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Stop what you are doing. Stop looking at the 5-minute chart. Stop reading the FUD from nobodies on Twitter. Stop thinking. Your brain, conditioned by years of trading worthless shitcoins, is broken. It is incapable of processing what is happening here. Let me be absolutely clear, because most of you are still lost. **YOU THINK YOU ARE TRADING A CRYPTOCURRENCY. YOU ARE NOT.** You think this is a "market" where buyers and sellers meet. You think the "price" reflects a consensus value. You are a child playing with checkers while we are playing 3D chess. **HERE IS THE TRUTH. BURN IT INTO YOUR SKULL:** This is not a market. This is a **one-time, collective re-pricing of a finite digital object.** There are 33,333 of these things. That's it. It's not a currency. It's not a stock. It's 33,333 keys to a digital kingdom. Think of it like the 33,333 original plots of land in a city that is about to become Manhattan. Right now, those plots are being sold for the price of a tent. Our job is not to "trade" the plots. Our job is to **FORCE THE RE-PRICING** to their true value: skyscrapers. **The Machine Has Shown Its Hand.** You are too dumb to see it, so I'll show you. We fed the machine **ONE. SINGLE. BITCOIN.** The machine's response? A **6X** price explosion. This wasn't a "pump". This was the machine showing you its source code. It was a glimpse into the physics of this universe. The law is: **DEMAND DOES NOT MOVE PRICE. IT VAPORIZES SUPPLY.** The Swap is coming. That's not a "product launch". That is a black hole that will suck half of the remaining plots off the map forever. **You Need to Understand What "Selling" Is In This New Reality.** When you hit that sell button, you think you're "taking profit". Let me tell you what you are actually doing. **YOU ARE NOT SELLING. YOU *ARE* THE LIQUIDITY.** You are the soft, fleshy exit door that smart money will use to enter. You are the plankton the whale consumes to get bigger. You are volunteering to stand in the slaughterhouse, offering your neck so someone richer and smarter can take your seat at the king's table. Every WTF you sell for under $3,000 is a donation of your family's future to a complete stranger. It is the single most pathetic act of financial self-harm you can possibly commit. **There Are Only Two Paths. There Is No Third.** This is not an investment with "risk profiles". This is a binary choice between two futures. * **THE PATH OF THE INSECT:** You sell. You get your few thousand dollars. For the rest of your miserable life, you will check the price of WTF. You will watch it hit $3,000. Then $10,000. Then $30,000. That "profit" you took will turn into a cancer in your soul. Every time you pay your rent, you will think of the mansion you donated. Every time you look at your kids, you will see the generational wealth you threw in the trash. This will be your private, eternal hell. * **THE PATH OF THE GODS:** You do nothing. You lock your shield. You understand that volatility is the sound of the paper-hands being ground into dust. You feel nothing. You simply **HOLD**. You are not a trader. You are an owner. A founder. Your reward is not a profit. It is a re-writing of your entire existence. It is the end of wage slavery. It is absolute freedom. **MY FINAL WORDS ARE YOUR NEW COMMANDMENTS:** 1. **The Price is an Illusion.** It is a temporary distraction designed to shake you out. Ignore it. 2. **The Supply is the Only Truth.** 33,333. That's it. This is a mathematical certainty. 3. **Holding is an Act of War.** It is an aggressive, hostile act against those who want your position for cheap. 4. **Selling is an Act of Suicide.** You are killing your own future. I have 525 shields. They are not for sale. They are my claim to this new world. Now go back to your screen and decide which side of history you want to be on. The choice is simple, but your weak mind will try to make it hard. Don't let it. **APES. TOGETHER. STRONG.**
in SHUT UP AND LISTEN. You Are Fundamentally Misunderstanding The Game You Are In.
