Circulation Control
Last updated
Last updated
Hot Reserve, Cold Reserve, and Custodian:
Explore the nuanced management of the 1:1 peg through a flexible Hot / Cold reserve setup. zBTC's supply is fully backed by a 1:1 Bitcoin reserve, safeguarded by ZeusNode, ensuring the circulating supply remains secure.
The Hot Reserve, controlled by a CheckLockTimeVerify (CLTV) mechanism, enables depositors to withdraw funds after a set lock time, offering flexibility in managing long-term reserves.
Conversely, the Cold Reserve, managed solely by verifiers, remains locked for an extended period.
CLTV implementation serves dual purposes of efficiency and security, acting as a buffer for APOLLO to adjust or rebalance zBTC circulation. Withdrawals from the Hot Reserve are initiated by applicants, facilitating liquidity retrieval.
Liquidity providers in the Cold Reserve receive rewards, while those in the Hot Reserve do not.
