What if you could combine the stability of the dollar with the security and freedom of Bitcoin and BOS?
That’s what BIMA Labs now plans to do with its revolutionary USBD token – a US dollar stablecoin backed by BTC in over-collateralized on-chain vaults. By leveraging ZK verification technology provided by BOS, we can create the first cross-chain stablecoin vault secured by cryptography instead of people, providing a seamless experience with USD unencumbered by the traditional banking system.
As it turns out, BOS isn’t only restoring integrity to Bitcoin scaling, but even to fiat currency itself!
The World Needs Bitcoin-Native Stablecoins
Stablecoins are a pivotal component for providing liquidity to the entire crypto-economy. They are the primary currencies of trade, borrowing, and lending for the industry in both CeFi and DeFi alike. They are popular tools in remittance payments and for gig-economy workers, while also showing promise in the context of e-commerce and microtransactions in gaming.
While many have championed bitcoin’s potential to become a currency of the world, the data is clear: stablecoins like Tether (USDT) are becoming the currencies of choice in the geographies where inflation hedges are needed most. As of now, USDT is the one crypto asset with consistently higher trading volume than BTC.
But there’s a problem. The most widely used stablecoins are still dependent on the legacy financial system that crypto seeks to replace, and inherits most of its weaknesses. To maintain stability, these stablecoins are backed primarily by cash and U.S. government debt looked after by big banks.
This is a major centralized trust assumption, and one that’s already failed the industry. In March 2023, Circle’s USDC de-pegged from the USD after Silicon Valley Bank – institutions holding part of Circle’s reserves – collapsed during a bank run. What’s more, centralized stablecoins have frequently been frozen and sanctioned by government orders, which is antithetical to Bitcoin’s freedom-loving ethos.
BIMA and the USBD Stablecoin
What’s needed is a stablecoin that inherits the decentralization of Bitcoin while avoiding the volatility of BTC the asset. Importantly, the asset must not introduce the trust assumptions plaguing legacy stablecoins and existing Bitcoin scaling technologies.
Enter USBD: a USD-pegged stablecoin from BIMA backed by on-chain BTC that never needs to touch the banking system.
To mint USBD, users must lock their own BTC in collateralized vaults to back the tokens, which can be retrieved later once USBD is burned. The collateral must surpass the value of the minted USBD by a ratio of 160%, to provide a cushion for the volatility of the underlying BTC.
BIMA effectively acts as a BTC-borrowing system, where the borrowed dollars are a new type of stablecoin. Should the collateralized BTC drop in value, a portion of that collateral will be liquidated to maintain adequate reserves for USBD.
How BOS Levels Up BIMA
By integrating with BOS, BIMA receives two critical infrastructure improvements to catalyze its long-term success.
Firstly, BIMA can now protect users’ BTC collateral in on-chain vaults secured by Grail – BOS’s cryptographic bridging solution. Grail uses ZK technology to massively reduce the trust assumptions of vaults / cross-chain BTC bridges from an honest-majority (m-of-n) model to an honest singleton (1-of-N) model. This bridge will be the first to restore integrity to Bitcoin scaling, restoring the trustless, cryptography-based principles of the Bitcoin whitepaper.
Secondly, with the powerful interoperability and numerous integrations supported by BOS, BIMA plugs into a massive ocean of BTC liquidity critical to the health of its stablecoin system. USBD will have secure access to multiple DeFi ecosystems that provide trading liquidity for the token, incentivized through staking rewards from BIMA. This ensures USBD stays reliably pegged to the dollar, even when users wish to cash out in large volume.
USBD secured by Grail is a multi-pronged answer to creating decentralized stablecoins, cheap Bitcoin borrowing solutions, and USD-based yield opportunities in the burgeoning world of Bitcoin DeFi.
We’re happy to bring BIMA into the BOS family.
Visit BitcoinOS on X and YouTube for the latest on Bitcoin’s new unlocks, and join the Discord to get to know the community. See the website to register for the $BOS token presale.
Also make sure to check out BIMA’s website, follow them on X, and join their Telegram group.
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