A non-custodial, on-chain Bitcoin wrapping service for the Cardano and Ergo networks. Built on Ergo.
anetaBTC is being built on top of the Ergo blockchain, and will be useable on Cardano through cross-chain DEXs that offer swaps across both blockchains. So when you use anetaBTC on Cardano you will be using wrapped, wrapped Bitcoin. Smart contracts, written in Ergo script, will control the vault where the user's BTC is locked up, and will also automate the minting of anetaBTC, an Ergo native asset, and send it to the user’s wallet on the Ergo blockchain. The smart contracts for the anetaBTC protocol will be open sourced once completed.
Minting anetaBTC Tokens
Users send a request to the contract and are then given an address to send their BTC to. Once receipt of this BTC on the anetaBTC bridge (a bridge between the Ergo and Bitcoin blockchains, on which there is a wallet where the user’s BTC is stored) is confirmed by the contract it mints, 1:1, anetaBTC and sends it to the user’s target wallet on the Ergo blockchain.
To initiate the above process uses must first lock up some ERG, it doesn’t say how much, as collateral in the anetaBTC bridge. This measure is put in place to prevent spamming of the bridge and the contract. If the user does not send their BTC in an allotted amount of time (not given) then the issue request is canceled and the vault keeps the collateral.
anetaBTC’s tokenomics are split across two blockchain, Cardano and Ergo, with 50% of their tokens on each blockchain. The tokens on Ergo are called NETA and the tokens on Cardano are called cNETA. Collectively these tokens are called NETA. All of the profits from the netaBTC platform, i.e. transaction fees, are distributed between NETA holders on a pro-rata basis based on their NETA token holdings.
To retrieve BTC from the bridge the above process is simply reversed. For retrieving BTC from the bridge users do not need to deposit collateral.
Fees are mentioned in the project's materials however their size is not stated.
A LISO and a NETA Liquidity Fund
LISO stands for Liquidity Stake Pool Offering. It works like a typical ISPO, where users delegate to the pool to receive part or all of their rewards in the protocol's token. As is the norm with ISPOs the margin of the NETA pools have been increase to almost the maximum, 99%. This means they keep 99% of the ADA rewards and, instead of the typical ADA rewards, delegators receive the platform's Cardano native token, cNETA.
anteaBTC’s pools are not run by anetaBTC, instead a third party, Spire Blockchain, has been employed to run their stake pool operations.
What gives this ISPO the name LISO is that 90% of the ADA rewards received by anetaBTC are injected into a community owned (managed by the DAO) liquidity fund called the “NETA Liquidity Fund”. The ADA injected into this fund is used to buy multiple assets including: BTC, ERG, MIN, KNC, and NETA. The fund’s holdings are then used to provide liquidity to anetaBTC’s partner DEXs.
Yield rewards generated by this fund will be reinvested back into the fund to facilitate compound growth of the fund. The distribution of the DEX platform tokens that are earned by this fund are split 30:70, with 30% being airdropped, pro-rata, to holders of anetaBTCs protocol tokens, and the other 70% being reinvested in the fund.
The protocol’s team and advisors are receiving 25% of the protocols tokens, meaning that these individuals have a 25% stake in governance and receive 25% of the rewards from this NETA Liquidity Fund.
It is stated that the LISO is going to last a few years, while the fate of the NETA Liqudity Fund is in the hands of the community through DAO governance.
anetaBTC aims to be managed by its community members through a DAO. The platform's NETA tokens, on both Cardano and Ergo, will be used to vote on protocol changes. The tokens on both chains carry the same weight. Through the DAO token holders can change the parameters of the liquidity fund mentioned above and even choose to liquidate it if they wish.
It will be interesting to see how cross-chain decentralized governance is implemented by the team.
Aneta Angel NFTs
The Aneta Angels NFT collection started life as rewards for community members delegating to the LISO. This was then opened to anyone during the mint.
anetaBTC state that they want to provide long term utility for their NFTs, however there is little information on the utility they will provide in the future. Currently they provide token reward bonuses for LISO delegators who also hold an Antea Angels NFT.