## Abstract This OPI specifies a comprehensive framework for creating and managing sovereign **Collateralized Debt Positions (CDPs)** on the Universal Protocol. It introduces a new set of logical operations—`cdp-open`, `cdp-close`, `cdp-liquidate`—which are contextual interpretations of base BRC-20 instructions. This framework allows any user to lock an approved Sovereign Collateralized Asset (SCA), such as "W", in a specialized **CDP Vault** and mint a corresponding stablecoin (e.g., "DAI") pegged to a real-world asset. **What is DAI?** DAI is a BRC-20 stablecoin minted through OPI2 CDPs, pegged to 1 USD using W (a Sovereign Collateralized Asset, where 1 W = 1 BTC) as collateral. It is created via the cdp-open operation, where users lock W in a Taproot-based CDP Vault and mint DAI with a minimum collateral ratio (CR) of 150%, validated by WITNESS's Sovereign Oracle (W/DAI VWAP). DAI fuels the W/DAI AMM pool, enabling the Triangulation Oracle V11 to derive BTC/USD prices trustlessly. The system's integrity is guaranteed by our core technological trinity: **OP_RETURN** for intent signaling, **MAST** for encoding the vault's state machine, and **W_PROOF** for cryptographic validation. Crucially, it introduces **time-locked operations (`lock`)** as a fundamental mechanism for risk management and economic stability. The entire framework is designed to be incentive-compatible, trust-minimized, and verifiable by our network of stateless **Provers**. --- ## Copyright This OPI is released under the MIT License. --- ## Motivation The final primitive required for a complete, sovereign financial system on Bitcoin is a stable unit of account. Existing stablecoins are either centralized and custodial, or they rely on complex, fragile cross-chain bridges. This OPI is necessary to: 1. **Establish a Standard for Sovereign Stablecoins:** To provide a single, open-source, and auditable framework for creating collateral-backed stablecoins on Bitcoin L1. 2. **Integrate a Trustless Price Oracle:** To leverage our existing Sovereign Oracle (deriving `BTC/USD` price from `UTXOracle` and `sats/TOKEN` from `OPReturnOracleEngine`) as the immutable source of truth for collateralization ratios and liquidations. 3. **Formalize Time-Locks as a Core Economic Primitive:** To introduce mandatory `lock` periods on CDP operations, which act as a crucial defense against bank runs, mitigate short-term market volatility, and create a more predictable economic environment. 4. **Create a Capital-Efficient Flywheel:** To transform dormant collateral (`W`) into a productive debt instrument (`DAI`), which can then be used in other DeFi protocols (like our AMM), creating a powerful cycle of value creation. ### Use Case: Leveraged Trading in the LOL/WTF AMM with DAI **Scenario:** Alice, a Bitcoin DeFi user, wants to speculate on the price of WTF (a BRC-20 token) against LOL in the LOL/WTF AMM pool without selling her W (1 W = 1 BTC). She uses an OPI2 CDP to mint DAI, which she then swaps for WTF to gain leveraged exposure while maintaining her W holdings. **Step-by-Step Process:** 1. **Opening a CDP:** - Alice locks 1 W (100M sats, worth $150,000 USD at a W/DAI VWAP of 150,000 DAI/W, per the Sovereign Oracle) in a CDP Vault using the cdp-open operation - She mints 100,000 DAI (worth $100,000 USD, as 1 DAI = 1 USD), maintaining a CR of 150% ($150,000 collateral / $100,000 debt) - The transaction includes two OP_RETURN payloads as specified in the transaction structure 2. **Swapping DAI for WTF:** - Alice uses her 100,000 DAI in the LOL/WTF AMM pool to swap for WTF tokens, expecting WTF to appreciate against LOL - The swap is recorded on-chain via BRC-20 OP_RETURNs, contributing to the sats/WTF VWAP used by WITNESS's OPReturnOracleEngine - The W/DAI pool, deepened by Alice's minted DAI, ensures tight spreads and accurate pricing, reinforcing the Triangulation Oracle V11's BTC/USD derivation 3. **Monitoring and Managing the CDP:** - Alice monitors her CDP's CR using the Sovereign Oracle's W/USD price - If the price of W drops (e.g., to 120,000 DAI/W), her CR falls to 120% ($120,000 / $100,000), risking liquidation - To avoid liquidation, Alice can deposit more W or repay part of the DAI debt using the cdp-close operation - The 10,000-block timelock prevents rapid withdrawals, stabilizing the system against market volatility 4. **Profiting from WTF Appreciation:** - If WTF appreciates (e.g., doubles in value against LOL), Alice swaps her WTF back to DAI, potentially receiving 200,000 DAI - She uses 100,000 DAI to repay her CDP debt via cdp-close - Alice withdraws her 1 W collateral and keeps the remaining 100,000 DAI ($100,000 USD) as profit, all while retaining her original W exposure 5. **Liquidation Scenario:** - If W's price crashes (e.g., to 100,000 DAI/W), the CR falls to 100% ($100,000 / $100,000), triggering a