Money Protocol Overview

Introduction

Money Protocol is a decentralized system that allows anyone to monetize or borrow against their Bitcoin without paying an annual interest rate. When locking up BTC as collateral in Money Protocol and creating a Vault, the user can get instant liquidity by minting BPD. Bitcoin Protocol Dollar or BPD is a decentralized, collateral-backed stablecoin target pegged to the US Dollar. Each Vault is required to be collateralized at a minimum of 110%. Holders of BPD can redeem their stablecoin for the underlying BTC collateral at any time.

Bitcoin is a form of base money and Money Protocol unlocks Bitcoin as a foundation for a broad money supply.

Why do we need Money Protocol?

Bitcoin has demonstrated remarkable growth and value capture and as a result, many individuals hold Bitcoin as a store of value. However, to maintain one’s Bitcoin as a store of value while putting it to use and borrowing against it typically involves centralized entities. These centralized entities come with inherent custody risks, including but not limited to regulatory risks, employee risks, market mismanagement risks, operational risks, political risks, etc. These risks are assumed by the borrower before having to pay the high borrow interest rates to the centralized entity.

Money Protocol addresses these inherent centralization risks as it operates as a set of smart contracts on the RSK blockchain to execute the collateralization, lending, borrowing, and minting functions - no intermediary.

This decentralized and distributed design minimizes or avoids the risks associated with centralized parties while providing a way for anyone, anywhere to unlock the value of their Bitcoin by minting a dollar-pegged token, BPD. Further enabling anyone to use their Bitcoin without having to sell it all the while achieving this with the best rate possible, 0%.