BB Series (4): The Role of Transparent CeFi in the BTC Ecosystem
When it comes to the role of transparent CeFi in the BTC ecosystem, BounceBit has done an outstanding job. It does not simply piece together CeFi and DeFi, but rather makes CeFi more reliable through MirrorX technology. Traditional CeFi has many issues, such as fund misuse and lack of transparency; the collapses of those platforms in 2022 serve as a lesson. BounceBit uses T+1 settlement and on-chain reconciliation, mirroring exchange behaviors, allowing users to earn CeFi interest while playing in DeFi after depositing BTC.
The core lies in the collaboration with Ceffu and Mainnet Digital, where assets are stored in regulated custody, generating LCT tokens that are then bridged to the blockchain. To what extent is the transparency? Every transaction is end-to-end encrypted, with multi-party approvals and rigorous risk management, avoiding trust crises. This is crucial in the BTC ecosystem, as Bitcoin holders are extremely conservative and reluctant to move their assets lightly. BounceBit makes CeFi a cornerstone, reinforcing rather than replacing it, allowing users to safely arbitrage financing rates while also integrating RWA for diversification.
For example, users convert BTC to BBTC, stake it to receive stBBTC, and continue investing in Delta neutral strategies, yielding steady returns. In summary, transparent CeFi not only addresses the pain points of BTC Finance 1.0 but also injects vitality into the ecosystem, transforming Bitcoin from a passive holding into an active tool. In the future, after trust is rebuilt, liquidity will soar.
