YBTC

Introduction

YBTC is a yield-generating Bitcoin asset designed to help users earn passive returns while keeping full exposure to BTC. It provides an efficient way for Bitcoin holders to participate in DeFi without actively managing their positions.

Built on the ERC4626 standard, YBTC ensures a structured and predictable yield distribution. It remains fully backed by Bitcoin-based assets, making it well-suited for users seeking both liquidity and long-term appreciation.

Underlying Asset

The core asset backing YBTC is WBTC (Wrapped Bitcoin), a tokenized version of BTC that facilitates seamless integration with Ethereum-based DeFi applications. WBTC is backed 1:1 by Bitcoin and offers deep liquidity across various financial platforms. We chose WBTC due to its established trust, widespread adoption, and strong market presence.

Supported Assets

Alongside WBTC, YBTC’s Manager contract supports deposits of other Bitcoin-related assets, including:

sBTC (Lido Staked BTC): A liquid staking derivative that allows BTC holders to earn rewards while retaining liquidity.
tBTC (Threshold BTC): A decentralized and non-custodial wrapped Bitcoin solution ensuring greater security and accessibility.
Pendle PT Tokens: Principal tokens that separate fixed-yield components from underlying BTC assets, enabling stable returns.

Deposits of non-native assets follow a structured process:

Users deposit a supported asset (e.g., tBTC) through the Manager contract and receive a Receipt NFT as proof of deposit.
An off-chain executor then facilitates conversion and finalization by:
- Calculating the equivalent value in WBTC terms based on current exchange rates
- Updating totalAssets within YTokenL1 to reflect the new balance.
- Issuing the appropriate amount of YBTC to the user.

Yield Strategies

YBTC employs a diversified approach to yield generation, focusing on three primary categories:

Yield Trading Protocols - Pendle, Spectra, Napier, etc. Deployment in tokenized yield markets specializing in BTC-based instruments with predictable returns.
Lending Platforms - Aave, Spark, Flux Participation in lending markets offering stable and competitive BTC yields, ensuring capital efficiency.
Delta-Neutral Strategies
- Funding Rate Arbitrage: Capturing rate differentials between BTC spot and derivative markets.
- Hedged Positions: Utilizing offsetting trades to mitigate directional risk while earning passive yield.

The allocation of yield strategies is actively managed to ensure a balance between risk and return while maintaining diversification across different yield sources.

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Last updated 1 day ago

Introduction

Underlying Asset

Supported Assets

Alongside WBTC, YBTC’s Manager contract supports deposits of other Bitcoin-related assets, including:

sBTC (Lido Staked BTC): A liquid staking derivative that allows BTC holders to earn rewards while retaining liquidity.

tBTC (Threshold BTC): A decentralized and non-custodial wrapped Bitcoin solution ensuring greater security and accessibility.

Pendle PT Tokens: Principal tokens that separate fixed-yield components from underlying BTC assets, enabling stable returns.

Deposits of non-native assets follow a structured process:

Users deposit a supported asset (e.g., tBTC) through the Manager contract and receive a Receipt NFT as proof of deposit.

An off-chain executor then facilitates conversion and finalization by:

Calculating the equivalent value in WBTC terms based on current exchange rates
Updating totalAssets within YTokenL1 to reflect the new balance.
Issuing the appropriate amount of YBTC to the user.

Yield Strategies

YBTC employs a diversified approach to yield generation, focusing on three primary categories:

Yield Trading Protocols - Pendle, Spectra, Napier, etc. Deployment in tokenized yield markets specializing in BTC-based instruments with predictable returns.

Lending Platforms - Aave, Spark, Flux Participation in lending markets offering stable and competitive BTC yields, ensuring capital efficiency.

Delta-Neutral Strategies

Funding Rate Arbitrage: Capturing rate differentials between BTC spot and derivative markets.
Hedged Positions: Utilizing offsetting trades to mitigate directional risk while earning passive yield.

The allocation of yield strategies is actively managed to ensure a balance between risk and return while maintaining diversification across different yield sources.