Bitcoin-Backed Stablecoin System

A decentralized stablecoin protocol implemented on the Stacks blockchain, allowing users to create stablecoins backed by Bitcoin (BTC) collateral. The system implements a CDP (Collateralized Debt Position) model with built-in governance, price oracle integration, and liquidation mechanisms.

Features

• BTC-collateralized stablecoin minting
• Dynamic collateralization ratio management
• Automated liquidation system
• Multi-oracle price feed support
• Governance controls for risk parameters
• Emergency shutdown capability
• Stability fee mechanism

System Parameters

• Minimum Collateralization Ratio: 150%
• Liquidation Ratio: 120%
• Annual Stability Fee: 2%
• Maximum Allowed Price: 1,000,000,000
• Minimum Allowed Price: 1
• Maximum Collateral Ratio: 1000%
• Minimum Collateral Ratio: 101%
• Maximum Stability Fee: 100%

Core Functions

Vault Management

(create-vault (collateral-amount uint))
(mint-stablecoin (amount uint))
(repay-debt (amount uint))
(withdraw-collateral (amount uint))

Liquidation System

(liquidate (vault-owner principal))

Price Oracle

(update-price (new-price uint))

Governance

(set-minimum-collateral-ratio (new-ratio uint))
(set-liquidation-ratio (new-ratio uint))
(set-stability-fee (new-fee uint))

Security Features

• Reentrancy protection
• Emergency shutdown mechanism
• Price validity checks
• Authorization controls
• Parameter boundary validation

Prerequisites

• Stacks blockchain environment
• Clarity smart contract support
• Access to BTC price oracle
• Governance token implementation

Installation

1. Clone the repository
2. Deploy the contract to the Stacks blockchain
3. Initialize the system with initial BTC price
4. Set up oracles and liquidators

Usage

Creating a Vault

;; Transfer collateral and create a vault
(contract-call? .stablecoin create-vault u1000000)

Minting Stablecoins

;; Mint stablecoins against deposited collateral
(contract-call? .stablecoin mint-stablecoin u500)

Managing Risk Parameters

;; Update minimum collateral ratio (restricted to governance)
(contract-call? .stablecoin set-minimum-collateral-ratio u160)

Risk Management

The system implements several risk management mechanisms:

1. Minimum Collateralization Ratio (150%)

   • Ensures adequate collateral backing
   • Provides buffer against price volatility

2. Liquidation Mechanism

   • Automatic liquidation at 120% ratio
   • Incentivized liquidator network

3. Price Oracle System

   • Multiple oracle support
   • Price validity checks
   • Maximum/minimum price bounds

4. Emergency Controls

   • System-wide emergency shutdown
   • Parameter adjustment capabilities
   • Governance oversight

Architecture

graph TD
    A[User] -->|Create Vault| B[Vault System]
    B -->|Check Ratio| C[Risk Engine]
    C -->|Price Feed| D[Oracle System]
    B -->|If Unsafe| E[Liquidation]
    F[Governance] -->|Update Params| C

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Contributing

1. Fork the repository
2. Create your feature branch (git checkout -b feature/your-branch)
3. Commit your changes (git commit -m 'Add amazing feature')
4. Push to the branch (git push origin feature/your-branch)
5. Open a Pull Request

Testing

# Run the test suite
clarinet test tests/bitstable-core.test.ts

Future Improvements

• Implement multi-collateral support
• Add flash loan protection
• Enhance oracle system with medianizer
• Implement governance token voting
• Add automated stability fee collection
• Develop liquidation auction mechanism

License

This project is licensed under the MIT License - see the LICENSE.md file for details

Acknowledgments

• MakerDAO for pioneering CDP systems
• Stacks blockchain community
• Bitcoin network

Contact

• Project Link: https://github.com/gid-ctl/bitstable.git

Disclaimer

This software is in beta. Use at your own risk. No guarantee of stablecoin value or system security is provided.