Introducing acBTC <> Not Just Another ERC20 BTC
acBTC (ACoconut BTC) is a synthetic ERC20 BTC with integrated savings, swap and loan.
Tl;dr. acBTC = mStable + Curve.
Why acBTC?
There are multiple competing ERC20 BTCs in the DeFi world: WBTC, renBTC, HBTC, and etc. acBTC, on the other hand, is a synthetic ERC20 BTC backed by these ERC20 BTCs. People might ask: Do we really need a synthetic ERC20 BTC like acBTC?
The answer is YES!
ERC20 BTCs compete in bridging native BTC to Ethereum, but it is difficult to build applications for all these diverse tokens. acBTC changes the landscape: After bringing native BTC to Ethereum through WBTC/renBTC/…, BTC holders can mint acBTC to enjoy the acBTC savings/swap/loan applications. These applications have a much greater network effect than those built for individual ERC20 BTC.
In addition, synthetic BTC can mitigate risk and price fluctuation from various ERC20 BTCs. This is especially valuable to BTC holders as different ERC20 BTCs vary significantly in terms of architecture and business model.
How to mint acBTC?
Similar to mStable, acBTC is minted from an ERC20 BTC swap called acSwap (ACoconutSwap). Unlike mStable which uses a passive strategy to limit the upper bound of underlying tokens, acBTC adopts Curve’s StableSwap algorithm to manage its token basket proactively.
People can now mint acBTC by depositing WBTC or renBTC into acSwap. More ERC20 BTC will be supported in the future.
For most cases, depositing 1 WBTC or renBTC generates approximate 1 acBTC. This means that the price of acBTC is closed to 1 WBTC/renBTC when the amount of WBTC/renBTC is closed to balance. On the flip side, acBTC price is shifted when the basket is extremely unbalance. This will incentivize users to mint acBTC with the minority token, or redeem acBTC to the majority token in the basket.
In all cases, the following invariant is always maintained: When the amount (and thus price) of WBTC and renBTC is balanced, the amount of acBTC minted equals the total amount of WBTC and renBTC in the basket.
How to earn with acBTC?
acBTC holders can stake acBTC into our savings product, acSaving, in order to earn transaction fees from acSwap/xcSwap and interest from acLoan.
acSwap is the first application of acBTC. It is both where acBTC can be minted, and where WBTC/renBTC can be exchanged.
- Liquidity providers can mint acBTC by depositing WBTC/renBTC into acSwap. The deposited WBTC/renBTC is available for exchange;
- ERC20 BTC traders can exchange WBTC/renBTC in acSwap. The amount of acBTC minted is unchanged during the exchange.
Implemented on top of the StableSwap algorithm, acSwap shares low slippage as Curve but comes with additional features:
- acSwap’s gas fee is on average 1/2 to 1/3 lower than Curve;
- acSwap’s transaction fee is only half of Curve;
- Instead of returning an LP token, acSwap generates acBTC which is a good peg to BTC. acBTC holders can gain additional earning from acBTC application.
How is acBTC governed?
acBTC is governed by AC (ACoconut) token. The total supply of AC token is 21,000,000. For every 7 AC tokens minted, 5 is used for liquidity mining and 2 is granted to ACoconut DAO.
For each week, 1% of the total supply(210,000 AC) is minted which means more than half of AC total supply is minted in the first year. The detail liquidity mining reward schedule will be announced before the start of each week.
Liquidity Mining Resources
Still have questions? Join our Discord channel for live updates!
💬 Join Us on our Journey!
Twitter: @ACoconutDAO
Discord: https://discord.gg/mvANFYe
Telegram: t.me/acbtc_community
