👋 Introduction to Uncap
Uncap serves as the liquidity engine for Bitcoin DeFi, functioning as essential infrastructure that powers the emerging economy built around productive Bitcoin utilization.
What is Uncap?
In its current iteration (Uncap v1), Uncap operates as a Bitcoin-centric borrowing protocol enabling users to deposit BTC as collateral and mint USDU, an over-collateralized USD-pegged stablecoin. The protocol delivers two core capabilities:
- 🏦 Borrow USDU: Mint stablecoins against your Bitcoin collateral
- 📈 Earn yield: Generate returns by depositing USDU into the Stability Pool
Why use Uncap?
Uncap is designed with security, transparency, and sustainability at its core. Here's what sets it apart:
- 🔒 No co-mingling: You borrow USDU against your own collateral - your Bitcoin remains exclusively yours
- 🛡️ No rehypothecation: Your BTC stays under your control, never lent out or used elsewhere
- ⚖️ Overcollateralized: Every 1 USDU can always be redeemed for $1+ worth of BTC, ensuring robust backing
- 💰 Real yield: Stability Pool yields are generated by actual borrowers paying interest, not unsustainable mechanisms
- 🔍 100% on-chain: Every transaction is visible and every flow is verifiable - complete transparency
You can independently verify Uncap's reserves at any time:
Protocol architecture
Uncap builds upon Liquity v2's foundation, completely rewritten in Cairo and optimized for Starknet's architecture.
Starknet being non-EVM, Uncap is not part of Liquity's Friendly Fork Program.
We recognize and appreciate the foundational work of the Liquity team and community, whose innovations made Uncap's development possible. Learn more in the Liquity documentation.
Future development
Details about Uncap v2 will be revealed soon. Think ve(3,3).
🎯 Ready to get started? Explore our documentation to learn how to participate in the Uncap ecosystem and make your Bitcoin work for you.