v1: Borrow/Lend
BIMA’s v1 borrow/lend protocol is a streamlined, efficient layer for Bitcoin-backed stablecoin liquidity.
Overview: Variable-Yield Efficiency for BTC Liquidity
BIMA combines stability and simplicity with a variable lending rate for USBD. This ensures fair, sustainable returns for lenders while offering borrowers reliable access to capital against their collateralized assets.
The protocol creates a secure, over-collateralized environment where BTC-backed USBD can be leveraged productively without volatility or uncertainty.
How It Works
BIMA v1 operates on a straightforward model with two primary functions: lending for passive yield and borrowing for liquidity.
Lending Flow
Lenders deposit USBD into BIMA’s lending pool and earn a variable annual yield. The system distributes interest to lenders proportionally based on their share of the pool.
Variable Rate: The yield is ranged within a 7-12% range, providing lenders with market rate returns.
Auto-Compounding: Interest accrues automatically, growing the lender's position over time.
Liquidity On-Demand: Lenders can withdraw their USBD at any time, subject to the pool's utilization rate.
This approach removes interest rate uncertainty, making USBD a reliable yield-bearing asset for BTC-backed liquidity.
Borrowing Flow
Minters/holders deposit USBD into the protocol to access liquidity. All loans are over-collateralized to protect lenders and system health.
Variable Borrowing Cost: Borrowers can plan and deploy capital effectively with the variable interest rate.
Over-Collateralization: To borrow $100, a borrower must lock $150 worth of USBD or collateralized assets.
Flexible Repayment: Interest accrues on the borrowed amount, and borrowers can repay at their convenience.
This variable-rate structure allows borrowers to unlock capital with full visibility into their borrowing costs, while lenders benefit from consistent, sustainable returns.
Liquidation Process
To maintain health and stability, BIMA automatically liquidates under-collateralized loans:
If a loan’s collateral value falls below the required ratio, it is flagged for liquidation.
Collateral is partially liquidated to restore the required ratio and repay the debt.
Lenders remain fully protected, as over-collateralization ensures loan recovery.
This automated mechanism protects both lenders and the protocol while incentivizing borrowers to maintain healthy positions.
USBD as a Yield-Bearing Asset
The variable lending rate transforms USBD into a productive, yield-bearing asset. For lenders, USBD offers consistent, auto-compounding returns. For borrowers, it unlocks capital without selling Bitcoin-backed collateral, ensuring BTC liquidity remains within the ecosystem.
USBD can now serve as both a stable source of income and a tool for unlocking liquidity—creating a circular flow that enhances capital efficiency across the BIMA protocol.
Benefits
Lenders: Earn a variable 7-12% annual yield on USBD deposits with ranged returns and auto-compounding interest.
Borrowers: Access liquidity at a stable borrowing rate without selling BTC-backed collateral.
The Ecosystem: Achieve sustainable BTC-backed liquidity while fostering adoption and growth for USBD.
Why It Matters
BIMA’s borrow/lend v1 introduces flexibility, stability, and capital efficiency to BTC-backed stablecoins. We remove complexity, reward participants, and ensure USBD remains a reliable and productive asset within the ecosystem.
In this v1 release, BIMA sets the foundation for a future where Bitcoin-backed liquidity generates stable yield, unlocks seamless borrowing, and powers the next generation of decentralized finance.
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