosystems.

  • Risks associated with unmanaged custody solutions.

  • Lack of DeFi products specifically for BTC holders.

Bouncebit provides a safe, transparent, and profitable BTC ecosystem, promising to unlock billions of dollars of 'sleeping' liquidity and bring Bitcoin deeper into DeFi.

Utility of the BB token

The BB token is the backbone of the Bouncebit ecosystem:

  • Staking rewards: Validators and delegators receive BB to protect the chain.

  • Transaction fees: Paid in BB for all on-chain activities.

  • Governance: Deciding on protocol upgrades, selecting custody partners, and yield strategies.

  • Encouraging the ecosystem: Rewarding early users, liquidity providers, and DeFi developers.

As a result, BB is both a utility token and a governance asset, ensuring the sustainable development of the network.

Application examples

  1. Institutional yield: Investment funds deposit BTC into Bouncebit to receive stable CeFi yields while allocating to on-chain liquidity pools.

  2. Multi-chain lending: BTC is used as collateral for stablecoin loans on the Bouncebit chain.

  3. Integrated DeFi: Yield protocols integrate restaked BTC to increase APY without needing to transfer BTC directly.

  4. DAO treasury management: DAOs holding BTC can generate yield from low-risk CeFi strategies while participating in on-chain governance.

Competition and differentiation

  • wBTC / tBTC: Only providing wrapped BTC, with no dual yield model CeFi-DeFi.

  • Lido & EigenLayer: Restaking ETH, not focused on BTC.

  • Celsius / BlockFi (before collapse): CeFi but lacking on-chain transparency.

Bouncebit's differentiation: Combining managed custody with DeFi programmability, with BTC at the center.

Challenges and risks

  • Custody risk: Even licensed partners still carry risks.

  • Legal instability: The CeDeFi model may attract scrutiny from both DeFi and CeFi authorities.

  • Attracting liquidity: BTC holders need to trust to transfer assets to Bouncebit.

  • Competition from Layer-2 BTC: Projects like Stacks or Lightning DeFi may compete to attract BTC liquidity.

Strategic opportunities

  • Partnerships with major exchanges: Allowing direct BTC deposits into Bouncebit.

  • Layer-2 BTC partners: Expanding influence and increasing liquidity.

  • Attracting institutions: Using managed custody to attract large BTC funds.

  • Creating synthetic assets: Using restaked BTC to issue stablecoins or derivatives.

Big vision

Bouncebit represents a significant step in transforming Bitcoin from a store of value into an income-generating asset. If successful, Bouncebit could become:

  • The primary bridge bringing BTC into DeFi.

  • A platform prioritizing institutional yield strategy.

  • The driving force behind Bitcoin-based DeFi applications.

By connecting the two worlds of CeFi and DeFi, Bouncebit promises to change how Bitcoin is used in finance and lay the groundwork for future CeDeFi initiatives.

♡𝐥𝐢𝐤𝐞💬 ➤ @BounceBit #BounceBitPrime $BB