Capital Flow & Minting/Redemption Lifecycle
For whitelisted LPs only.
Stroom facilitates the tokenization of interest-bearing Bitcoin (BTC) on Ethereum through the minting of strBTC. The process begins with the deployment of Lightning Network infrastructure and access control middleware for LN Channels Curator. Once Liquidity Providers (LPs) deposit BTC, Stroom with Custodian validates the transaction and authorizes the minting of strBTC on Ethereum. LPs may optionally engage in DeFi strategies to enhance yield. Upon withdrawal, strBTC is burned, and the underlying BTC is released by a custodian, which is enforcing the escrow agreement.
1. Infrastructure Setup (Pre-Processing Stage)
Lightning Node Deployment: A secure Lightning Network Daemon (LND) node is provisioned by a BTC custodian.
Access Middleware Initialization: Channel Curator is granted permissioned access through a hosted Macaroon Middleware Manager, enabling secure interaction with the custodian's node.
2. BTC Deposit & strBTC Minting
Deposit Detection: When BTC is deposited into the custodian’s Lightning node, Stroom and Custodian detect the transaction.
Minting Authorization: Upon confirmation, Stroom issues a cryptographically signed minting message used to mint
strBTCin the smart contract.strBTCMinting: LPs interact with the Ethereum smart contract to mintstrBTCusing the signed message.
3. Yield Optimization (Optional)
DeFi Strategy Participation: LPs may allocate their strBTC into supported DeFi protocols such as DEX liquidity pools, lending and restaking platforms, or vaults to earn additional yield with different risk profiles.
4. Withdrawal Process
strBTCBurn: To initiate a withdrawal, LPs burn theirstrBTCon Ethereum via the smart contract.BTC Release: After the burn is validated, the equivalent BTC is released back to the LP from the custodian via the Lightning Network.
5. Incentive Mechanisms
Stroom Points: LPs earn points based on the BTC liquidity provided and their participation in DeFi strategies involving
strBTC.
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