Satoshi Protocol, a Bitcoin-Backed Stablecoin Project, Hits New All-Time High TVL

Decentralized collateral debt position (CDP) protocol Satoshi Protocol saw its total value locked (TVL) rise earlier this week to reach a new all-time high, according to data from DefiLlama.

The project saw its TVL increase by 150% over the past week and rise by nearly 600% in the past month to reach a record high of $116.5 million at press time.

In mid-December 2024, we reported on Satoshi’s first major spike as the project broke the $20 million mark following a tenfold increase. After several months of stability, the Bitcoin-backed stablecoin project saw a spike at the end of April as its TVL rose from $20 million to over $60 million.

Shortly after a small correction, the protocol’s TVL broke above the $100 million mark on Thursday and set its new record.

Satoshi Protocol is a rapidly growing CDP project that issues a USD stablecoin backed by Bitcoin. Known as satUSD, the stablecoin uses a MakerDAO-like model to unlock Bitcoin liquidity.

Until recently, satUSD was only available on Bitcoin-related layer 2 chains, such as BSquared, BOB, and Bitlayer. It recently expanded to Ethereum layer 2 networks, including Base and Arbitrum. This expansion allowed the protocol to attract nearly $100 million in new liquidity and set its new record.

At press time, Base accounts for the largest share of Satoshi’s TVL, with over $53 million, followed by Arbitrum, which has $43 million in locked assets.

BSquared continues to hover close to the $20 million mark that it reached in mid-December.

satUSD aims to maintain its $1 price through over-collateralization, allowing users to mint the stablecoin at a 110% collateralization ratio. They can deposit BTC derivatives like clBTC and uBTC.

The token’s design also includes a peg mechanism and an instant liquidation module. When the price drops below $1, arbitrageurs can buy the stablecoin and redeem it for $1 worth of BTC from the protocol’s reserves.