[In-depth Interpretation] BTCD is a decentralized stablecoin supported by Bitcoin | Based on Bitcoin - an arbitration network developed by Elai Cloud Bel2 | A non-custodial. decentralized stablecoin solution

A very innovative stablecoin - BTCD. It is endorsed by Bitcoin and integrates a number of cutting-edge technologies to try to find a perfect balance between decentralization and stability. Next, we will analyze its core mechanisms and value in depth. BTCD is essentially a stablecoin supported by Bitcoin. Unlike mainstream stablecoins, it adopts a non-custodial and decentralized model. Its core technical support includes zero-knowledge proof, gold-silver coin agreement (ELA/FIST as silver assets), and an arbitration network developed by Bitcoin-Ela.com Layer 2 (BeL2), inspired by the new Bretton Woods system, with the goal of building a new economic order linked to assets. Decentralization is a key highlight of BTCD. It adopts the 2-of-3 P2WSH multi-signature locking mechanism on the Bitcoin main network to ensure that no single entity can control user funds. From the perspective of the regular loan cycle, users lock in BTC collateral to mint BTCD. When repaying, both parties need to cooperate to unseal the mortgage to avoid single point of control. In case of disputes, the borrower can protect his rights through the BeL2 arbitration network. The arbitrator must pledge the assets and will be punished if he violates the rules. When a loan defaults, the system will perform programmatic liquidation in accordance with preset terms and there is an asset recovery security mechanism. Users can unilaterally unlock assets under specific circumstances to ensure the safety of funds. However, BTCD also faces the potential risk of collusion between the issuer and the arbitrator. It has been dealt with through cryptographic proof and economic constraints, and will introduce improvement plans such as multi-arbitrator consensus in the future. In terms of value risk management, BTCD's protective option hedging scheme is very distinctive. During the 90-day lock-up period, the probability of bankruptcy caused by the plunge in Bitcoin price is reduced to nearly zero through approximately 60% over-collateralization and purchase of BTC put options. In the current implied volatility environment of 45-55%, the interest paid by users can usually cover the cost of options, and the agreement will also dynamically adjust the interest rate according to market conditions to balance profits and risks. At the same time, BTCD has a risk fund, a DAO governance mechanism, etc., to disclose key data in real time to ensure the system is transparent and stable. BTCD has also innovatively launched a Gold and Silver Double Asset Coin (GSM) mechanism, where borrowers can pledge ELA or FIST as supplementary mortgages, which will be included in the total mortgage after discount, improve LTV, and while ensuring the security of BTC custody, it can improve capital efficiency and borrowing flexibility. In the future, BTCD will gradually promote decentralization, support open participation of arbitrators and nodes, and ultimately achieve complete independence of community governance and technical infrastructure. With its unique technical architecture and risk control system, BTCD brings new possibilities to the stablecoin field. However, whether it can continue to gain a foothold in the market depends on the actual implementation effect and market acceptance, and we will continue to pay attention to its development. [Note⚠️, cryptocurrencies are high-risk investments, and you may lose all your principal. If you don’t understand, it is recommended not to participate. This video does not have any investment advice, it is only used as information sharing]