Since their inception in 2009, one of the main challenges associated with cryptocurrencies has been their notorious runaway volatility. For many investors, this volatility was one of the few shortcomings in an otherwise revolutionary innovation that would completely transform modern finance.
Higher volatility in crypto markets means higher investment risks. It is also challenging to observe, establish, and predict trends in a market with wild price fluctuations. Therefore, regardless of how attractive cryptocurrencies are as an asset class, investors continue having a lot of hardships when timing their investments and strategizing for any gains whatsoever.
Stable Coins as a hedge to crypto volatility
As a solution to the rampant volatility witnessed in cryptocurrency markets, stablecoins are essentially price-stable tokens whose value is tied to traditional assets like the dollar, effectively providing an antidote to rampant volatility. While there are multiple types of stablecoins, we'll focus on fiat-pegged or crypto-backed same-price assets to begin our journey.
Mitigate the volatility problem, creating a solid store of value to act as a savings account that offers transparent, sustainable yield in a decentralized manner.
Low Trading Fees and lower slippage in stablecoins trading
Earn Yield on Price Stable Assets
Earn Native Bitcoin without fear of losing your tokens to centralized intermediaries.
By specializing in price-stable asset trading, Bitflow aims to help its customers benefit from a low-fee trading protocol, and reward liquidity providers & native BTC holders without giving up control to anyone.
Our primary objective is to ensure that liquidity providers and stablecoin use can swap, trade, and earn yield in a secure and affordable decentralized exchange supported by a robust reward distribution system.
Our incentive mechanism allows liquidity providers and Bitcoin holders to participate in different applications of our DEX protocol, like earning yields by providing liquidity to stablecoin pools, and boost their rewards by locking up native BTC in "BitFlow Escrow", to earn higher rewards.
As a decentralized protocol, BitFlow members participate in governance votes to define how the platform operates, the fees we charge, the emission schedule, and the products we provide on the exchange.
The following are the prime considerations from our potential stable swap protocols users, how much they value these features and how relevant they are to the BitFlow product roadmap. (Survey #1, July 15, 2022)
1) Low fees on price-stable token swaps
Our survey reveals that 68% of users would be satisfied if Bitflow offered the lowest fees on price-stable token swaps.
The majority of customers (up to 93%) responded that they would be delighted with the potential of Bitflow offering the lowest fees on price-stable token swaps, allowing them to maximize their savings.
2) Yields on price-stable token swaps
The survey reveals customers' position as a premium on earning yields on price-stable token swaps, with a 74% dissatisfaction rate, for not providing attractive yields to liquidity providers. On the other hand, the satisfaction rate would reach approximately 58% with this feature integrated into Bitflow.
The results demonstrate that customers consider this a practical feature and a must-have (at 64%) for a stable swap protocol. And while it is a must-have, customers would also be delighted to earn yields conservatively in a low-risk protocol.
3) A boost on liquidity pool rewards using native BTC
When boosting their LP rewards using native BTC in non-custodial escrow, customers would be delighted (up to 74%) to earn higher rewards from our stable swap protocol.
Their satisfaction would also grow in proportion to how well this feature would work on Bitflow. The level of customer satisfaction would reach up to approximately 66% on the boosting LP reward feature on Bitflow. In comparison, the dissatisfaction would peak at around 38% if this s not possible.
4) Yields on native BTC held in non-custodial escrow;
The survey also confirmed that customers would be delighted (80%) at earning yields on native BTC held in non-custodial escrow. The sentiment is that this performance feature would inspire more confidence among Bitcoin users, with the level of customer satisfaction reaching 68% of users.
So why now?
Despite a turbulent crypto market, we've seen a nearly 100% increase in the market cap of stablecoins YTD, and we're confident that stablecoin adoption will continue to grow. (17% of total crypto market cap, up from 9% in Jan/22 - Figure 19).
The root of the problem: people want to earn a yield on bitcoin, but the mistake they make is letting someone else control their money.
Our Protocol will offer users several advantages over traditional swap protocols, including boosted rewards with our Non-Custodial BTC escrow and no need to hold a governance token. With Bitflow, you can add liquidity to your favorite stablecoin pairs and earn rewards in the same underlying token without letting someone else control your hard-earned money.
Vision: Our Tokenomics will create network effects by bringing more Stacks liquidity to Bitcoin holders and more Bitcoin to Stacks DeFi protocols.
Our tokenomics create network effects by bringing more Stacks liquidity to Bitcoin holders and more Bitcoin to Stacks DeFi protocols. Going forward, we can expand to capture liquidity from the total price-stable market on all chains, and over time attract more users looking to offset volatility in crypto markets and lower investment risks.