What is BounceBit: Liquidity recovery on Bitcoin

The concept of liquidation, which has gained significant popularity in recent quarters, offers users an exciting opportunity to extract additional value from their held tokens.

Mainly, however, this has been implemented in various Ethereum-based applications.

BounceBit, meanwhile, is offering a BTC recovery infrastructure designed to provide a base layer for a variety of recovery products.

In the following guide, we'll take an in-depth look at how BounceBit works, the Tokinomics behind its home cryptocurrency, and more. Let's dive in.

Quick survey

What is fluid recovery?

Before we explain what BounceBit does, it's important to understand the concept of liquidity recovery that we mentioned above.

You may be familiar with Liquid Staking Protocols and their Liquid Staking Tokens (LSTs). It's a technique that's come to prominence in protocols like Lido. Users can embed their ETH into Lido (or other protocols) and get a synthetic representation of this ETH. This is a new token that should be pegged to ETH 1:1 in value. You can then use this synthetic ETH to perform various operations with other protocols that support it.

Liquid reclamation, on the other hand, is a process that aims to increase the economic security of external systems. Basically, you take your synthetic ETH (your LST) and restake it, receiving another liquid restaking token.

As mentioned above, most LRT protocols are focused on Ethereum due to its proof of stake architecture.

BounceBit, on the other hand, is building a BTC recovery infrastructure designed to provide a layer to bounce products on the Bitcoin network.

How do you do it? Let's look for goodness.

What is BounceBit?

To reimagine the value of Bitcoin, BounceBit offers an infrastructure designed around the belief that Bitcoin should be primarily asset-based at the infrastructure level.

BounceBit differentiates itself as a Proof of Stake layer one ecosystem where validators are required to pay BTC and the native BounceBit token. This will establish a dual-token security system, not only to strengthen the network itself, but also to improve Bitcoin's intrinsic value by allowing owners to play an active role in securing the BounceBit network.

The goal is to provide a symbiotic relationship between BounceBit's native token and BTC to create a versatile and resilient network.

BounceBit integrates with other EVM-compatible networks, including assets embedded on the “Build ‘N' Build” (BNB) Chain and Wrapped Bitcoin (WBTC), such as BTCB.

Now, it's worth noting that when it comes to generating revenue on BTC – there's a unique challenge to Ethereum-related profit-generation protocols. Bitcoin protocols cannot issue returns when BTC is held in multi-signature wallets. This is achieved by integrating BounceBit's Centralized Finance (CeFi) approach, utilizing Mainnet Digital's security services as well as the Cefu Mirror X technology stack.

This basically allows Bitcoin to continue to exist on the chain, as well as participate in business activities on centralized exchanges.

What problems does BounceBit solve?

Solving the lack of clarity

In the year Those around 2022 will remember the transparency issues facing the industry, such as Celsius and others.

BounceBit includes proof-of-chain (PoR), as well as transparency initiatives to restore trust and provide a secure platform for BTC holders to earn interest.

Undoubtedly, BTC holders will face the challenge of having their assets underutilized. BounceBit seeks to meet this challenge by providing a means for their assets to actively participate in the thriving sectors of decentralized finance and NFTs.

Improving the Bitcoin service by enabling more use cases

Expanding on the above, BounceBit promises to expand the overall service of the BTC and Bitcoin network. The goal is to expand the scope of opportunities for BTC holders and use cryptocurrency as a primary asset.

BTC unification across chains

BounceBit identifies the lack of a smart contract platform in the Bitcoin ecosystem as limiting the overall development of dApps and works to provide one.

Understanding the BounceBit infrastructure

BounceBit is building a network that uses the popular Proof-of-Stake (PoS) consensus algorithm to rethink conventional staking models that focus on a single token. They call this approach Dual-Token Proof of Stake (PoS).

In view of the above, it is worth explaining that the architecture of the protocol includes several node operators. These can be chosen as proofs. These are the parties that have to pay BB (BounceBit's native token) and/or BBTC (BTC stored on the BounceBit chain). Their job is to record and verify transactions on the network and receive transaction fees as a reward. As it is a hybrid model, validators can choose to accept BBTC and/or BB tokens.

The purpose of accepting BTC, even though it is embedded in the consensus mechanism, is to launch the protocol using the deep liquidity and relatively low volatility that the Bitcoin network offers.

