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cBTC: A Bitcoin-Backed “Stable Value” Concept — Looking for Feedback
33 sats \ 3 comments \ @anon 25 Nov bitcoin
Hey stackers,
I’ve been working on a small design idea called cBTC and wanted to put it here to get feedback from the Bitcoin crowd that actually thinks deeply about incentives, collateral, and failure modes.
TL;DR
A Bitcoin-backed unit of account minted at 30% LTV, fully backed by on-chain BTC, redeemable for BTC at spot, and designed to offer stable value without USD pegs, centralized issuers, or algo-stable mechanics.
Basic idea
  • LPs deposit BTC
  • Protocol mints up to 0.3 cBTC per 1 BTC
  • cBTC circulates as the lower-volatility asset
  • Users redeem cBTC for BTC using the spot BTC/USD rate (kills arbitrage)
  • Vault remains 100% BTC-backed and auditable
  • LP yield comes from swap/liquidity flow — no lending, no leverage, no external counterparty risk
Why explore this?
There’s demand for stable value inside the Bitcoin ecosystem without relying on USDT/USDC, custodians, or off-chain backing. cBTC tries to answer: Can we get stable value + Bitcoin trust assumptions at the same time?
What I’d love feedback on
Honest critique is welcome. Especially:
  • whether 30% LTV is actually safe for BTC volatility
  • possible redemption-based arbitrage vectors
  • unexpected game-theoretic risks
  • how this fits (or doesn’t) with Lightning/Taproot asset models
Whitepaper
Full discussion draft: https://github.com/jamestector-coder/cBTC/blob/main/v.3.%20cBTC%20Whitepaper%2002%20Nov.%202025%20(FAQ%20included).pdf
This isn’t a token sale or anything financial — just a concept draft I’d like to stress-test. Happy to hear your thoughts, especially the critical ones.
Thanks stackers ⚡
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0 sats \ 0 replies \ @DarthCoin 17h
SCAMMERS WILL ALWAYS COME UP WITH NEW SCAMS
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0 sats \ 1 reply \ @k00b 25 Nov
You say it's not another stablecoin but it is in fact a stablecoin, right? Else, what is it stable relative to if not a fiat currency like USD?
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0 sats \ 0 replies \ @anon 20h
You say it's not another stablecoin but it is in fact a stablecoin, right? Else, what is it stable relative to if not a fiat currency like USD?
Great question — and you’re right to challenge the wording.
cBTC is not a stablecoin in the traditional sense because it is not pegged to USD (or to any fiat currency). It doesn’t target a $1 price, it doesn’t use arbitrage bots, and there’s no issuer promising convertibility at a fixed rate.
So what is it “stable” relative to?
cBTC aims for relative stability inside the Bitcoin monetary system, not parity with fiat.
More precisely:
1. cBTC is “stable” relative to Bitcoin’s upside volatility, not USD.
It’s minted at 30% LTV against BTC, so instead of tracking the dollar, it tracks a fraction of BTC’s value. If BTC goes up or down 10%, cBTC moves far less because it represents only 0.3 BTC of exposure.
It's basically a dampened-volatility BTC unit, not a fiat-pegged instrument.
2. It’s not stable against USD inflation — it’s stable away from fiat.
Traditional stablecoins outsource monetary stability to central banks (USD). cBTC tries the opposite: It creates a Bitcoin-native unit of account that does not depend on fiat or external collateral.
You could say it’s “stable against fiat debasement” only because the collateral is Bitcoin — but that’s not the core design goal.
3. The goal is not price stability — it’s functional stability.
The intention is to give Bitcoin users:
  • a less volatile unit for payments,
  • without touching USD,
  • without trusting issuers,
  • without algorithmic peg mechanisms.
In short:
USD-stablecoins peg to the dollar. cBTC aims for a Bitcoin-native low-volatility unit.
So yes — you can call it a stablecoin if your definition is “asset designed to be less volatile,” but it’s not a USD-stablecoin, and it doesn’t behave like one. It’s simply a different species.
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