BSD Overview
The Bitcoin Synthetic Dollar
The Bitcoin Synthetic Dollar (BSD or "Based Dollar") is a digital dollar backed by Bitcoin. It's not issued by a bank and doesn't run on banking rails. It's just you, your Bitcoin, and the code. With the BSD Protocol, you can lock your Bitcoin as collateral and lend yourself BSD. Nobody can freeze, inflate, or confiscate your dollars. This is a Bitcoin-based future without compromise: hodl forever, spend dollars today, and never sell a single Satoshi.
The protocol is a simple, 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. Crucially, you set your own interest rate. This rate determines your place in the redemption line.
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 US 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.
The BSD Difference: Why We Win
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 for the bitcoin synthetic dollar, allowing for fundamentally lower borrowing rates.
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