BSD Overview

The Bitcoin Synthetic Dollar

The Bitcoin Synthetic Dollar (BSD or "Based Dollar") is a digital dollar backed by Bitcoin. With BSD you can lock your Bitcoin as collateral and led yourself dollars. BSD is not issued by a bank and does not run on bank rails so nobody can freeze, inflate, or confiscate your dollars. BSD represents a Bitcoin based future without compromise: Hold your Bitcoin forever and spend your dollars today.

The protocol follows an over-collateralized lending model, similar to Maker, Liquity, and historic gold-backed currencies. It runs on the Stacks blockchain and uses sBTC for programmable Bitcoin collateral.

This design unlocks superpowers for Bitcoin holders:

  • Bitcoin Liquidity: Hold your Bitcoin forever AND spend dollars today.

  • Bankless Lending: Infinite term, high collateral ratio, borrower set interest rate, no diligence.

  • Security: Deposit pure Bitcoin. Collateral secured by Stacks miners.

  • Decentralized: No counter parties. No rehypothication. No bankruptcy risk.

  • Simplicity: Bitcoin only collateral. No DAO. No farming. No bullshit.

How BSD works

Borrowing

You lock your sBTC in a vault and mint BSD against it. You can borrow up to a 110% collateral-to-debt ratio. This loan has no fixed term; it can stay open forever as long as you manage your collateral.

Liquidations

If your vault's collateralization ratio falls below the minimum of 110%, it gets liquidated.

  • The Stability Pool—a reserve of BSD deposited by other users—repays your debt.

  • In exchange, your sBTC collateral is transferred to those Stability Providers.

  • You keep the BSD you originally borrowed, but you lose your collateral. Given the ~110% collateral level at liquidation, your net loss is minimal in immediate dollar terms.

Redemptions & The Peg

BSD maintains a soft peg to the dollar through a Bitcoin redemption mechanism.

  • If BSD trades below $1, it's profitable for anyone to buy cheap BSD and redeem it for $1 worth of sBTC from the system. This reduces the BSD supply and pushes the price back up. Redemptions always target the vaults with the lowest interest rates first.

  • If BSD trades above $1, it's profitable to borrow BSD against your Bitcoin and sell it. This increases the BSD supply and pushes the price back down.

This constant arbitrage creates a price floor and ceiling, keeping BSD pegged to the dollar without relying on a central party.

Why choose BSD

  • Retain Your Stack: You get the dollars you need today while keeping your original Bitcoin collateral. You maintain exposure to both assets, capturing all the upside of your BTC.

  • True Decentralization: Your Bitcoin collateral is locked in Stacks smart contracts and secured by a decentralized network of validators, not held by a centralized custodian.

  • Perpetual Credit Line: The protocol functions as a flexible credit line, allowing you to borrow and repay without fixed terms or extension penalties.

  • Superior Capital Efficiency: BSD offers high efficiency with a loan-to-value (LTV) of up to ~91%, which is significantly higher than most alternatives.

  • You Set the Terms: With user-set variable interest rates, you have direct control over your borrowing costs and your risk of being redeemed.

  • Zero Intrinsic Cost: Because BSD is minted directly against sBTC collateral, there is zero intrinsic cost of capital, allowing for fundamentally lower borrowing rates.

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