Introduction
dlcBTC, a safer wrapped Bitcoin. Unlike custodied wBTC or bridged tBTC, dlcBTC is minted by merchants from self-custody.
We are not a Bitcoin L2 and thus do not require any changes to Bitcoin. Instead, we implement Discreet Log Contracts (DLCs), which were invented at MIT 6 years ago by the creator of the Lightning Network (read whitepaper 3). Similar to an if-then statement, DLCs use pre-funding transactions to conditionally move Bitcoin using input from an off-chain oracle. Our view is that bridges are too dangerous. When users send their BTC to a set of nodes, they abandon BTC security and fully rely on the design of the bridge. As they say: not your keys, not your Bitcoin. A single erroneous commit could put the BTC at risk.
Type: dlcBTC
Authors: Peter M. Moricz
Motivation
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Deploying dlcBTC on Compound would offer a more secure way for Bitcoin holders to participate in DeFi. Unlike other wrapped Bitcoin options, dlcBTC ensures that the underlying Bitcoin remains under the user’s control, eliminating the risks of custodial or bridged solutions. This unique self-custody approach makes dlcBTC an ideal asset for Compound, providing users with a trust-minimized option backed by the full security of the Bitcoin network.
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The demand for dlcBTC on Compound could be strong, as it appeals to those who prioritize security while seeking yield opportunities. With growing concerns around cross-chain risks, dlcBTC’s theft-proof model offers a safer alternative that could attract borrowers and lenders, driving its adoption within Compound and the broader DeFi space.
Important Links
- Website: https://www.dlcbtc.com/
- Twitter: x.com
- Current Marketcap: $2.3 mil
- Coinmarketcap, Coingecko; https://www.coingecko.com/en/coins/dlcbtc
- Blockexplorer link and contract address: $55,996.00 | dlcBTC (DLCBTC) Token Tracker | Arbitrum One