What is BounceBit: Liquid Restaking in Bitcoin

The concept of liquid payback, a topic that has gained significant popularity in recent quarters, offers users the exciting possibility of extracting additional value from their staked chips.

Predominantly, however, this has been applied in various Ethereum-based applications.

BounceBit, on the other hand, offers a BTC recovery infrastructure designed to provide a base layer for various recovery products.

In the guide below, we take a closer look at how BounceBit works, the tokenomics behind its native cryptocurrency, and more. Let’s dive in.

Quick Navigation What is Liquid Restocking?

Before explaining what BounceBit does, it’s important to understand the concept of liquid recovery that we mentioned above.

You may be familiar with liquid staking protocols and their liquid stake tokens (LSTs). It is a mechanism that gained prominence with protocols such as the Lido. Users can stake their ETH on Lido (or other protocols) and receive a synthetic representation of that ETH. This is a new token that is supposed to be pegged to the value of ETH 1:1. They could then use this synthetic ETH to perform various operations with other protocols that support it.

Liquid staking, on the other hand, is a process aimed at increasing the economic security of external systems. In essence, you can take your synthetic ETH (your LST) and take it back, receiving another token called a liquid token.

As mentioned above, most LRT protocols are increasingly focused on Ethereum due to its Proof of Stake architecture.

BounceBit, on the other hand, is building a BTC restoration infrastructure designed to provide a layer for re-creating products on the Bitcoin network.

How do they do it? Well, let’s find out.

What is BounceBit?

In an attempt to reimagine the value of Bitcoin, BounceBit proposes an infrastructure designed based on the belief that Bitcoin should be primarily based on infrastructure-level assets.

BounceBit differentiates itself as a Proof of Stake layer ecosystem where validators are required to stake BTC and BounceBit’s native token. This establishes a dual-token security system that aims to strengthen the network itself, but also enhance the intrinsic value of Bitcoin by providing holders with an active role in validating the BounceBit network.

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

BounceBit also leverages interoperability with other networks that support EVM, incorporating staked assets such as BTCB on-chain “Build ‘N’ Build” (BNB) and Wrapped Bitcoin (WBTC).

Now, it’s worth noting that when it comes to generating yield on BTC, there is a very unique challenge that is inherently different from the yield generation protocols associated with Ethereum. Bitcoin protocols cannot generate returns when BTC is held within multi-signature wallets. This is what BounceBit tackles by integrating a centralized financial approach (CeFi), leveraging Mainnet Digital’s custody services as well as Ceffu’s MirrorX technology stack.

This essentially allows Bitcoin to maintain its presence on the chain, while engaging in trading activities on centralized exchanges.

What problems does BounceBit solve? Addressing the lack of transparency

Those who were in 2022 remember the transparency issues that plagued the industry through Celsius and others.

BounceBit incorporates Proof of Reserve (PoR) into the chain, while maintaining transparent activities in an attempt to restore trust and provide a secure platform that allows BTC holders to earn interest.

BTC holders undoubtedly face the challenge of underutilization of their assets. BounceBit aims to address this challenge by providing them with a means to actively engage their assets in the thriving sectors of decentralized finance and NFTs.

Improving the utility of Bitcoin by enabling additional use cases

As an extension of the above, BounceBit is also committed to expanding the overall utility of the BTC and Bitcon network as a whole. The goal is to expand the scope of opportunities for BTC holders and leverage the cryptocurrency as a major asset.

Unifying BTC across chains

BounceBit identifies the absence of a smart contract platform within the Bitcoin ecosystem as a limitation to the global development of dApps and is working to provide one.

Understand the BounceBit infrastructure

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

In view of the above, it is worth explaining that the architecture of the protocol incorporates a series of node operators. These can be selected as validators. These are the parties that have to stake BB (BounceBit’s native token) and/or BBTC (stake BTC on the BounceBit chain). Their job is to record and verify transactions on the network and as a reward: they receive transaction fees. Since this is a hybrid model, validators can choose to accept BBTC and/or BB tokens.

