Introduction
The quest for a financial synthesis that seamlessly melds the traditional with the revolutionary has always defined the ultimate ambition of cryptocurrency: to reimagine money markets.
Since its inception, BounceBit has sought to capture this essence by integrating the established security of centralized finance (CeFi) with the boundless potential of decentralized finance (DeFi), establishing the third kingdom, CeDeFi.
The market has always been in search of fixed income opportunities for Bitcoin and dollar assets — a market worth multiple billions in traditional finance. While the crypto space has yet to fully tap into this potential, projects like Ethena have also recognized this opportunity, aiming to provide stable dollar yields with synthetic dollars like USDe.
In recent years, we have seen pivotal developments in crypto. The space has grown massively, mainly driven by following forces.
Centralized finance, through platforms like Coinbase and Binance, has brought structure and accessibility to crypto trading, attracting millions of users worldwide.
It is them who have the biggest source of liquidity to date and are undisputed when it comes to efficient trading and ramp solutions. For most, they are the gateway into the space, the first step away from FIAT towards digital assets.
Especially recently it has become very clear that even though CEXs provide the most efficient money flow, they are not inviolable. They stand in conflict with the very core of crypto: sovereignty, transparency and decentralization.
DeFi has introduced a new layer of financial interaction, based on decentralized protocols that offer transparency and direct participation in financial markets without traditional intermediaries.
DeFi is often laid out as the endgame of crypto, however there are obvious hurdles that are yet to be fully overcome. Smart contract security, regulatory uncertainty, questionable scalability, just to name a few.
While it is currently not yet feasible to have a majorly adopted money system that fulfills all of those ideals perfectly, it is possible to try and make compromises that offset the shortcomings of current systems.
What Makes Us… Us?
Our Core Philosophy
Perhaps crypto is gradually coming to a point where (from an investors perspective) sifting through a mountain of low-caps is not the best bet anymore, nor is looking for the most scalable, most marketable, most secure infrastructure.
While these strategies might work out for competent (or average) VCs and the sophisticated (or lucky) retail investor, for most the risk to reward ratio is on a steep curve downwards.
Perhaps it is stable yield that will bring us towards a new flow of money, different from the legacy system. Perhaps it is already time to think more long-term.
BounceBit is not attempting to reinvent the wheel. Instead, we aim to bring a fresh perspective by integrating the best aspects of CeFi with the innovative potential of DeFi.
Our motivation for starting BounceBit was driven by the desire to democratize access to high-yield opportunities within the Bitcoin asset class. These opportunities were traditionally reserved for quant funds and top asset management firms. We strive to bring the transparent benefits of CeFi to the masses while bridging the gap between CeFi and DeFi.
Retail access, institutional yield
Our Take on CeDeFi
We believe that a fusion of CeFi and DeFi is the way forward, taking the best from both worlds. CeDeFi is the logical step from a chronological and causal perspective and it might just be what will actually drive mass adoption of crypto - the one concept that takes us to the next level.
Since the inception of BounceBit, centralized finance (CeFi) has been a foundational pillar of our ecosystem.
Trusted custody solutions such as Ceffu, Mainnet Digital, and Fireblocks provide the framework for sustainable and secure yield. These custodians are essential not only for retail investors but also for traditional finance institutions. They serve as a crucial safety net to DeFi, mitigating issues with regulation, smart contract vulnerabilities, and operational challenges.
Our asset-driven approach is particularly focused on the Bitcoin ecosystem. Unlike other projects that aim to act as a Layer 2 or sidechain to the Bitcoin Network, we have identified that there is no substantial demand for such solutions. Recent trends, like runes and BRC-20 tokens, seem to capitalize on temporary hype rather than addressing long-term needs.
Instead, our goal is to build infrastructure for Bitcoin as an asset, enhancing its utility without altering its core technology.
You might not agree, the market might not agree, and that’s fine, we are venturing this road anyway.
Aside from creating CeFi yield-generating products with experienced, licensed crypto prime brokers, BounceBit Chain plays a crucial role in our grand CeDeFi infrastructure.
BounceBit Chain serves three main purposes:
- CeDeFi Settlement and Record-Keeping: It ensures transparent and efficient settlement and record-keeping on-chain, providing a secure and immutable ledger.
