Every BTC-backed stablecoin so far has had the same weak point, and it isnt the peg. Its whatever custodian holds the bitcoin underneath.
Trustless Bitcoin Vaults (TBV) describe a different arrangement. Issuers reference vaults as collateral, set their own collateralisation ratios, run their own liquidation logic. The BTC stays locked on bitcoin the whole time. $SNDK
The part I keep coming back to is what that does across issuers. Multiple CDP designs can be backed by bitcoin at once, USD pegged,multi currency , synthetic,with no shared balance sheet and no protocol level exclusivity.
Compare that to now, where competing stablecoins quietly rest on the same handful of wrapped BTC issuers. Different logos, one failure point underneath.
I had to check I was reading that right, becuse Id assumed collateral sharing always meant risk sharing.
Segregated collateral means a rival issuer blOwing up isnt your depositors problem. $BLESS
Would you rather back your stablecoin with a custodians IOU, or a script the depositor co-signed?
#baby @BabylonLabs_io $BABY