Protocol Explained

This sections explains the technical architecture of all versions of our protocol.

Open Source Foundations

We are built on the foundations of transparency, open source code, and Know Your Assumptions (KYA).

All anetaBTC code is either already open source or will be open source following proper documentation and audits.

We believe open source code is fundamental for progressing the blockchain industry and aligning the values of decentralization and transparency.

For all versions, anetaBTC is committed to writing open-source code and fostering full KYA to have transparent security assumptions for interacting with the anetaBTC protocol and ultimately protecting users.

Version 1-3 High Level

AnetaBTC is a research-driven protocol. The birth of AnetaBTC is the combination of concepts from research papers including, but not limited to, Bitcoin, wBTC, REN, Ergo, and Interlay. The key part of our approach is writing smart contracts that send Bitcoin to a vault if a user wants to mint anetaBTC. Upon minting, users will be able to freely use anetaBTC as a Bitcoin-backed asset on the Ergo and Cardano blockchains.

Version 1 is under our governance and is not decentralized. For v1, there is a public bitcoin address under our governance. Users send it using the wallet address when minting and our backend programmatically sends it out during redemption. V1 has a vault where BTC is sent to our BTC vault and the off-chain code programmatically verifies the BTC deposit transaction containing metadata with the user’s Cardano address. This is the most centralized version and will become fully decentralized as we transition to v3 implementation.

Version 2 will utilize the Rosen bridge architecture and be under the governance of guardians which consists of well-known projects in the ecosystem and a multi-signature schematic. This approach is uncollateralized and the guardians have custody of the anetaBTC vaults.

Version 3 will be most decentralized where anyone can run a vault by providing collateral. V3’s solution is inspired by the Xclaim whitepaper, where vault operators have a vested interest in maintaining the security of the protocol. Vault operators have the ability to act maliciously, but would lose their collateral, which is less than the amount of BTC they have in their custody. In this case, affected users receive more tokens than the amount of BTC they minted on the protocol.

V1 Technical Architecture

Our technical architecture is designed to prioritize security while also providing an enjoyable user experience when minting and redeeming cBTC.

We believe our implementation is secure as it allows for verifiable and transparent proof of mint and redeem requests on both the Bitcoin and Cardano blockchains.

This is achieved by utilizing metadata to accurately verify the addresses that should receive cBTC or BTC.

Our implementation is based on years of research from the Interlay protocol on Polkadot, as well as research from the Rosen bridge, and our own solution, Mazi, a decentralized, cross-chain address association mechanism for Cardano and Ergo.

Our full V1 technical architecture can be found in our article here.

V2 Technical Architecture

V2 is built using the Rosen framework, which comes with enhanced decentralization, as a group of well-known projects have custody of the vaults, as opposed to V1, which is in the custody of the anetaBTC team.

A full technical breakdown of the Rosen architecture can be found on their Github here.

V3 Technical Architecture

V3 will be most decentralized where anyone can run a vault by providing collateral. V3’s solution is inspired by the Xclaim whitepaper, where vault operators have a vested interest in maintaining the security of the protocol. Vault operators have the ability to act maliciously, but would lose their collateral, which is less than the amount of BTC they have in their custody. In this case, effected users receive more tokens than the amount of BTC they minted on the protocol.

After a successful V2 integration, we’ll focus on delivering the final version, V3, which thus far has been the most researched and perfected. A breakdown of the differences between V2 and V3 can be found here.