Product comparisons

Introduction

The Bitcoin Stable Dollar (BSD or Based Dollar) is a digital dollar backed by Bitcoin. With the Based Protocol you can lock your Bitcoin as collateral and lend yourself BSD without relying on traditional intermediaries. This document outlines BSD's key strengths and limitations and compares its features against several alternative crypto lending protocols and platforms.

BSD strengths across alternatives

• Infinite liquidity: Many Bitcoin lending services rely on dollars or treasury backed stablecoins. BSD is minted directly against Bitcoin collateral. Therefore the borrowing potential is only limited by Bitcoin's market cap and not by stablecoin supplies. (Note: Collateral is currently capped on Based for security).

• Flexible credit-line Structure: BSD loans function a credit lines with no fixed terms or extension penalties, enabling borrowing and repayment on the user's timeline.

• Borrower-set interest rates: Borrowers set their own rates and can adjust weekly. This dynamic, borrower-driven market, combined with BSD having zero intrinsic cost of capital leads to lower effective borrowing costs.

BSD common limitations vs. alternatives

• Redemptions: To maintain the a soft-peg to USD, BSD allows redemptions for underlying collateral. Borrowers must manage their user-set interest rates carefully to minimize redemption risk, though automated rate management tools can be delegated.

• Lower trading liquidity: As a new asset, BSD might exhibit lower market liquidity compared to established stablecoins, potentially causing higher slippage when trading.

BSD vs. Ledn

Key Differences

• Ledn is a CeFi lender that holds your Bitcoin in custody, while BSD is a smart contract–based lending protocol on Stacks that secures BTC via a decentralized network of validators.

• Ledn offers fixed-rate loans (around 10-12% APY plus additional fees), whereas BSD’s user‑set, variable rates tend to be significantly lower.

• Ledn’s conservative LTV is around 50%, while BSD achieves much higher efficiency (up to ~91% LTV).

• Ledn uses fixed loan terms with penalties for extension; BSD functions as a credit line, allowing flexible, fee‑free borrowing and repayment.

• Ledn distributes treasury‑backed stablecoins or cash, whereas BSD mints a synthetic asset native to Stacks.

Conclusion

If you value decentralized, non‑custodial collateral, lower borrowing costs, and flexible, credit lines, BSD is the superior choice. If you prefer traditional CeFi custodians with bank integration and regulated services, then Ledn may be your preferred option.

BSD vs. Lava

Key Differences

• Lava uses DLCs to lock Bitcoin non-custodially, whereas BSD uses Stacks smart contracts to lock sBTC non-custodially on the Stacks layer.

• Lava's liquidations depend on Lava's centralized infrastructure, which introduces centralization and counterparty risk, while BSD liquidations are triggered on-chain via decentralized oracles and smart contracts.

• Lava heavily integrates traditional banking functionalities, while BSD operates purely within the DeFi ecosystem without direct native TradFi integration.

Conclusion

If you value a transparent, fully on-chain DeFi process with liquidations governed by open protocol rules and no reliance on centralized intermediaries, BSD offers a more aligned approach. If you are comfortable with some centralization risk, desire traditional finance integration, and desire more fiat integration, then Lava should be considered.

BSD vs. Morpho/Coinbase

Key Differences

• Morpho utilizes cbBTC, which is centralized and secured by Coinbase custody. BSD utilizes sBTC, which is decentralized and secured by Stacks miners.

• Users of Morpho borrow existing USDC, an established and widely-used stablecoin, whereas users of BSD mint BSD, a native asset unique to the Based Protocol.

• Interest rates on Morpho are variable and market-driven, determined by supply and demand within its liquidity pools, while BSD features user-set variable interest rates, offering borrowers direct input on their borrowing costs.

Conclusion

If you value decentralized, trust-minimized custody of your Bitcoin collateral, then BSD utilizing sBTC is a superior option. If you value an established stablecoin like USDC and are comfortable with your Bitcoin collateral being held by a custodian, then Morpho may be your preferred option.

