What is BounceBit: Liquid Recovery in Bitcoin?

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

However, this has predominantly been applied in a variety of ethereum-based applications.

bouncebitOn the other hand, it offers a btc recovery infrastructure designed to provide a foundational layer for various recovery products.

In the following guide, 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 fluid recovery?

Before explaining what BounceBit does, it is important to understand the concept of liquid recovery that we mentioned earlier.

You may be familiar with liquid staking protocols and their liquid staking tokens (LST). It is a mechanism that rose to fame with protocols like Lido. Users can stake their eth on Lido (or other protocols) and receive a synthetic representation of this 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 recovery, on the other hand, is a process intended to increase the economic security of external systems. In essence, you can take your synthetic eth (your LST) and stake it again, receiving another token called a liquid reset token.

As mentioned above, most LRT protocols are increasingly focusing 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 for product recovery on the bitcoin network.

How they did it? Well, let's find out.

What is Bounce Bit?

In an attempt to reimagine the value of bitcoin, BounceBit proposes an infrastructure designed based on the conviction that bitcoin should be predominantly powered by infrastructure-level assets.

BounceBit differentiates itself as a proof-of-stake layer one ecosystem where validators must stake btc and the native BounceBit token. This establishes a dual token security system that aims to strengthen the network itself but also improve the intrinsic value of bitcoin by providing its holders with an active role in validating the BounceBit network.

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

BounceBit also takes advantage of 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 is worth noting that when it comes to generating yield on btc, there is a unique challenge that is inherently different from the yield generating protocols associated with ethereum. bitcoin protocols cannot generate returns when btc is held in multi-signature wallets. This is what BounceBit faces by integrating a centralized finance (CeFi) approach, leveraging Mainnet Digital's custody services as well as Ceffu's MirrorX technology stack.

This essentially allows bitcoin to maintain its on-chain presence while also engaging in trading activities on centralized exchanges.

What problems does BounceBit solve?

• Address lack of transparency

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

BounceBit incorporates on-chain proof of reserve (PoR), while maintaining transparent activities in a bid to restore trust and offer a secure platform that allows btc holders to earn interest.

Without a doubt, btc holders face the challenge of their assets being underutilized. BounceBit seeks to address this challenge by providing them with a means to actively engage their assets in the thriving decentralized finance and nft sectors.

• Improving bitcoin utility by enabling additional use cases

By extension of the above, BounceBit is also committed to expanding the overall utility of btc and the 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 overall development of dApps and is working to provide one.

Understanding 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 dual-token proof-of-stake (PoS).

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

The purpose of accepting btc, albeit staked, in the consensus mechanism, is to power the protocol with the deep liquidity that the bitcoin network has to offer, while also taking advantage of its relatively lower volatility.

• Sustainable validator economics

In an attempt to balance the requirements for operating the network, BounceBit allows 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.

The BounceBit chain is fully compatible with both the ethereum Virtual Machine and Solidity. The latter is the programming language predominantly used to create smart contracts for ethereum. This ensures that the migration for developers is seamless while taking advantage of ethereum's proven security and rich ecosystem.

• BounceClub – for owners and members

BounceClub is inspired by Apple Inc.'s drive to innovate. It is an on-chain Web3 world where users can customize, launch and interact with various dApps.

For BounceClub Owners -> If you meet the criteria to be a BounceClub owner, you will be able to select the desired protocols in the BounceBit App Store and customize the space seamlessly and in a very user-friendly way. There is a complete guide you can find. here.

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

The primary goal 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 realization 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 signing of cross-chain messages, taking the multi-signature approach several steps further. You can learn more about the BounceBit btc Bridge btc-bridge” data-wpel-link=”external” target=”_blank”>here.

Liquid Stake Tokens

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 – derived from betting BB
• stBBTC – derived from staking BBTC (btc staked on BounceBit)

These can then be re-staked to Shared Security Clients with the aim of adding security and unlocking liquidity from the staked assets. LSTs can be redeemed here simply standing out. After the redemption request, users must wait 24 hours before they can claim.

BounceBit Economy: Everything you need to know about BB Tokenomics

First things first, the BounceBit economy is primarily made up of three types of actors, all of which are self-explanatory:

• Users
• Ball holders
• Node operators

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

BB tokens can be used in multiple ways, so we will list some of them:

• 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 to validators who protect the network
• It is the name of the gas rates in the network.

This is what the token release schedule looks like:

This is the distribution of the BB token:

Testnet and TVL Incentive: 4%

Investors: twenty-one%

Equipment: 10%

Advisors: 5%

Binance Mega Crash: 8%

Market creation: 3%

BounceClub and Ecosystem Reserve: 14%

Betting Delegation and Reward Program: 35%

Binance Megadrop: step by step guide

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

Its goal is to provide users with early access to certain Web3 projects long before they appear 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 also earn a $600 welcome bonus as an exclusive offer for CryptoPotato readers!

Now that your account is ready, the first thing you can do is navigate to the Megadrop section and lock your BNB to earn scores. From there, you can subscribe to your BNB and lock it for a set period of time, thus earning a score.

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 so, you will need Binance Web3 Wallet. You can create one from your Binance mobile app. Navigate to the “wallet” tab at the bottom and then tap “Web3” at the top.

From here, simply follow the instructions and your Web3 wallet will be generated. Now that your wallet is complete, return to the Megadrop section and press “Start Mission” at the bottom; you will have to bet with BounceBit.

From there, you can follow the instructions that will guide you to complete the mission.

The total score you receive will be a combination of your locked BNB score, your Web3 mission multiplier and will also add your Web3 mission bonus. So the formula looks like this:

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

If you do not complete all the missions, you will receive a multiplier of only 1.

This post has been developed by BounceBit.

<!– ai CONTENT END 1 –>