BadgerDAO releases ‘Purple Paper’ for eBTC synthetic Bitcoin

BaderDAO recently announced the official release of Purple Paper for eBTC synthetic Bitcoin.

The announcement was made via a string of tweets by eBTC. BadgerDAO linked the extensive Purple Paper for users to comprehend every complexity of eBTC.

Moreover, the platform stated how the eBTC Protocol will benefit users. Here are some of its benefits:-

  • Allows users to borrow eBTC using Lido Finance
  • Users can pay 0% interest, initiation, and repayment fees 
  • The minimum collateralization ratio is 110% 
  • Immutable smart contract based with minimized governance

According to the tweets, the launched Purple Paper covers multiple protocol mechanics. It talks about fee-free borrowing, debt redistribution, minimized governance, liquidations, and oracles.

eBTC Protocol will allow users to borrow eBTC without paying interest on the debt or principal. Users will also be exempt from paying the upfront fees. As for the revenue, the protocol will rely on a portion of the accrued staking yield from the total system collateral.

The protocol will use liquidations to ensure the system remains solvent at all times. The CDP remains open for liquidation if the ICR of the CDP goes under the MCR of 110%. 

If the CDP isn’t liquidated after the ICR drops below 103%, the system will enable the depletion of the collateral for properly incentivizing the liquidation operation. This is done at the cost of allowing some uncollateralized debt to be left behind. 

When it comes to governance, eBTC aims to be completely trustless and censorship-free. That is why it has initiated a minimized governance approach for assured resilience.

The governance mechanism was designed to facilitate a censorship-free, non-custodial protocol. At the same time, it will enable flexibility around the edges to adapt to technical and market developments. 

Given the buzz eBTC has managed to generate across the market, it is expected to be a major success.

Trevor Holman

Trevor Holman follows crypto industry since 2011. He joined CryptoNewsZ as a news writer and he provides technical analysis pieces and current market data. He is also an avid trader. In his free time, he loves to explore unexplored places.

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