Thanks all for participating in our acBTC AMA. We really appreciate all your support. There were really good and thoughtful questions that were asked. For those who missed our AMA, this blog post is for you.
Mayank – Hello @NUTS_admin welcome to CryptoNationIN 🥳 Glad to have you with CryptoNationIN🎊
Terry – Hello @NUTS_admin welcome to CryptoNationIN 🥳 I am glad to meet you guys here today.
Mayank – Before we start, can you please introduce yourself and give our community a bit of understanding of what kind of business background you come from and how you have applied it to your roles within acBTC?
Terry – Sure, let me introduce my background and acBTC shortly. My background spans across primary and secondary capital markets covering commercial and product strategies. I started my career with S&P Global, a U.S. credit rating agency in driving product strategies for the investment management segment. After leaving the corporate space in 2016, I started a foreign exchange trading affiliate platform. This project actually angled me into the crypto and blockchain space. We started NUTS Finance in 2018, with the motivation to leverage blockchain technology to improve existing workflows within the financial services industry. The first product we launched was the NUTS Platform, it is a blockchain agnostic middleware solution. The problem we are trying to solve with the NUTS Platform is to empower financial application builders by providing secure, composable and simple-to-use technology toolkits.
Our second product is acBTC (acbtc.fi), which we will spend most of today’s time to talk about. acBTC is a composite Bitcoin solution on Ethereum that aggregates swap, savings and lending applications into a single platform. Ultimately, acBTC aims to serve as the most usable form of ERC20 BTC on Ethereum.
Mayank – What a start, Amazing introduction it is 🔥
Q1. How many products are there in acBTC? And which products are the core of acBTC?
Terry – The acBTC ecosystem is made up of a series of decentralized protocols (applications). Namely: acSwap, acVault, xcSwap and acLoan. acSwap is a decentralized swap protocol designed specifically for ERC20 BTC pairs. ERC20 BTC holders can exchange between ERC20 BTC at controlled slippage and competitive transaction fees. acVault is an asset allocation optimizer designed to maximize yield of the deposited assets at optimal risk/reward levels. acVault enables ERC20 BTC holders to optimize returns on their ERC20 BTC holdings by allocating and rebalancing across various yield generating protocols. xcSwap stands for cross-chain swap, it enables the exchange between Bitcoin and ERC20 BTC through a Decentralized Merchants Network. The goal of xcSwap is to provide Bitcoin holders a secure, non-custodial and cost efficient solution in moving BTC between networks. acLoan is a decentralized loan protocol, designed to enable acBTC holders to borrow stablecoins against acBTC at a flexible loan-to-value ratio. The goal of acLoan is to introduce a more efficient form of lending and borrowing by incorporating user determined intrinsic value of collateral and interest rates driven by market equilibrium. Below outlines a typical use case of an ERC20 BTC holder and how they could leverage the acBTC ecosystem to optimize their workflow. Bob is Bitcoin maximalist and he is looking for alternative solutions to generate a passive yield on his Bitcoin holdings while maintaining maximum flexibility with his positions. To leverage the Ethereum DeFi ecosystem, Bob can utilize xcSwap to exchange his Bitcoin to acBTC. Bob can then deposit acBTC into acVault to generate a passive yield on his acBTC position. To prepare for his upcoming property tax bill, Bob plans to take out a loan by collateralizing a portion of his acBTC with acLoan. After a few months into using the acBTC ecosystem, Bob is also learning the ropes of the vibrant DeFi ecosystem on Ethereum. He has identified a WBTC yield generating strategy which he would like to test out. Bob can then utilize acSwap to exchange his acBTC to WBTC.
Q2. Is there any difference between the acSwap and xcSwap? Can you please elaborate more on both?
Terry – As we mentioned, both of these are a swap application. It has some differences.
acSwap is an application where holders can exchange between ERC20 BTC at minimal slippage and competitive transaction fees. Let’s make an example : If a user is holding WBTC and would like to swap for renBTC for whatever reason. He/she can use the acSwap function. Relative to existing swap applications (DEXes), acSwap offers minimal slippage and lower swap fees.
On the other hand, xcSwap represents cross-chain Swap. This is an application where holders of native BTC can exchange for acBTC or any other forms of ERC20 BTC.
So in short, acSwap = swapping between ERC20 BTC. xcSwap = exchanging between native BTC with ERC20 BTC.
We have the Incentive Rewards for acSwap users recently. A chance to win up to 1,000 AC Tokens
Q3. What are the reasons and objectives of acVault? why is this smart contract necessary? I did not understand it from other projects this concept (Vault)
Terry – acVault is an auto asset allocation protocol to help ERC20 BTC holders optimize returns on their ERC20 BTC holdings. Example: a user holding WBTC can deposit WBTC into acVault to generate the best possible return. The return is generated by allocating user’s assets across different DeFi protocols and liquidity mining pools. acVault can help ERC20 BTC holders optimize return on their ERC20 BTC holdings. Similar to YFI’s Earn application. But the biggest difference is acVault runs strategy strictly for ERC20 BTC.
The acVault application will charge a management fee, the management fee is collected in WBTC or renBTC, which then is used to buy acBTC (contributing to swap fee application), and paid to liquidity pool providers. So users can maximize returns by just hold acBTC and AC.
For the question about smart contract
The purpose of having a Smart Account is to minimize cost for enabling these applications mentioned above in the future. The Smart Account is uniquely tied to your wallet, it is non-custodial and only you have authorization over the Smart Account.
If you want to know more about our applications, join our community and feel free to ask.
Q4. What are the 2 mining pools that acBTC has opened and how to participate in them?
Terry – There are 2 liquidity mining pools open currently.
1/ HODLER – users can stake acBTC to earn AC AND acBTC! It is a dual reward earning pool.
