iBTC $IBTC

iBTC is a synthetic asset resembling Bitcoin that was unveiled in November 2022 under the umbrella of the Indigo Protocol v1. Belonging to the innovative world of DeFi (Decentralised Finance), iBTC is a product of a Collateralized Debt Position (CDP) based protocol that introduces synthetically efficient assets into the Cardano ecosystem. Much like any other Cardano native asset, iBTC can be acquired via a Decentralised Exchange (DEX), or minted within the Indigo Protocol. The minting process requires users to provide ADA, Cardano's native token, as collateral.

Minting iBTC and the Role of ADA Collateral

When users opt to mint iBTC via the Indigo Protocol, ADA must be deposited as collateral. This ensures a CDP is maintained above the Minimum Collateralization Ratio (MCR). The MCR is the minimum amount of collateral that must be held to back the value of the minted iBTC. If the value of the ADA collateral decreases close to the MCR, the user can choose to deposit more ADA to maintain their iBTC position above the MCR. In scenarios where the user's collateral value falls below the MCR of their iBTC debt, the Indigo Stability Pool steps in to protect the over-collateralization of iBTC and the solvency of the Indigo Protocol. The Stability Pool providers permit the user to retain their iBTC, while high value ADA collateral is exchanged, ensuring an effective liquidation process.

Perks of iBTC – ADA Staking Rewards and Parameter Control

Indigo Protocol offers an exclusive feature for ADA holders. While using ADA as collateral in a CDP, users can still receive their ADA staking rewards from their stake pool delegation. This opens up a new avenue for implementing trading strategies with iBTC. Furthermore, iBTC's parameters are controlled by the Indigo DAO (Decentralised Autonomous Organization), providing the DAO with the power to vote on modifications to the Minimum Collateralization Ratio of iBTC and all other Indigo iAssets.