Sustainable economics

In order to balance the requirements of running the network, BounceBit authorizes the validators to pay a commission on share rewards. This is an approach that attempts to ensure that verifiers are properly compensated for the important role they play in maintaining the strength and functionality of the network.

The BounceBit chain is fully compatible with both the Ethereum Virtual Machine and Solidity. The latter is a programming language mainly used to create smart contracts for Ethereum. This ensures that developer migration will be seamless and leverages the proven security and rich ecosystem of Ethereum.

BounceClub: For owners and members

BounceClub from Apple Inc. It takes inspiration for creative endeavors. An on-chain Web3 world where users are empowered to customize, launch and engage with a variety of dApps.

For BounceClub Owners -> If you meet the requirements to become a BounceClub owner, you can select the desired protocols from the BounceBit App Store and customize the site in a seamless and user-friendly way. There is a full guide on it which you can find here.

Tell BounceClub Members -> You are not interested in BounceClub, you can still browse different clubs created by other users and participate in various Web3 activities. You just need to link your wallet.

The main purpose of the BTC Bridge in the BounceBit ecosystem is to provide a secure way to transfer BTC between the Bitcoin network and other EVM Chains, including BounceBit.

BounceBit's vision and mission is an integral part of its operations and completion.

It is important to note that network authenticators are responsible for maintaining the security of the bridge. Each authenticator also acts as a bridge node. They contribute to the signing of cross-chain messages by taking a multi-step multi-signature approach. You can learn more about BounceBit BTC Bridge here.

Liquid Staking Tokens

BounceBit has a native liquidated smart contract. If users opt-in to receive their BB or BTC stake, they will receive LST (Liquid Staking Token). These are:

stBB – Derived from BB stBBTC – Derived from BBTC (BTC included on BounceBit)

These can later be redistributed to mutual security customers for the purpose of mobilizing security and unlocking liquidation of held assets. LSTs can be easily solved here. Following the redemption request, users must wait 24 hours before submitting a request.

BounceBit Economy: Everything you need to know about BB Tokenomics

First, the BounceBit economy is primarily composed of three types of actors, all of which are relatively self-explanatory.

Users BB Holders Node Operators

BB is a native token that powers the BounceBit platform. The total supply is capped at 2.1 billion (in honor of the 21 million number – Bitcoin's capped supply.)

BB Tokens can be used in many ways, so we'll list a few:

Use BB to participate in the governance process on the chain To participate in the PoS Dual-token method (read above) BB is paid as a reward to validators who validate the network This is the name of gas payments on the network

Here's what the token release schedule looks like:

This is the BB token distribution:

Testnet & TVL Incentive: 4%

Investors: 21%

Team: 10%

Consultants: 5%

Binance Megadrop: 8%

Marketing: 3%

BounceClub and Eco Reserve: 14%

Rewards and Representation Program: 35%

Binance Megadrop: Step by Step Guide

As you can see, Binance Megadrop has 8% of the total supply reserved for it. It is a new token launch platform designed to integrate Binance's Simple Earn and the company's Web3 Wallet.

It aims to give users early access to some Web3 projects before they are listed on the exchange.

The following is a step-by-step guide on how to participate in the Binance Megadrop for BounceBit.

There are two ways to participate and both require a Binance account.

You can register one using this link and get a $600 welcome bonus as a special deal for CryptoPotato readers!

Now that your account is ready, the first thing you can do is go to the Megadrop section and lock your BNB to earn points. From there you can subscribe to BNB and lock in for a certain period of time, so you get results.

As you can see, the longer the subscription period, the higher the multiplier.

The next thing you can do is complete Web3 missions. To do this, you need the Binance Web3 Wallet. You can create one from your Binance mobile app. Go to your “Wallets” tab at the bottom and then tap “Web3” at the top.

From here, simply follow the instructions, and your Web3 wallet will be created. Now that your wallet is complete, go back to the Megadrop section and hit “Start Quest” at the bottom – you should be connected to BounceBit.

You can then follow the instructions that will lead you to mission completion.

The total points you receive will be a combination of your locked BNB points, your Web3 Mission Multiplier, and will also add to your Web3 Mission Bonus. So the formula looks like this.

Total Points = (Locked BNB Points * Web3 Mission Multiplier) + Web3 Mission Bonus.

If you fail to complete all the missions, you will only get a multiplier of 1.

This post is powered by BounceBit.