2/ Straddle – AC holders can stake Uniswap ETH-AC LP tokens to earn more AC. To participate in HODLER, users would need to mint acBTC with WBTC or renBTC first.
This can be done via https://app.acbtc.fi/mint. Right now the APY for participating in HODLER is approx. 20%
To participate in Straddle, users would need to get Uniswap LP tokens by staking AC and ETH via https://app.uniswap.org/#/add/ETH/0x9a0aba393aac4dfbff4333b06c407458002c6183/.
Once you have the Uniswap LP token, you can stake via https://app.acbtc.fi/rewards/pool1.
Right now, the APY for Straddle is approx. 220%.
Except the mining reward, you can get the reward by using our swap too. https://twitter.com/NUTSFinance/status/1326697751426420737.
Q5. What measures are you taking to keep prices stable for a long time? Most investors’ interest is only from a price perspective, not from a long-term perspective. How do you deal with all this?
Terry – Everyone wants to know about price actions. So if you look at the way we design the liquidity mining pools, the first pool is Big Blind, which is to incentivize miners to deposit renCrv to earn AC. This pool was designed to attract liquidity from Curve Pool’s 5 to help us bootstrap our acSwap application (WBTC, renBTC liquidity). Big Blind lasted for almost 3 weeks, it ended on 10/23. Went through a migration and turned into HODLER pool. The value capture for HODLER is the swap fee application. Right now you can stake acBTC to earn AC + acBTC (collected from acSwap application fees, including redeem fee and swap fee now). For those who missed out on Big Blind, you can still participate in HODLER. The second pool is Straddle, which allows AC holders to stake ETH-AC tokens to earn AC. This pool was designed to reduce the rate of dump while we get the acSwap application up and running. The design mechanism of each pool is used to help AC holders capture value of AC. Finally, the fees collected in the Swap application is in acBTC, it is then used to buy AC from the market (reducing supply) and to reward pool participants. Since it’s still a new asset, so we cannot sell acBTC now. Once there’s stable pricing for acBTC, the fees collected will be sold to buy AC to reward AC holder. And acVault is another great way for AC holders to capture value. Meaning, we will introduce strategies to optimize returns for various forms of ERC20 BTC (ie. WBTC, renBTC to begin with). The acVault application will charge a management fee, the management fee is collected in WBTC, which then is used to buy acBTC (contributing to swap fee application), and paid to liquidity pool providers. So in short, to prevent miner dumps, we have a range of strategies via liquidity pool for us to help AC holders capture value.
Q6. What mechanism will #acBTC use to keep its price equal to btc. Will you use a token burning elastic supply or buy back mechanism ?
Terry – acBTC is backed by a basket of ERC20 BTC,it is not a stablecoin. The ERC20 BTC selected in the basket are all 1:1 backed by native BTC. Keep in mind that only ERC20 BTC with physical backing of native BTC is enlisted in the composite basket.So ultimately, acBTC price = BTC price. There’s no token burn mechanism for the AC token. However, the way we capture value for AC holder is through buyback using revenue collected from our applications. Example: transaction fees collected from the acSwap application will be used to buy AC.
Q7. How will NUTS Finance gain revenue from their products such as acBTC and xcBTC? What fees do you take from investors?
Terry – This actually is our business model. The business model is the fees collected from various applications. acSwap has a swap transaction fee, acUSD(acLoan) has interest fees, xcSwap has an exchange fee. A portion of the fees collected will be distributed to Liquidity Providers and acBTC holders. The remaining fees will go to the AC Treasury Vault for continuous project development purposes.
Q8. Is acBTC open source and can anyone contribute to your ecosystem? How?
Terry – Of course, acBTC is open source. You can check our github for all the products we have built since 2018. https://github.com/nutsfinance/acBTC.
There are few ways you can contribute. Become a liquidity provider – we are opening new liquidity mining pools each week, LPs can earn AC which in turn have rights to partake in ecosystem governance.
2/ Become a Community Dealer – this is like an ambassador program where you actively promote and help grow the acBTC ecosystem.
3/ Become a user of our applications and complete weekly missions posted in our Discord channel (mission includes retweet our announcements, introduce a friend about acBTC, etc.)
4/ Become a tester – we have a bug bounty program where you can help us locate bugs in our application.
Q9. Could you give me 2 or 3 key points to convince me and other angel investors invest in acBTC in long-term?
Terry – 1/ if you believe in Bitcoin’s narrative as digital gold and ethereum’s composability, then acBTC combines the best of both worlds. acBTC aims to be the most usable Bitcoin on Ethereum and our objective is to roll out the most usable financial applications.
2/ AC token upholds the acBTC ecosystem. It is the fuel that powers the engine. 71.4% allocated to the community via liquidation allocation and 28.6% for developer allocation. No pre-mine or presale.
3/ Team, we are not an anon project, our track record dates back to 2018. You can visit our github to see what we’ve built in the past.
Ultimately it comes down to our vision, which is to continue to leverage blockchain technology to build cool products to make the traditional financial workflow more efficient. Most importantly, do you own research, check our team’s background, our track record. And spend maybe 10 minutes to read the first few pages of our whitepaper, try our product. I am sure you will find acBTC to be the most usable form of Bitcoin on Ethereum.
Q10. You have set the goal to reach 2k acBTC tokens minted in 2020. Why this number specifically?
Terry – For acBTC, the metric is simply the amount of acBTC minted. Our goal for this year is 2,000 acBTC. Because that would put us in the 5th spot in the ERC20 BTC minted by volume. Right now the first one is WBTC, and second one is renBTC. So for this year, we want to achieve the 5th one.
Thank you to Terry Lam (Co-Founder), and Community for participating in the AMA. Have a nice day