How It Works

Optimex Borrows facilitates the issuance of Bitcoin (BTC)-backed loans. In this process, borrowers are required to secure their BTC as collateral within a Native Bitcoin Vault to acquire stablecoins, specifically USDC on the Ethereum network. The underlying architecture of Optimex Borrows supports seamless integration with established lending protocols (e.g., Morpho, Euler), thereby accessing their pre-existing stablecoin liquidity reserves.

Given that the collateral is BTC secured within a Native Bitcoin Vault and the loan assets are stablecoins on the Ethereum network, any necessary liquidation must be executed cross-chain. To facilitate this process, Optimex Borrows utilizes Optimex Swap for the liquidation of the BTC collateral when required. Consequently, Optimex Borrows employs the fundamental components described previously: the Native Bitcoin Vault, the Decentralized Settlement Committee, the Communication Layer, and the Market Makers.

The initial implementation of Optimex Borrows is focused on integration with the Morpho protocol. For expository purposes, the subsequent subsections will provide a detailed explanation of the operational mechanism of Optimex Borrows based on this current integration. Furthermore, the expansion of this functionality to encompass other curator-based lending protocols on the Ethereum network, other EVM-compatible chains, or Solana is considered a straightforward extension and constitutes our dedicated future work.