BSD vs. Granite Protocol

Key Differences

• Granite utilizes aeUSDC, which is described as a centralized, treasury-backed stablecoin that is then bridged from Ethereum L1 to Stacks over another centralized bridge. BSD mints an asset directly on Stacks with no bridging or custody risks.

• Granite sources its aeUSDC from lenders who require compensation, creating an unavoidable cost of capital, while BSD mints BSD directly against sBTC with zero intrinsic cost of capital, allowing its user-set APY to be fundamentally lower.

• Granite offers partial liquidations, allowing borrowers to maintain some of their position during a downturn, whereas BSD utilizes standard full liquidations.

Conclusion

If you prioritize the lowest possible APY coupled with bridge-free native stablecoin issuance, BSD is a better option. If you value partial liquidations and an established (though bridged) stablecoin like aeUSDC, then Granite may meet your needs.

BSD vs. Hermetica

Key Differences

• Hermetica is a swap, not a loan—you exchange your BTC for USDh (effectively selling your Bitcoin exposure)—whereas BSD functions as a true loan. When you mint USDh, you lose direct BTC exposure; with BSD, you retain both the dollars and your Bitcoin collateral.

• Hermetica mints USDh using sBTC, but the system’s Bitcoin is held by centralized custodians; in BSD, your sBTC remains on Stacks, secured by a decentralized network of validators.

• Hermetica uses a hedging strategy that generates yield, whereas BSD lacks a native yield mechanism aside from opportunities in the stability pool.

Conclusion

If you prefer to maintain direct Bitcoin exposure while borrowing at a low, adjustable APY and retaining a claim to your BTC collateral regardless of price movement, BSD is a better option. If you’re comfortable exchanging your BTC for a yield-bearing stablecoin and accepting custodian risk, Hermetica may better suit your needs.

BSD vs. Sovryn Zero

Key Differences

• Sovryn Zero targets the lowest collateral ratio (CR) vaults for redemption. This can unexpectedly force even well-collateralized borrowers out of their Bitcoin exposure. BSD targets the lowest user-set interest rate (APY) vaults, giving borrowers separate control over redemption risk.

• Interest Model: Sovryn Zero: 0% APY + one-time fee. BSD: User-set variable APY, paid continuously.

• Platform & Collateral: Sovryn Zero uses Rootstock (RSK) and RBTC, while BSD uses Stacks and sBTC.

Conclusion

If you prioritize predictable loan stability and direct control over redemption risk, BSD provides a more reliable and borrower-centric model. If you are considering Sovryn Zero for its 0% interest (plus fee), it's crucial to understand that its redemption logic, which targets the lowest collateralized vaults, can introduce severe and unpredictable risks to your position.

BSD vs Arkadiko Finance

Key Differences

• Arkadiko primarily utilizes STX tokens as the main collateral for its loans, although it also offers support for sBTC, whereas BSD exclusively uses sBTC, thereby providing a borrowing experience purely backed by Bitcoin.

• In the event its primary liquidation pools are depleted, Arkadiko likely relies on its DIKO governance token to act as a backstop, which introduces risks associated with an external token's performance and liquidity, while BSD employs an internal Redistribution mechanism that allocates uncollateralized debt and its corresponding collateral among existing borrowers, keeping such risks contained within its core sBTC and BSD assets.

• Arkadiko features a distinctive "self-repaying" loan structure, where the yield generated from Stacking the STX collateral can be used to automatically pay down the loan's principal over time, whereas BSD functions as a perpetual credit line that requires active repayment by the borrower or is managed through the protocol's redemption and liquidation processes.

Conclusion

For loans purely collateralized by Bitcoin (sBTC) within a straightforward credit line structure, and you prefer a backstop mechanism that relies on internal protocol assets rather than an external governance token, BSD offers a better solution. If you're comfortable with STX serving as the main collateral along with the potential risks associated with a governance token forming part of the backstop mechanism, then Arkadiko may be the more suitable option.