BILLAU — Bitcoin Integrated Liquid Loan Asset Utility

Are you an L-BTC holder who needs immediate funds but refuses to sell your Bitcoin? Or are you an L-U$Dt holder seeking guaranteed, fixed-term returns?

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Inspiration

 BILLAU — Bitcoin Integrated Liquid Loan Asset Utility is a decentralized lending protocol that brings AAVE's battle-tested architecture (TVL: U$D69Bi) to Bitcoin's Liquid sidechain using formally verified smart contracts. Built with SimplicityHL and adapted for the UTXO model, Fantasma enables users to supply assets, borrow against collateral, and participate in a trustless lending market with mathematical guarantees of correctness.

What it does

We solved two problems for different parties by connecting them to secure a loan through our platform. One party needs a loan to purchase an asset or cover an unexpected expense without selling their L-BTC holdings at Liquid Network. The other has L-U$Dt in custody but desires a certain return over a period.
 Our solution first establishes a smart contract with the party interested in providing liquidity in exchange for interest (L-U$Dt for example). The platform then holds these funds in custody so that a second party (the borrower) can use them, leaving collateral (L-BTC for example). This is done while respecting the maximum borrowing ratio of 85% of the collateral provided, ensuring that the liquidity provider is paid, both when the loan term expires and in the event of depreciation of the collateral. Therefore, to prevent the borrower from being liquidated in this operation, it is recommended that they borrow below this percentage in current market value to absorb exchange rate fluctuations between these assets in a healthy way. If the collateral depreciates, or the borrowed asset appreciates relative to the collateral, the borrower can contribute more capital as collateral to keep the borrowed asset ratio below 85% of the collateral.

How we built it

Used technologies: Our project belongs to the Simplicity track. Frontend in React and TS (TypeScript, i.e., Javascript + Types), which connects via Rest API with Backend in Python and FastAPI, which in turn connects via SDK Elements with Liquid Network's Tetnet, performing validation with SimplicityHL (High Level inspired by Rust, compiled in Simplicity).

Challenges we ran into

Getting the block height for timelocks without relying on an oracle; obtaining an absolute timestamp to use in the timelock.

Accomplishments that we're proud of

Building a functional app (frontend and backend) and successfully testing Simplicity on the testnet.

What we learned

Simplicity syntax and practical usage.

What's next for BILLAU — Bitcoin Integrated Liquid Loan Asset Utility

Testing on mainnet and go into production.

Built With

  • elements
  • fastapi
  • i.e.
  • javascript-+-types)
  • liquid
  • performing-validation-with-simplicityhl-(high-level-inspired-by-rust
  • python
  • react
  • rest
  • rust
  • sdk
  • simplicity
  • simplicityhl
  • testnet
  • ts
  • which-connects-via-rest-api-with-backend-in-python-and-fastapi
  • which-in-turn-connects-via-sdk-elements-with-liquid-network's-tetnet
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