- Dual-Token PoS Structure: This structure enables users to earn staking rewards in $BB by securing the chain with either BBTC or BB tokens. It enhances network security and incentivizes participation.
- Yield Opportunities: The on-chain ecosystem offers diverse yield opportunities. Users can participate in various activities such as swaps, issuing meme tokens, and engaging in DeFi derivative trading, thereby generating additional income.
To put things into perspective, BounceBit’s unique value proposition lies in unlocking Bitcoin’s potential within both centralized and decentralized finance. By leveraging the strengths of both, we provide users with unparalleled opportunities to maximize their token holdings.
Liquid Custody
If it has not been apparent until now, Liquid Custody Tokens (LCT) are a core component of the BounceBit infrastructure. They are the first step when entering the BounceBit realm and effectively a bridge to what we like to call CeDeFi wonderland.
All LCT are backed 1:1 by equivalent assets in custody, and they stay there until the LCT is redeemed. Custody is effectively an aggregated pool of assets, in a passive state, until they are not.
It enables earning tangible interest from CeFi, all while using LCTs to participate in Bitcoin staking and on-chain farming — a reinforcement of what holds CeFi and DeFi together. This integrated ecosystem offers three types of yield for Bitcoin holders:
- CeFi Yield: Earned from funding rate arbitrage and over-collateralized lending and borrowing.
- Staking Rewards: Node operation rewards from staking Bitcoin on the BounceBit chain.
- Opportunity Yield: Yield generated from venturing into the BounceBit chain ecosystem.
2024 Roadmap — What we are continually building
BounceBit has three pillars of development and each has a designated roadmap. Our big direction is to focus on CeDeFi and make a variety of CeDeFi products on our chain.
Imagine an orchestra, our infrastructure is the stage, the products are the instruments, you are the musicians, and we are the conductor. Who is the audience? Short term token holders who choose to not use the products we offer.
Structurally BounceBit can be characterized by three main pillars.
- BounceBit Portal acts as the operating system. It is the interface that allows easy interaction with the products we offer.
- BounceBit Chain is the settlement and executional layer of the project.
- BounceClub is the Lego set to build CeDeFi as a service and as an ecosystem.
CeDeFi on Portal:
We are taking both vertical and horizontal approaches for our CeDeFi expansion. Horizontal means integrating more assets and more asset management venues. Vertical means we are building more CeDeFi products to cover most use cases.
- Fixed Earn:
- Offers fixed income products for Bitcoin and dollar assets, catering to investors seeking predictable and consistent yields.
- Delivers stable returns, making it an attractive option for risk-averse investors looking for dependable income streams.
2. Lending:
- Facilitates over-collateralized lending and borrowing, allowing users to leverage their Bitcoin assets for additional yield.
- Enhances liquidity and enables users to maximize the utility of their Bitcoin holdings through strategic borrowing and lending.
3. Structured Products:
- Offers complex financial instruments tailored to meet specific investor needs, combining various yield-generating strategies.
- Provides enhanced returns through sophisticated investment strategies, catering to more experienced investors seeking higher yields.
Chain Infrastructure:
Each chain comes with a purpose. The feature of BounceBit Chain focuses on CeDeFi asset management. The underlying infrastructure communicates and corresponds with custody and asset management.
Therefore, the chain will receive major upgrades to usability and performance.
We will…
1/ Optimize EVM execution layer to improve node performance
2/ Develop shared security client (SSC) module to allow other projects to utilize the liquidity of BounceBit BTC restaking chain
3/ Build new Mempool module to achieve higher transaction throughput
4/ Refactor the communication layer between EVM and Cosmos SDK
BounceClub:
BounceClub will focus on CeDeFi as a service. Anyone can launch their CeDeFi products using our widget. BounceBit’s official role is limited to maintaining the whitelist for contract deployment, creating general components, and serving as a navigator. The Club website will not include dApp business logic components; it will only provide general components.
BounceBit’s vision is not yet widely known. This is a challenge but also an opportunity.
With no doubt, getting BounceBit ahead is a great feat. One could say that we are three projects in one, but our team has proven to be hard-working and able to deliver quickly & consistently.
The proof of concept has already been delivered throughout the first four months of our journey; our CeDeFi products have proven returns and feasibility on a large scale, i.e. Binance Megadrop & Premium Yield.
BounceBit’s position is unique. Pioneers of a new paradigm.
