Hello! BlockTalkers & Blockchain Enthusiastic!
We recently hosted an AMA with acBTC, on November 11th at 1.00 PM UTC. Many of you might have participated or many of not. But we make sure no one missed out from the knowledge shared by Terry Lam, Co-Founder at acBTC so here we are up with the AMA transcript, for those who missed the live session, this blog post will be a saver & feeder of knowledge for them.
Terry — My background spans across primary and secondary capital markets covering commercial and product strategies. I started my career with S&P Global, a U.S. credit rating agency in driving product strategies for the investment management segment. After leaving the corporate space in 2016, I started a foreign exchange trading affiliate platform. This project actually angled me into the crypto and blockchain space.
We started NUTS Finance in 2018, with the motivation to leverage blockchain technology to improve existing workflows within the financial services industry. The first product we launched was the NUTS Platform, it is a blockchain agnostic middleware solution.
Introduction Questions Asked By Team BlockTalks
Q1. Could you please introduce acBTC to our community in layman’s term?
Ans — acBTC is actually our first project targeting the retail crypto users. The mission is to introduce the most usable form of Bitcoin on Ethereum. acBTC is designed to be a more efficient collateral asset. Allowing holders of acBTC to get better collateralization ratio by using acBTC as collateral. And how we came upon the idea of acBTC was actually from a group of BTC miners.
We approached them with our enterprise solutions (NUTS Platform), and they explained to us some of the problems they were facing with their Bitcoin positions (ie. monthly capex). So we explored further and wanted to introduce a loan product which enables miners to better collateralize their BTC. Hence, acBTC was born.
We just published an introduction for acBTC on Medium, can check this out.
acBTC(ACoconut BTC) is a synthetic ERC20 BTC with integrated saving, swap and loan.
Q2. What are the advantages of acBTC to the other alternatives in the Blockchain field?
Ans — acBTC is a composite asset made up of a basket of ERC20 BTC. The objective is to become the most usable form of Bitcoin on Ethereum. Right now there are a number of players in the ERC20 BTC space. Namely, Wrapped Bitcoin (WBTC) is the leader right now with approx. approx. 100k bitcoins minted on the ethereum network. Next up, we have renBTC, who has approx. 30k bitcoins minted on the ethereum network.Also the projects are tackling the liquidity bridging problem from a technology standpoint. ie. decentralization, security, speed, etc.
For acBTC, we are leveraging what these projects have already done. They have already bridged Bitcoin over to the Ethereum network. We are offering a more comprehensive and usable ecosystem for ERC20 BTC. So in short, the existing projects are providing bridging solution from native Bitcoin network to Ethereum network. acBTC is providing more secure, composable and efficient DeFi applications servicing all ERC20 BTC.
Q3. What are the major milestones acBTC achieved so far & what are in the future pipeline?
Ans — acBTC ecosystem is a collection of protocols. So we have divided our features into phases. It is important for us to stay focus to ship products that users want. Our acSwap application was launched on October 25. And we released acYield application on 10/31.
Now our focus is to promote the acSwap application to increase usage. And at the same time we are building the acLoan application which we aim to launch whitepaper at the end of this year and mainnet launch in Q2 2021. We will launch AC DAO and xcSwap application in Q1 2021. To learn more about our roadmap, you can see it in our onepager ~
Questions Asked on Twitter For acBTC Team!
Q1. acBTC is independently audited. What are the conditions of this audit to generate trust in users and how transparent it is? Where can we see the result of this audit?
Ans — Security comes before everything and it is our highest priority to ensure our applications are SAFU. Hence, we have established a long-term partnership with SECBIT Labs when we first started building the NUTS Platform.
SECBIT Labs is reputable security auditing firm in the Blockchain and DeFi space and they have been very supportive throughout the entire development process. In addition, we pay extremely close attention to new vulnerabilities and attacks incurred by other projects in the space. But the most important thing is to always DYOR.
Our project is open source, you can check our github for all the products we have built since 2018.
Welcome to ACoconut BTC/acBTC! ACoconut BTC is a synthetic ERC20 BTC token backed by a basket of ERC20 BTC tokens. It's…
Also you can read the phase one and phase two full audit report by SECBIT here:
Phase One Report ~
Phase Two Report~
Q2. How does acBTC tackle the problem of usability for ERC20 BTC?
Ans — The key issues faced by ERC20 BTC users, including:
1.Over collateralization requirement in existing lending protocols is sidelining a large volume of BTC liquidity from entering the DeDi space.
2.Reliance on centralized custodian and/or secluded network verification nodes could potentially lead to system failure.
3.Tradeoff between cost and timeline associated with the mint and redemption process of ERC20 BTC.
Therefore, acBTC ecosystem is made up of a collection of protocols designed to maximize usability, mitigate single point of failure and reduce user friction for ERC20 BTC users. The acBTC ecosystem includes a series of applications, including acSwap, acYield, xcSwap, acLoan.
acSwap = users can swap between ERC20 BTC at minimal slippage and reduced transaction fees.
acYield = an auto asset allocation protocol to help ERC20 BTC holders optimize returns on their ERC20 BTC holdings.
xcSwap = a cross-chain swap solution, enabling the exchange between native BTC and ERC20 BTC.
acLoan = a hybrid loan/option application, enabling users to borrow/lend by using acBTC as a more efficient form of collateral asset.
In short, acBTC is an ecosystem designed to provide the maximum security and usability for native BTC and ERC20 BTC holders.
Q3. What are the major advantages of acSwap exchange over similar decentralized applications? What algorithm is it based on?
