Peg Stability Mechanism

USDb achieves relative anchoring stability through automated and programmatic Delta-neutral hedging of the underlying support assets. This means hedging the price movement risks of the same scale of support assets, thereby minimizing the volatility of the assets. Because changes in the value of the collateral assets are typically offset by changes in the hedging value, this keeps the synthetic dollar value of the collateral relatively stable under most market conditions. This automated and programmatic hedging mechanism ensures the stability of USDb, providing users with a reliable form of currency, which helps enhance its acceptability and usability in the cryptocurrency market.

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Example:

Whitelisted users can provide approximately $100 worth of staked BTC and automatically receive about 100 newly minted USDb in return, minus the Gas and cost fees for executing the hedge.

During the minting and redemption process, slippage fees and execution costs are already included in the price. Bitena does not profit from the minting or redemption of USDb.

The Bitena protocol allows for the opening of corresponding short perpetual positions on derivatives exchanges with approximately the same nominal dollar value. The supporting assets are directly transferred to an "over-the-counter (OTC) settlement" solution, still on-chain, and are custodied by the OTC service provider to minimize counterparty risk.

Bitena delegates the supporting assets to derivatives exchanges but never transfers custody to the exchanges, ensuring margin for the short perpetual hedge positions.

Revenue Sources:

1.Staked BTC assets earn consensus and execution layer rewards.

2.Funding and basis from Delta hedged derivative positions.

3.Returns from options arbitrage spreads.