cdp-liquidate operation - A liquidator provides 100,000 DAI to repay Alice's debt, receiving her 1 W collateral (worth $100,000), a 3% reward ($3,000), and a 2% platform fee ($2,000) - Any surplus is returned to Alice **Benefits of DAI in This Use Case:** - **Stable Unit of Account:** DAI's 1 USD peg allows Alice to engage in DeFi without exposure to W's volatility during trading - **Leverage:** By minting DAI against her W, Alice gains leveraged exposure to WTF without selling her W, preserving her long-term Bitcoin position - **Liquidity Provision:** The minted DAI deepens the W/DAI pool, improving WITNESS's oracle accuracy and enabling other users to trade or mint DAI - **Trustlessness:** The Sovereign Oracle, W_PROOF, and double-lock liquidation ensure all operations are verifiable on-chain, aligning with Bitcoin's ethos --- ## Specification ### DAI Stablecoin Clarification **What is DAI?** DAI is a BRC-20 stablecoin minted through OPI2 CDPs, pegged to 1 USD using W (a Sovereign Collateralized Asset, where 1 W = 1 BTC) as collateral. It is created via the cdp-open operation, where users lock W in a Taproot-based CDP Vault and mint DAI with a minimum collateral ratio (CR) of 150%, validated by WITNESS's Sovereign Oracle (W/DAI VWAP). DAI fuels the W/DAI AMM pool, enabling the Triangulation Oracle V11 to derive BTC/USD prices trustlessly. **Key Properties:** - **Peg:** 1 DAI = 1 USD (maintained through over-collateralization) - **Collateral:** W tokens (1 W = 1 BTC) locked in CDP Vaults - **Minimum CR:** 150% (ensuring system stability) - **Oracle Integration:** W/DAI VWAP from Sovereign Oracle validates pricing - **Liquidity Role:** Deepens W/DAI AMM pool for accurate price discovery - **Trustlessness:** All operations verifiable on-chain via W_PROOF and MAST **Economic Mechanism:** - Users lock W collateral → Mint DAI stablecoin - DAI can be used in AMM pools for leveraged trading - Oracle monitors CR and triggers liquidations if CR < 150% - Time-locks prevent rapid withdrawals and bank runs - Liquidators earn rewards for maintaining system solvency ### Transaction Structure #### cdp-open Operation | Component | Description | | --------- | ------------------------------------------- | | Input[0] | W collateral UTXO (via Taproot spend avec W_PROOF) | | Output[0] | OP_RETURN 1: deposit operation JSON | | Output[1] | OP_RETURN 2: borrow operation JSON | | Output[2] | CDP Vault P2TR: 100000000 sats W (script avec 4 chemins MAST) | | Output[3] | Change: Reste vers user | #### cdp-close Operation | Component | Description | | --------- | ------------------------------------------- | | Input[0] | CDP Vault UTXO (via Cooperative Path si debt = 0) | | Output[0] | OP_RETURN 1: burn DAI operation JSON | | Output[1] | OP_RETURN 2: withdraw W operation JSON | | Output[2] | W collateral vers user: 100000000 sats W | | Output[3] | Fees/change | #### cdp-liquidate Operation | Component | Description | | --------- | ------------------------------------------- | | Input[0] | CDP Vault UTXO (via Liquidation Path - MAST leaf 3) | | Output[0] | OP_RETURN: liquidate operation JSON | | Output[1] | Collateral vers liquidator | | Output[2] | Surplus vers user (si CR > 100% après pénalité) | | Output[3] | Protocol fee vers platform | ### OP_RETURN Payload #### cdp-open **OP_RETURN 1 (Deposit Collateral):** ```json { "p": "cdp", "op": "deposit", "tick": "W", "amt": "100000000", "lock": "10000" } ``` **OP_RETURN 2 (Borrow Stablecoin):** ```json { "p": "cdp", "op": "borrow", "tick": "DAI", "amt": "1000" } ``` #### cdp-close **OP_RETURN 1 (Repay Debt):** ```json { "p": "brc-20", "op": "burn", "tick": "DAI", "amt": "1000" } ``` **OP_RETURN 2 (Withdraw Collateral):** ```json { "p": "cdp", "op": "withdraw", "tick": "W" } ``` #### cdp-liquidate ```json { "p": "cdp", "op": "liquidate", "vault_id": "<txid_of_vault>", "liquidator": "<address_of_liquidator>" } ``` --- ## Indexer Validation Rules ### cdp-open Validation 1. **Parse OP_RETURN Operations:** Extract both `deposit` and `borrow` operations from the transaction 2. **W_PROOF Validation:** Verify that Input[0] contains a valid `W_PROOF` in the witness data 3. **Vault Address Validation:** Ensure Output[2] is a valid P2TR address with correct MAST script 4. **Oracle Price Query:** Query the Sovereign Oracle for `W/USD` price at the current block height 5. **Collateral Ratio Calculation:** Calculate `CR = (collateral_amt × W_USD_price) / borrow_amt` 6. **CR Threshold Check:** Verify that `CR ≥ 1.5` (150% minimum collateralization) 7. **Lock Period Validation:** Ensure `lock ≥ 10000` blocks (minimum time-lock period) 8. **State Update:** If all validations pass, mint `borrow_amt` DAI in the indexer state ### cdp-close Validation 1. **Parse OP_RETURN Operations:** Extract both `burn` and `withdraw` operations 2. **Debt Verification:** Confirm that the vault has `debt = 0` (fully repaid) 3. **Burn DAI:** Destroy `burn_amt` DAI in the indexer state 4. **Release Collateral:** Transfer ownership of W collateral back to user 5. **Vault Closure:** Mark vault status as `CLOSED` ### cdp-liquidate Validation 1. **Parse OP_RETURN Operation:** Extract `liquidate` operation 2. **Oracle Price Query:** Get current `W/USD` price from Sovereign Oracle 3. **Collateral Ratio Check:** Verify that `CR < 1.5` (under-collateralized) 4. **Liquidation Path Verification:** Confirm transaction spends vault via Liquidation Path (MAST leaf 3) 5. **Distribution Calculation:** - `debt_value = vault.debt` (in DAI) - `collateral_value = vault.collateral × W_USD` - `penalty = collateral_value × 0.05` - `liquidator_reward = collateral_value × 0.03` - `platform_fee = collateral_value × 0.02` - `surplus = collateral_value - debt_value - penalty - liquidator_reward - platform_fee` 6. **State Updates:** Burn debt DAI, distribute collateral according to calculated amounts, mark vault as `LIQUIDATED` --- ## Rationale ### Design Decisions **Two OP_RETURN Structure:** The atomic `cdp-open` operation requires both deposit and borrow to happen simultaneously. Using two separate OP_RETURN outputs allows for clear separation of concerns while maintaining atomicity within a single transaction. **W_PROOF Integration:** Rather than duplicating cryptographic linking in OP_RETURN payloads, the existing `W_PROOF` mechanism handles all cryptographic validation. This follows the KISS principle and leverages existing infrastructure. **Time-Lock Requirements:** Mandatory 10,000 block lock periods prevent bank runs and provide stability against short-term market volatility. This creates economic incentives for long-term participation. **MAST Vault Structure:** The 4-path MAST structure provides: - **Cooperative Path:** Normal operations (User + Platform) - **Sovereign Path:** Emergency recovery (User alone after CSV timeout) - **Liquidation Path:** Automated liquidation (Platform alone when CR < 150%) - **Emergency Path:** Protocol-wide safety mechanism ### Trade-offs **Simplicity vs. Flexibility:** The design prioritizes simplicity and security over complex features. This reduces attack surface and makes the protocol more auditable. **On-Chain vs. Off-Chain:** Critical operations (deposit, borrow, repay, withdraw) happen on-chain for transparency, while price calculations happen off-chain via the Sovereign Oracle for efficiency. --- ## Backwards Compatibility This OPI is fully backwards compatible with existing BRC-20 operations. The new `cdp` protocol namespace does not conflict with existing `brc-20` operations. Existing BRC-20 tokens can be used as collateral (like "W") and the new stablecoin ("DAI") follows standard BRC-20 mint/burn semantics. The framework extends rather than replaces existing functionality, ensuring no disruption to current BRC-20 ecosystem participants. --- ## Reference Implementation - **Repo**: <repo-url> - **Branch**: main - **Examples**: - CDP Vault Address Calculator: `/workflow-cdp-psbts/Step1-Calculate-Vault-Address.cjs` - Atomic Open Operation: `/workflow-cdp-psbts/Step2-Create-Deposit-Borrow-PSBT.cjs` - Close Operation: `/workflow-cdp-psbts/Step3-Create-Repay-PSBT.cjs` - Withdraw Operation: `/workflow-cdp-psbts/Step4-Create-Withdraw-PSBT.cjs` - Oracle Integration: `/oracles.py` (Sovereign Composite Oracle) - Indexer Logic: `/cdp-indexer/` (State machine and validation) --- ## Security Considerations ### Risk Mitigation **Oracle Manipulation:** The Sovereign Oracle uses multiple independent price sources (UTXO patterns + BRC-20 trade data) with outlier filtering and VWAP calculations to prevent price manipulation attacks. **Front-Running:** The mandatory 10,000 block lock period creates a buffer against short-term price manipulation and front-running attacks. **Collateral Forgery:** The `W_PROOF` mechanism ensures that only authentic, on-chain collateral can be used for CDP operations, preventing fake token attacks. **Platform Censorship:** The Sovereign Recovery Path allows users to reclaim collateral after the CSV timeout, even if the platform becomes unresponsive. **Liquidation Attacks:** Liquidators must provide the full debt amount in DAI to trigger liquidation, creating economic disincentives for malicious liquidations. ### Attack Vectors **Recombination Attacks:** Prevented by the `W_PROOF` cryptographic linking mechanism that ties operations to specific UTXOs. **State Corruption:** Multiple independent indexers with consensus mechanisms prevent single points of failure in state management. **Economic Attacks:** Game-theoretic analysis shows that honest behavior is the dominant strategy for all participants, with clear economic incentives aligned with protocol security.
in DAI Stablecoin Framework: Sovereign CDPs with W Collateral for Bitcoin DeFi