How does PumpBTC Work

PumpBTC is revolutionizing the way users can leverage their Bitcoin across multiple blockchain networks. Initially launching on the Binance Smart Chain (BSC) with plans to expand to other EVM-compatible chains like Berachain and Scroll, PumpBTC allows users to stake various forms of Bitcoin (such as BTCB and WBTC) and receive $pumpBTC tokens in return. These tokens automatically accrue yields from the Babylon protocol, offering a seamless staking experience.

Prioritizing security, PumpBTC doesn't directly hold user assets but instead collaborates with professional, licensed custodians like Cobo MPC and Coincover. This approach significantly reduces risks associated with traditional bridges (such as Multichain, Nomad, etc) while still enabling additional yields.

Transparency is at the forefront of PumpBTC's design, with a real-time dashboard displaying Proof of Asset data, allowing users to constantly monitor their staked BTC.

The custodians handle the delegation of equivalent native BTC to Babylon's Finality Provider on the Bitcoin mainnet and manage the distribution of rewards to users. This comprehensive system ensures that PumpBTC never directly handles user assets, minimizing security risks while maximizing potential returns.

By combining multi-chain accessibility, professional-grade asset security, real-time transparency, and efficient yield generation, PumpBTC offers a unique solution in the DeFi landscape. It provides a safe and profitable way for Bitcoin holders to participate in Babylon Staking across various blockchain ecosystems, all while maintaining the security, liquidity, and integrity of their original assets.

While staking directly on Babylon Chain offers attractive rewards, $pumpBTC elevates your Bitcoin's utility to new heights:

1. Enhanced Liquidity:

   Unlike direct staking on Babylon, which may lock up your BTC assets, $pumpBTC offers superior flexibility. You can trade $pumpBTC on various decentralized and centralized exchanges, provided adequate liquidity. This feature allows you to maintain exposure to Bitcoin's value while retaining the ability to quickly respond to market opportunities.

2. Streamlined Staking Process:

   PumpBTC simplifies the BTC.B/WBTC staking experience by enabling you to stake BTC.B/WBTC directly on different chains. This approach leverages EVM chain’s robust DeFi ecosystem and battle-tested security infrastructure, providing a familiar and trusted environment for your staking activities.

3. Amplified Yield Generation:

   By converting your BTC.B/WBTC into $pumpBTC, you open the door to multiple reward streams as well as Babylon’s native rewards. This diversification can significantly enhance your overall yield potential, allowing you to maximize returns on your Bitcoin holdings.

4. Ecosystem Integration:

   $pumpBTC serves as a gateway to a wide array of DeFi protocols and applications built on Ethereum and other EVM chains. This integration expands your options for yield farming, lending, and other DeFi strategies.

5. Risk Mitigation:

   The ability to quickly trade $pumpBTC provides an additional layer of risk management. In volatile market conditions, you can swiftly adjust your position without the delays often associated with unstaking processes on other platforms.

6. Compound Growth Opportunities:

   The liquid nature of $pumpBTC allows for easy reinvestment of yields, potentially enabling compound growth strategies that can significantly boost long-term returns.

By choosing $pumpBTC, you're not just staking your Bitcoin – you're unleashing its full potential in the dynamic world of decentralized finance. Experience the perfect blend of Bitcoin's value proposition with the agility and opportunities of the broader DeFi ecosystem.

As can be seen from this more visual illustration, assets are either in EVM contracts (as wrapped BTC) Or in Babylon (as native BTC).

The intermediary MultiSig -> Binance -> Cobo custody are all channels and theoretically should not hold assets. $pumpBTC contracts are independently deployed on different chains. Each chain can mint $pumpBTC through staking contracts and burn $pumpBTC through unstaking.

The total supply of $pumpBTC equals the sum of supplies from all $pumpBTC contracts across chains. Each $pumpBTC is backed by a 1:1 full reserve of native BTC. PumpStaking contracts serve as deposit and withdrawal channels for Wrapped BTC Tokens ($BTCB / $WBTC / $FBTC) on different chains.

The majority of assets are stored as native BTC on Babylon via Cobo Custody. A smaller portion is in PumpStaking as Wrapped BTC Tokens.

PumpTokens can be transferred between different chains via cross-chain bridges. The cross-chain process works as follows:

• The source chain burns $pumpBTC

• The destination chain mints $pumpBTC

This cross-chain method doesn't affect the total supply, thus maintaining the 1:1 full reserve of native BTC backing each $pumpBTC.

FAQ

Q: According to the project design, are the $pumpBTC tokens from different PumpStaking contracts also different? For example, if a user stakes $WBTC in Contract A to get $pumpBTC, can that $pumpBTC be used in Contract B to redeem a different asset?

A: Yes, $pumpBTC can be redeemed for the corresponding wrapped BTC asset in any pumpStaking contract.

Q: Users can stake $WBTC in Contract A to get $pumpBTC, and then unstake these $pumpBTC in Contract B to get $FBTC. This raises a potential issue: if there's a price difference between underlying assets like $WBTC and $FBTC, could this create arbitrage opportunities using $pumpBTC?

A: In our product design, we maintain a rigid 1:1 peg with wrapped BTC. We have a whitelist for wrapped BTC tokens to ensure thorough auditing and risk control. We only accept tokens that can be unwrapped into native BTC.

• $FBTC can be unwrapped 1:1 to native BTC

• $BTCB can be unwrapped 1:1 to native BTC

• $WBTC can't be directly unwrapped; there's a few basis points fee on the $WBTC merchant. We factor this into the contract fees.

The existence of underlying native BTC ensures the 1:1 peg determines the value of $FBTC and $WBTC. If arbitrage opportunities arise, arbitrageurs' actions will stabilize the market.

Q: In a multi-chain scenario, where bridges burn tokens on one side and mint on the other, will the burning and minting by bridge contracts affect the internal accounting of PumpStaking contracts?

A: The bridge only interacts with $pumpBTC and does not affect the internal accounting of PumpStaking contracts (including totalStakingAmount).