I really didn't expect it.

I really didn’t expect everyone to be so interested in #BTCFi, so I’ll say a few more words. First of all, in my understanding, my design is actually equivalent to:

BTCFi = BTC + STO + RWA + RWAFi + Decentralized Finance + PayFi

Specifically, BTC is actually a generic term, not just #BTC, but a collection of #Bitcoin, including BTC, $MSTR, $COIN, and various BTC spot ETFs. However, considering the closer proximity to the native BTC, we prioritize the use of three underlying assets that can represent BTC, namely BTC, MSTR, and $IBIT.

The STO part is a very important part. This STO is just a formality. If it doesn’t grow bigger in one day, there is no need to apply for an STO license. In concept, it means that a fund or offshore company is the main body of the entire project. After the main body is funded, it will purchase BTC, MSTR, and IBIT as assets. The STO part is to package the assets and launch the coin.

It should be noted that if the issued coin itself is equal to BTC MSTR and IBIT, it is 100% non-compliant. It will definitely be sued by the SEC, so what I do is to anchor the total assets of the fund or offshore company as the anchoring asset, and issue tokens based on the total value of the three assets. For example, if there are 1 million US dollars worth of BTC, 1 million US dollars worth of MSTR, and 1 million US dollars worth of IBIT in the fund, what I can do is issue 1 million ST (Stable) Tokens worth 1 US dollar. BTC is stBTC, MSTR is stMSTR, and IBIT is stIBIT (the names are just random, no need to worry, but savvy friends should be able to guess what I will eventually do, just keep it to yourself, no need to say it out loud 🫢).

So if the BTCpump rises by 10% when you buy in, the value of stBTC will also rise from $1 to $1.1, and the same goes for a drop. So the launch coin phase is likely to be in the later stage after STO compliance, so users can directly purchase ST assets with USDT or USDC, which is equivalent to purchasing MSTR or IBIT. All assets are audited by a Web2 auditing company and published monthly to ensure that assets and funds correspond to each other. For users with large amounts of funds, they can directly DeliveryMSTR or IBIT. In fact, this trap system is structurally almost the same as GBTC and ETHE in Grayscale.

The part of RWA is quite simple, which is to package BTC MSTR and IBIT into a synthetic asset. The asset itself is both virtual and real-world Compliance asset, and these assets can be traded in both Web2 and Web3, and shareholders can request to view all documents and accounts, with daily balance formula.

RWAFi is to integrate three assets as an ETF, which can be traded in the OTC market, and if the volume is large enough, it can also be traded on exchanges such as Nasdaq, or even on-chain. This ETF directly reflects the value Fluctuation of three ‘BTC’ and has Web2 assets for authentication. This ETF supports Staking and ReStaking and can open the ETF to individual Decentralized Finance projects as collateral targets.

Decentralized Finance is actually the foundation of STO and RWA. Even RWAFi is based on the premise of Decentralized Finance. Therefore, small-scale investors can directly trade through on-chain Dex. The Liquidity is provided by BTCFi according to the asset shares, ensuring that each Token corresponds to one of the three underlying assets. So holding St Token is equivalent to holding any of the three underlying assets.

For high net worth users, they can become BTCFi’s LP by providing BTC MSTR and IBIT, and enjoy the LP’s Dividend. The main profits come from transaction fees, custody fees, and trading fees, as well as partial spread income, which will not be discussed in detail.

Actually, this trap also has a system on PayFi. A buddy guessed it right last time. Although PayFi is not the core gameplay, it will allow BTCFi to be more directly applied in life. This is also why I want to put this project on @solana, willing to support SOL for RWA design, and also willing to support the application of PayFi. As for the part of PayFi, I will come to it independently after a period of time, and I hope @Solana_zh will support it more.