Citrea Launches Bitcoin Rollup Mainnet, ctUSD Stablecoin
Founders Fund and Galaxy Ventures supported Bitcoin Zero Knowledge Rollup (ZK-rollup) Citrea on Tuesday launched the main network with BTC guaranteed loans, BTC-structured products and a new US dollar stablecoin, ctUSD.
The startup aims to transform what Citrea calls the “economically idle” Bitcoin (BTC) into decentralized finance (DeFi) and payments, tying activity further into Bitcoin's underlying layer.
The team expects active defin liquidity to reach $50 million in the first few weeks, with BTC lending, BTC structured products and decentralized trading live from day one.
The start of the mainnet immediately threw Citrea into the familiar Bitcoin debate: What exactly should the BTC blockchain be used for?
As block rewards continue to decline, many developers see fee-free use cases like Citrea as necessary to sustain mining fee income.
However, purists argue that Bitcoin's limited potential is for simple, censorship-resistant payments rather than complex financial systems built on top.
CtUSD aims to regulate the liquidity of the Bitcoin stablecoin.
CtUSD is powered by MoonPay, a regulated crypto payments and infrastructure company
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It is backed 1:1 by cash and short-term US Treasuries, and as a compliance forward option is distributed over Bitcoin's neighboring stacks from rolled-up Tether (USDT) and rolled-up USDC (USDC).
Orkun Mahir Kilic, co-founder and CEO of Chainway Labs, told Cointelegraph that ctUSD is not connected to another chain, but embedded into Moonpay Iron's banking infrastructure.
That setup includes bank-level rails such as virtual international bank account numbers (vIBANs) that allow users to automatically convert to ctUSD and operate in an on-chain fiat.
Why does ctUSD's ‘native' design matter?
Because Citrea is “the Bitcoin application layer associated with the Bitcoin security model,” ctUSD “inherits the security features of the Citrea network.
This mitigates some of the risks in other DeFi protocols because bridging assets “inherit the security risks of their weak links,” Kilich said.
He added that ctUSD is protected from foreign bridge hacks by being printed locally and “doesn't rely on a third-party wrapper protocol solution.”
Unlike other ecosystems where “liquidity is distributed across multiple bridged versions of an asset,” ctUSD is “Sitrea's single preferred stablecoin,” which “retains capital and avoids liquidity disruptions that increase friction for lenders and traders.”
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Kilicchi argued that Bitcoin's anchor package, combined with a regulated stablecoin and bank mergers, is designed to “increase supply in the system” and develop ctUSD “from a launch asset to a normal liquidity level in the Bitcoin economy over the next six to 12 months.”
On the testnet, Citrea says that using its own data availability alone accounted for about 10% of Bitcoin's monthly data bandwidth at one point, a sign that even the pre-launch rollout activity could consume meaningful Bitcoin block space.
The launch of Citrea stopped the space wars
Bitcoin Core Developer and Chief Security Officer James Lopp called the release “the next great attempt to generate sustainable demand for space.”
Still, a follower pointed out that Citrea users do not lend, trade and settle on the Bitcoin network as described, but on Citrea's Ethereum virtual machine, only storing the Bitcoin proofs, effectively turning Bitcoin into a “filing cabinet” for bulk receipts.
He pointed out that the Citirian “single follower”, moving away from the Chain Treasury and the “10-Party Federation” were more reliable speculations. “You know the difference, you act like you're not pretending,” Lopp said.
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