The purpose of accepting BTC, although staked, in the consensus mechanism, is to bootstrap the protocol with the deep liquidity offered by the Bitcoin network, while taking advantage of its relatively lower volatility.

Sustainable Validator Economy

In order to balance the requirements to operate the network, BounceBit empowers its validators to charge a commission on staking rewards. This is an approach that attempts to ensure that validators are adequately compensated for the important role they play in maintaining the robustness and functionality of the network.

BounceBit’s chain is fully compatible with both the Ethereum Virtual Machine and Solidity. The latter is the programming language primarily used to create smart contracts for Ethereum. This ensures that the migration for developers is seamless, while leveraging Ethereum’s proven security and rich ecosystem.

BounceClub – For owners and members

The BounceClub is inspired by the effort of Apple Inc. for innovation. It’s a chained Web3 world where users have the ability to customize, launch and interact with multiple dApps.

For BounceClub owners -> If you meet the criteria to own a BounceClub, you can select the desired protocols in the BounceBit App Store and customize the space in a seamless and user-friendly way. There is a full guide on this which you can find here.

For BounceClub Members -> Suppose you are not interested in operating a BounceClub, you can still browse the various clubs created by other users and participate in various Web3 activities. You should only connect your wallet.

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

It is a critical component of the functionality and completion of BounceBit’s vision and purpose.

It is important to note that network validators are responsible for maintaining the security of the bridge. Each validator also operates a bridge node. They contribute to the cross-chaining of messages, taking the multisignature approach further. You can learn more about the BounceBit BTC Bridge here.

Liquid betting chips

BounceBit has a native liquid staking smart contract. If users choose to stake their BB or BTC, they will receive an LST (Liquid Staking Token). These are:

stBB: derivative of BB staking stBBTC: derivative of BBTC staking (BTC staked on BounceBit)

These can subsequently be redistributed to shared security clients with the aim of adding security and unlocking the liquidity of shared assets. LSTs can be redeemed here by simply deactivating. After the redemption request, users must wait 24 hours before they can claim.

BounceBit Economics: Everything you need to know about BB Tokenomics

First of all, BounceBit’s economy is primarily made up of three types of players, all of which are relatively self-explanatory:

Users BB Holders Operators of the node

BB is the native token that powers the BounceBit platform. The total supply is limited to 2.1 billion (in homage to the number 21 million – the limited supply of Bitcoin).

BB tokens can be used in a number of ways, so here are a few:

Use BB to participate in the on-chain governance process Stake BB to participate in the Dual-token PoS mechanism (read above) BB is paid as a reward for validators securing the network Is the denomination of gas fees in The net

Below is the token release schedule:

This is the distribution of the BB token:

Testnet and TVL incentives: 4%

Investors: 21%

Equipment: 10%

Advisors: 5%

Binance Megadrop: 8%

Market creation: 3%

BounceClub & Ecosystem Reserve: 14%

Rewards Program and Staking Delegations: 35%

The Binance Megadrop: Step by Step Guide

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

It aims to provide users with early access to certain Web3 projects long before they appear on the stock market.

Below 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 also win a $600 welcome bonus as an exclusive offer 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 get scores. From there, you can subscribe to your BNB and lock it for a certain period of time, earning a score.

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

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

From there, just follow the instructions and your Web3 wallet will be generated. Now that your wallet is complete, go back to the Megadrop section and click “Start Search” at the bottom; you will have to bet with BounceBit.

From there, you can follow the instructions, which will guide you towards the completion of the mission.

The total score you receive will be a combination of your blocked BNB score, your Web3 Mission Multiplier and will also add your bonus from your Web3 Mission. So the formula looks like this:

Total Score = (Locked BNB Score * Web3 Quest Multiplier) + Web3 Quest Bonus.

If you don’t complete all the missions, you will get a multiplier of only 1.

This post was powered by BounceBit.

SPECIAL OFFER (Sponsored) Binance Free $600 (Exclusive to CryptoPotato): Use this link to register a new account and receive an exclusive welcome offer of $600 to Binance (full details).

2024 LIMITED OFFER for CryptoPotato Readers on Bybit – Use this link to register and open a $500 BTC-USDT position on Bybit Exchange for free!