Basics

Introducing eBTC

eBTC is built on top of the Ethereum staking layer. It eliminates custodial risks, is self-sustaining, provides the highest level of transparency and contributes to the Ethereum network’s security. eBTC strengthens the foundation of DeFi as the only unstoppable synthetic BTC primitive while introducing a protocol that is the best place to borrow Bitcoin.

eBTC accomplishes this by being:

• Decentralized, composable and transparent

• Capital efficient with fee-less borrowing

• Self perpetuating - it supports its own utility

Decentralized, redeemable and transparent

eBTC represents a liquid staked ETH based collateralized debt position (CDP) powered by immutable smart contracts without the reliance on bridging native BTC to the Ethereum blockchain. This enables users at all times to determine the solvency of the asset they are borrowing/holding while removing counter-party trust.

This is a stark difference from synthetic assets that dominate DeFi today which have an inherent lack of trust without transparency. These values will no doubt become a minimum requirement for DeFi participants in the future.

Any protocol can be built on top of eBTC and leverage its fee-less borrowing functionality simply by integrating its smart contracts. That can be centralized traditional platforms, dapps, websites or anyone really. A complete permissionless experience that hopes to attract an enormous amount of integrations and cement eBTC smart contracts as a foundational lego piece in DeFi.

Beyond decentralization, censorship resistance is a massive goal for eBTC which unfortunately isn’t possible in its purest form today. Censorship resistance is only as strong as your weakest point of centralization which with the current state of Ethereum is in its oracles. Beyond that, there is a lack of decentralization when dealing with LSD’s due to the limitations of the staking infrastructure. Over time, we expect to see a clear path toward further decentralization for these assets and hope to be part of the solution. Until then we intend to limit centralization in eBTC’s design to the best of our ability while having a path towards censorship resistance.

Purple Paper

eBTC's Purple Paper can be found here.