SU₿FROST
OVERVIEW OF SUBFROST
What Is SUBFROST?
Our primarily focus is generating BTC yield for our users, while providing liquidity to platforms built on Bitcoin L1 smart contract ecosystems (currently only Alkanes is live).
Why We Exist
SUBFROST exists to unite Bitcoin's store of value properties with the innovative financial capabilities that have driven growth in other blockchain ecosystems.
Our approach is through bringing yield to Bitcoin holders without requiring them to move their assets to other chains, and providing BTC liquidity to platforms built on programmable metaprotocols (such as Alkanes, BRC2.0).
Problems SUBFROST Solves
1. Limited Bitcoin Utility
Bitcoin is primarily used as a store of value or investment vehicle. SUBFROST transforms BTC into a productive asset through wrapping, staking, and yield generation across the emerging Bitcoin DeFi landscape.
2. DeFi Accessibility for Bitcoin Holders
Bitcoin holders are hesitant to use other blockchains due to security concerns, complexity, or technical barriers. SUBFROST provides a Bitcoin-native DeFi experience that feels familiar and secure, all in one intuitive platform.
3. Yield Generation for BTC
Bitcoin itself doesn't generate yield. Through SUBFROST's staking mechanisms, users can earn yield while maintaining full exposure to BTC.
4. Governance Participation
Though the most secure blockchain, Bitcoin lacks native governance mechanisms. SUBFROST introduces a governance system that allows community members to participate in protocol decisions while being rewarded for it.
BITCOIN YIELD
BITCOIN YIELD
Yield in Bitcoin
For users, we're essentially a "Bitcoin High-Yield Savings Account":
- Users stake their BTC with us in the simplest way possible (1 transaction). The user receives dxBTC, which represents their staked BTC.
- Their BTC is wrapped into frBTC (trustlessly and atomically), and placed in our yield vault.
- We deploy this frBTC into market-neutral strategies and over-collateralized lending protocols across Bitcoin L1, earning yield regardless of BTC price movement.
- We pass this yield back to our users in the form of BTC.
- Users unstake their BTC with us in the simplest way possible (1 transaction). The dxBTC leaves their wallet and is replaced with BTC.
FROST stakers (in addition to securing the protocol) vote on which audited platforms we can deploy liquidity from our yield vault into.
SUBFROST will benefit the entire DeFi ecosystem on Bitcoin L1 while rewarding users with yield in a simple and secure way—currently unheard of in the industry.
Where We Are
We are built on Alkanes as it is the only programmable metaprotocol (smart contracts) live on Bitcoin Layer-1. We are committed to interoperability and will evaluate and expand onto future programmable metaprotocols like BRC2.0, when they are ready for mainnet.
SUBFROST TOKENS
SUBFROST TOKENS
frBTC (not yet released)
Backed 1:1 with BTC and never leaving the Bitcoin blockchain, frBTC will never lose its peg to BTC.
frBTC is DeFi-compatable BTC, enabling users to fundamentally participate in DeFi on L1, namely, Alkanes. The reason frBTC is necessary is because native BTC has limited functionality beyond sending/receiving/paying network fees with it. Therefore, the ecosystem demands a compatible BTC synthetic, similar to WBTC, but with far fewer trust assumptions and never leaving the Bitcoin blockchain.
Tokenomics: The exact amount of circulating frBTC will always be the exact amount of BTC in SUBFROST's reserve.
dxBTC (not yet released)
dxBTC is a yield-earning BTC token representing staked BTC in SUBFROST's yield vault. Users maintain full exposure to BTC while earning an APY in BTC. Users can easily unstake this back to BTC directly, in a single transaction.
Tokenomics: The exact amount of circulating dxBTC will always be the exact amount of BTC deployed to SUBFROST's yield vault.
FROST (not yet released)
The SUBFROST protocol token. All protocol fees are used to buy & burn FROST, driving value to holders by increasing demand and decreasing supply.
Example to illustrate this process:
- A user/entity wraps 1 BTC to frBTC and they pay a small fee of 0.10% to do this
- SUBFROST collects this 0.001 BTC fee and automatically buys FROST tokens from the open market
- SUBFROST then burns these FROST tokens
Tokenomics: SUBFROST aims to be a foundational piller of the DeFi ecosystem on Bitcoin L1, maximizing value creation for holders and stakers of FROST for as long as Bitcoin miners are mining Bitcoin. Therefore, this will not be a "fair mint", as this is not a community token.
Currently, this 1B FROST (expected) is allocated in the following ways:
- 15% to investors where equity converts to FROST, with a lockup/vesting period (we are raising!)
- 85% to team, builder, and community incentive programs; our goal is to maximize alignment between incentives and the best possible long-term outcomes of SUBFROST
PROTOCOL SECURITY
PROTOCOL SECURITY
Trustless Wrapping & Unwrapping
The wrap from BTC to frBTC is atomic, while the unwrap from frBTC to BTC is the most secure and fault tolerant cryptographic mechanism ever developed (called SUBRAIL) but is subject to Bitcoin's block speed.
Implementation of F.R.O.S.T. on Bitcoin
Similar to staking in the most secure of PoS networks, SUBFROST identifies the top 255 stakers as potential signers, and then randomly selects 170 of them.
This is an implementation of F.R.O.S.T. (Flexible Round-Optimized Schnorr Threshold signature scheme) to facilitate the trustless federated unwrap, and which we have named our protocol token after.
Violator's BTC is at Stake
These stakers are highly incentivized to uphold the tightest security standards, and highly disincentivized to operate with anything less than honest behavior, as they are actually staking frBTC/FROST LP.
This means violations result in the slashing of signer's BTC directly, along with their FROST tokens. Violations will range in slashing of 5-100% of the dishonest signers stake.
GET INVOLVED
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