Hello ICP community!
I’m excited to share Bastion Protocol, a new approach to Bitcoin DeFi that leverages ICP’s unique native Bitcoin integration capabilities.
What is Bastion Protocol?
Bastion enables users to form “circles” - trusted groups that pool native Bitcoin for collective lending, borrowing, and staking. Think of it as decentralized credit unions for Bitcoin, where social trust enhances financial opportunities.
Key Features:
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Native Bitcoin Operations: Uses ICP’s Bitcoin integration - no wrapped tokens or bridge risks
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Circle-Based Finance: Groups make collective decisions on lending/borrowing strategies
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Reputation System: Better rates through collective trust and payment history
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Yield Optimization: Access to staking opportunities with lower individual minimums
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On-Chain Governance: Democratic decision-making within each circle
Why ICP?
ICP’s unique capabilities make this concept possible:
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Real Bitcoin custody without bridges or synthetic tokens
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Chain Fusion for seamless multi-chain operations
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Reverse gas model enabling cost-effective micro-strategies
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Internet Identity for secure authentication
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On-chain web hosting for complete decentralization
User Story:
Sarah has 0.5 BTC but can’t access protocols requiring 1+ BTC minimums. She joins a circle with friends, pooling 8 BTC total. The circle votes to stake 6 BTC in Lightning Network liquidity and lend 2 BTC to another reputable circle at 8% APR. Sarah earns proportional yields on both strategies. When she needs a loan, her circle’s reputation enables 5% borrowing rates instead of market rates of 12%.
Technical Architecture:
Core canisters:
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CircleFactory: Creates and manages circles -
BitcoinTreasury: Native Bitcoin custody operations -
LendingPool: Reputation-based lending between circles -
StakingVault: External protocol integrations -
GovernanceCanister: Voting and proposal management
Current Status:
I’m currently applying for a DFINITY Developer Grant to build this protocol. The development plan includes:
Milestone 1: Core infrastructure and Bitcoin integration Milestone 2: Lending/borrowing functionality with yield distribution
Milestone 3: Complete dApp with governance token and cross-circle features
Looking for Feedback:
I’d love to hear the community’s thoughts on:
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Technical approach and architecture suggestions
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Potential integration opportunities with existing ICP protocols
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Security considerations for circle-based trust mechanisms
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Interest in beta testing or collaboration
Background:
I’m a blockchain developer with experience in DeFi protocols, previously awarded a Polkadot Fast Grant for PowerGrid Network. You can check out my work at GitHub and portfolio.
What do you think? Does this approach to Bitcoin DeFi resonate with the ICP community’s vision of a decentralized internet?