Introducing Redux: The Bitcoin Money Market

BTC Proxy
Published in
4 min readMar 30


Redux will be Bitcoin’s Money Market. Since 2021, BTC Proxy has been building a trustless solution that operates transparently on-chain, enabling Bitcoin to integrate with DeFi and fill a gap left open by centralized platforms and replace their traditional lending desks. Get ready, because Redux is about to shake things up! This game-changing product launch is set to be our most disruptive yet, and for good reason. In this article, we’ll delve into the issues that Redux aims to address and provide an explanation of how it’s going to work. Buckle up!

CeFi’s Collapse: The Rise of DeFi

The recent fall of major CeFi (Centralized Finance) players in the cryptocurrency industry like FTX and Celsius has further revealed the flaws of centralized financial systems. Celsius reportedly owes $2.5 billion worth of Bitcoin to investors while BlockFi owes over $1 billion to its largest creditors. Now with the collapse of Silicon Valley Bank and Signature Bank, the world is reminded of why Bitcoin was invented in the first place.

“When you remove trust from the equation and rely purely on transparent lending standards executed by impartial computer code, you get a better outcome. This is the lesson to be learned,” Arthur Hayes Former CEO Bitmex.

Centralized platforms are not the place to earn yield. Investors should exercise caution when dealing with self-proclaimed “decentralized” banks and crypto management firms. Learn from the billions of customer dollars lost via FTX, Celsius, BlockFi and Genesis insolvencies. While these platforms used crypto, they were essentially centralized entities that became overleveraged and operated like ponzi schemes as they based their lending criteria on credit risks.

At BTC Proxy we know that centralized powers are prone to corruption and that they cannot be trusted to hold one’s Bitcoin. Our goal is to create an institutionally friendly decentralized solution that will allow Bitcoin to participate in DeFi (decentralized finance) and fill the gap left by centralized entities.

Enter BTC Proxy’s Redux, a decentralized lending desk that has been optimized for institutional use and specializes in Bitcoin. Think of it as an Aave for Bitcoin.

Aave for Institutional Bitcoin

The Redux system will operate transparently on-chain, providing a trustless solution for Bitcoin holders to participate directly in a borrowing/lending protocol. The BTCpx token is 100% asset-backed by BTC in custody and insured against hacks and loss, serving as a bridge for Bitcoin to participate in the money markets of Redux on Ethereum, Polygon, and Binance. This enables users to seamlessly and cost-effectively transfer value in and out of Bitcoin into money market pools using USDC/BUSD, allowing them to participate in any DeFi protocol.

BTCpx allows both Bitcoin holders and liquidity providers to supply borrowing and lending pools, earn interest, and utilize their supply as collateral to borrow. The algorithm ensures that interest paid by borrowers flows directly to the suppliers ensuring cash flow can never be negative.

Unlike Aave, which uses a centralized supply interest rate policy, BTC Proxy has produced a decentralized process. This unique approach involves deducting the borrowers collateral and reducing it and passing the interest collected to the suppliers, hence the name Redux. By taking this approach, BTC Proxy is able to offer a more secure, trustless, and transparent flow of yields.

Why Don’t Institutions Use WBTC?

The minting and redemption of WBTC is extremely centralized and reserved only for selected entities. The process is not available to everyone. It lacks a user interface, and as a result, users typically have to rely on exchanges to swap their BTC for WBTC. This process introduces counterparty risk and price slippage issues, which can be especially problematic for institutions dealing with large amounts of Bitcoin.

The user-friendly interface of BTC Proxy addresses these issues, allowing users to avoid price slippage and eliminate third-party risks. The platform utilizes a BTCpx bridge to transfer funds via smart contracts to insured custodians, completely bypassing the need for intermediaries. This approach eliminates the need for KYC, which is an added benefit. The Proxy protocol allows users to mint BTCpx using BTC, WBTC, or BTCB.

BTC Proxy currently has 34 institutional users, and the majority of the protocol’s $13M TVL (total locked value) is institutional money. Redux has secured commitments from institutional partners to support the liquidity needs of borrowers.

Long Live Bitcoin

Redux is expected to go live around late Q2 just in time for Bitcoin summer! In the meantime, as we build out the bridge and Redux, users can enjoy earning some BTC in our Bitcoin Farm. Simply stake our $PRXY governance token to earn your tier of fees generated from the bridge. You also can Mint BTCpx and then Bond it for additional yields. Join our community of Proxy People in our active Discord channel to be the first to know when Redux launches. We are happy to have you with us on this journey to build a secure DeFi money market for Bitcoin that brings both institutions and retail to the party!

About BTC Proxy
Unlocking institutional-grade Bitcoin #RealYields on DeFi. Powered by the permissionless BTCpx wrapper with insured custody.

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