Introduction
Welcome to bitBOMB! If this is your first time here, please take some time to read through this documentation before you begin using the protocol. This documentation is intended to take you through the entire process of how to get started using bitBOMB to earn stable, high yields that are only possible through the power of DeFi, but with the stability and security of exposure to tokens pegged to Bitcoin, DOT, ADA and ATOM! Let's get at it!
Origins
bitBOMB is based upon the work of an accumulation of TOMB finance forks over the last few months. The project is run and lead by the doxxed team at BOMB Money, lead by CEO Aaron Shames! We have taken the best parts from all of the best forks and combined them into one polished, final product! As far as networks go, Binance Smart Chain (BSC) seemed like the perfect choice again with its fast transaction speeds, low gas fees, and large user base. Plus, it's the home of BOMB! This project would certainly not be possible without the work of the tomb.finance team. Their project being fully open source and developed exceptionally well made it a pleasure to work with, and we would not be here today without their efforts, so we want to give a special thank you to them, and other protocols, for that.
What are the bitBOMB protocol tokens?
bitBOMB multi-token protocol currently consists of the following four tokens, and each plays a critical role in how the protocol works to maintain peg:
bitBTC Tokens ($bitBTC) - The bitBTC token is algorithmically pegged to BTC at a ratio of 10,000:1. This means that if BTC was $50,000, bitBTC would be worth $5.
bitDOT Tokens ($bitDOT) - The bitDOT token is algorithmically pegged to DOT at a ratio of 1:1. This means that if DOT was $15, bitDOT would also be $15.
bitADA Tokens ($bitADA) - The bitADA token is algorithmically pegged to ADA at a ratio of 1:1. This means that if ADA was $5, bitADA would also be $5.
bitATOM Tokens ($bitATOM) - The bitATOM token is algorithmically pegged to ATOM at a ratio of 1:1. This means that if ATOM was $20, bitATOM would also be $20.
bitBTCbond/bitDOTbond/bitADAbond/bitATOMbond - The Bond version of all the main tokens, these are used to help incentivize main token buys during contraction periods (below 1.00 peg).
How does it work?
The bitBOMB protocol works through a synergistic design of unique tokens and mechanisms that create an automatic, self-reinforcing system to help maintain the pegs of all the main pairs. Each of these tokens and mechanisms will be explained in further detail within this documentation, but for now let's have a look at a brief overview of how it all works, we will use bitBTC as an example but this applies to bitDOT, bitADA and bitATOM as well!
When bitBTC price is over the peg 1.001, new bitBTC are minted by the protocol to inflate the supply in an attempt to drive the price down towards the peg. These new bitBTC are allocated to bitSHARE holders in the bitBTC Boardroom, as a reward for their investment and trust in the protocol. This, in turn, increases the demand for and the value of bitSHARES.
When bitBTC price is at the peg between 1.00 and 1.00099.., no new bitBTC will be minted, keeping the supply fixed during this time. Since there will be no new supply coming in, the peg will be maintained indefinitely at this point unless there is a shift in demand. More buying pressure during this time will push the price back up above the bitBTC minting threshold. Conversely, more selling pressure will push the price below the peg.
When bitBTC price drops below the peg 1.00, the protocol will begin to mint bitBTC-BONDs (up to a maximum debt limit). Experienced investors will have the ability to exchange their bitBTC for these bitBTC-BONDs, which they can then redeem for bitBTC at a premium above 1.05 peg in the future. This removes bitBTC from the total supply, applying upward pressure on the price towards the peg. Besides this, investors who believe in the protocol's ability to maintain peg can just buy bitBTC to essentially purchase BOMB (Bitcoin) at a discount to the market. Both of these incentives are intended to create upward pressure on bitBTC's price when under the peg so that the peg can be regained over time.
There are so many different ways you can utilize the mechanisms of the bitBOMB protocol to earn yield. Pick a strategy that is right for you, based upon your own knowledge and experience. Even the most simple and basic of strategies can earn great returns, but feel free to experiment with more complex strategies as you learn how the protocol works!
What exactly is the peg?
bitBTC (as well as bitDOT, bitADA and bitATOM) is a token that is intended to track the price of BTC algorithmically. The ratio for this peg is set at 1:1. bitBTC actively tracks this peg via an algorithm, but that does not mean it will be valued at 1:1 at all times as it is not collateralized. bitBTC is not to be confused for a crypto or fiat-backed stablecoin.
The entire design of the bitBOMB protocol is intended to try and maintain this peg as closely as possible, but as it is an algorithmic peg, this will never be a completely stable process. In fact, some of the unique profit-generating opportunities offered by the protocol actually only exist because of these price fluctuations.
To put it simply, there will almost certainly be times when the price of bitBTC is below peg. This is a natural part of the process, and opens up opportunities for active investors/traders to "buy the dip" and help support the protocol by regaining peg, while also profiting from the discounted price.
When the protocol is healthy and stable, the price of bitBTC (as well as bitDOT, bitADA and bitATOM) will likely look similar to above, with price fluctuating above and below peg as the mechanisms of the protocol work to influence supply and demand and maintain an average price around the peg.
Keep this in mind when developing your strategies and when taking a more active role in the protocol.
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