BadgerDAO, a decentralized autonomous organization focused on bringing Bitcoin into DeFi, has released the purple paper for its eBTC protocol, launching a censorship-resistant synthetic Bitcoin for DeFi.
Users can use Lido’s stETH to borrow eBTC with 0% interest, repayment fee and activation fee. This design aims to provide users with efficient and economical access to assets.
The eBTC protocol generates income by obtaining a certain percentage of pledge income from the total system collateral, that is, the agreement income share.
In order to ensure the solvency of the system, eBTC has adopted a liquidation mechanism, that is, if the collateralized debt ratio is lower than the minimum 110%, the debt position is eligible to be liquidated.
In cases where a debt position is not liquidated but its collateralization ratio drops below 103%, the protocol considers it undercollateralized and implements a debt reallocation.