Ans — As we mentioned above, users can swap between ERC20 BTC at minimal slippage and reduced transaction fees with acSwap. The acSwap application is built based on an AMM model referencing Curve’s StableSwap mathematical model. Curve has built a robust swap protocol where they are able to control slippage.
With acSwap, we took that to another level by modifying the amplification coefficient parameter where slippage is even more tightly controlled within a predefined range bound. By adjusting ‘ac’ in the formula, we are able to reduce slippage given the same amount of liquidity depth for the token pool on a relative basis.
Users can select the maximum slippage tolerable in the acSwap application. The minimum amount is 0.1%. However, given there is sufficient liquidity to facilitate the order, slippage should not occur. It is only in the case where the order submitted exceeds the liquidity pool. In that case, it will be useful for the user to set a tolerable value for slippage. If a user sets the slippage at 0.1%, the order may not be fully filled. However, the slippage can be fully controlled. In terms of cost efficiency, Curve currently charges 0.04%. acSwap charges 0.02%.
Also, we have done a lot of work around the design of acSwap to be able to achieve a min. gas fee relative to existing swap protocols (given similar network gas conditions).
Q4. What are the differences between acSwap and acXcSwap?
Ans — acSwap is an application where holders can exchange between ERC20 BTC at minimal slippage and competitive transaction fees. Example: if a user is holding WBTC and would like to swap for renBTC for whatever reason.
He/she can use the acSwap function. Relative to existing swap applications (DEXes), acSwap offers minimal slippage and lower swap fees.
On the other hand, xcSwap represents cross-chain Swap. This is an application where holders of native BTC can exchange for acBTC or any other forms of ERC20 BTC. So in short, acSwap = swapping between ERC20 BTC. xcSwap = exchanging between native BTC with ERC20 BTC
Q5. What are the 2 mining pools that acBTC has opened and how to participate in them?
Ans — There are 2 liquidity mining pools open currently.
1/ HODLER — users can stake acBTC to earn AC and acBTC! It is a dual reward earning pool
2/ Straddle — AC holders can stake Uniswap ETH-AC LP tokens to earn more AC
To participate in HODLER, users would need to mint acBTC with WBTC or renBTC first.
This can be done via https://app.acbtc.fi/mint Right now the APY for participating in HODLER is approx. 20%
To participate in Straddle, users would need to get Uniswap LP tokens by staking AC and ETH via https://app.uniswap.org/#/add/ETH/0x9a0aba393aac4dfbff4333b06c407458002c6183/ Once you have the Uniswap LP token, you can stake via https://app.acbtc.fi/rewards/pool1
Right now, the APY for Straddle is approx. 270%
Questions Asked by our BlockTalks Community Members during live Session to acBTC Team!!
Q1. Governance is an crucial issues that projects try to take advantage. How acBTC plans to offer a decentralized and efficient governance that satisfies the community
Ans — acBTC ecosystem is setup as a DAO. So with the DAO structure, we rely extensively on community governance to grow and maintain the acBTC ecosystem. Initially our team would need to set the foundation in order to introduce the DAO structure. And right now, we are still in a very early stage in terms of the project timeline.
Not saying we want to put all the rules and guidelines in stone, because the fact is, it is likely to change. So, to answer the question in short, we have a governance framework. But we don’t have the details yet. Meaning, we have the AC token which is a governance token behind the acBTC ecosystem. Of course, AC DAO is on our roadmap. we aim to initiate it in Q1 2021
Q2. What is total supply of acBTC? Where we can buy it? Are your plans to focus on market or to grow community?
Ans — We are in the 6th week since acBTC started, the circulating supply is 1,008,000 now. The total supply which means the max cap is set to 21mm AC.
To get acBTC, users would need to mint acBTC with WBTC or renBTC first. This can be done via https://app.acbtc.fi/mint We focus on our products for sure. But we also know the importance of community for a project. Also we need to grow this two parts at the meantime.
Q3. What mechanism will #acBTC use to keep its price equal to btc. Will you use a token burning elastic supply or buy back mechanism?
Ans — acBTC is backed by a basket of ERC20 BTC,it is not a stablecoin. Also the ERC20 BTC selected in the basket are all 1:1 backed by native BTC. Keep in mind that only ERC20 BTCw with physical backing of native BTC is enlisted in the composite basket. So ultimately, acBTC price = BTC price.
Q4. Token burn is beneficial for any project, in being able to control the number of token circulation and to provide greater incentives to investors. Does acBTC have a plan about token burn?
Ans — There’s no token burn mechanism for the AC token. However, the way we capture value for AC holder is through buyback using revenue collected from our applications.
Example: transaction fees collected from the acSwap application will be used to buy AC. Along with our acYield application, where management fees will be used to swap for acBTC which would be used to reward liquidity providers.
Essentially, our liquidity mining program is carefully designed to create value for AC holders and liquidity providers.
Q5. What are your most important next priorities until the end of 2020? Are the fundamental tools sufficient to achieve these goals?
Ans — The next priority is still our product — acLoan. But meanwhile, we need to promote the acSwap application to increase usage. For acBTC, the metric is simply the amount of acBTC minted.
Our goal for this year is 2,000 acBTC. Because that would put us in the 5th spot in the ERC20 BTC minted by volume. With our development of team and the increase usage of acSwap, we can achieve the goal.
Q6. What are the requirements for staking and rewards?
Ans — As we mentioned, there are two mining pools open currently For HODLER pool, users can stake acBTC to earn AC AND acBTC! It is a dual reward earning pool
For Straddle pool, AC holders can stake Uniswap ETH-AC LP tokens to earn more AC.