BitLend: Trustless BTC Lending Protocol on exSat

Project Overview

BitLend is a permissionless lending protocol built on exSat Network that allows Bitcoin holders to collateralize their BTC to borrow stablecoins or XSAT tokens. The platform leverages exSat's UTXO data synchronization and EVM compatibility to create a seamless, trustless lending experience with transparent proof of reserves.

🔑 Key Features

Bridge BTC to XBTC: Seamlessly move assets between Bitcoin and exSat Network
Collateralized Lending: Use your XBTC as collateral to borrow stablecoins
UTXO-Based Proof of Reserves: Verify collateral directly using Bitcoin's UTXO data
Liquidation Protection: MEV-protected liquidations using Rebar Shield
Market Analytics: Real-time Bitcoin analytics powered by Rebar Data

Bitlend Demo Video

bitlend.mp4

🔧 Technical Innovations

UTXO-Based Proof of Reserves

BitLend implements a transparent proof of reserves system using exSat's on-chain UTXO data. This allows users to:

Verify their BTC collateral is backed 1:1 with actual Bitcoin
Track UTXO confirmations for enhanced security
Prove solvency of the lending platform at any time

Our system connects directly to exSat's UTXO Management Contract to access real-time Bitcoin data for verification.

Rebar Data Integration

We leverage Rebar Data for enhanced market insights and security:

MEV Protection: Submit liquidation transactions through Rebar Shield's private mempool
Market Analytics: Display real-time Bitcoin network statistics
Liquidation Risk Monitoring: Alert users when their positions are at risk of liquidation
Mempool Analysis: Optimize transaction fees based on current network conditions

Architecture Diagram

flowchart TB
    %% Define comprehensive styles
    classDef exSatLayer fill:#1e293b,stroke:#64748b,stroke-width:3px,color:#f8fafc
    classDef bitcoinLayer fill:#f97316,stroke:#ea580c,stroke-width:3px,color:#ffffff
    classDef contractLayer fill:#0f172a,stroke:#3b82f6,stroke-width:3px,color:#f8fafc
    classDef frontendLayer fill:#059669,stroke:#047857,stroke-width:3px,color:#ffffff
    classDef bridgeLayer fill:#7c3aed,stroke:#6d28d9,stroke-width:3px,color:#ffffff
    classDef dataLayer fill:#dc2626,stroke:#b91c1c,stroke-width:3px,color:#ffffff
    classDef component fill:#ffffff,stroke:#374151,stroke-width:2px,color:#1f2937
    classDef token fill:#fbbf24,stroke:#f59e0b,stroke-width:2px,color:#1f2937
    classDef interaction fill:#06b6d4,stroke:#0891b2,stroke-width:2px,color:#ffffff
    
    %% Enhanced Layer Structure
    subgraph BitcoinEcosystem["🟠 Bitcoin Ecosystem"]
        direction TB
        BTCNetwork["Bitcoin Network"]
        BTCTx["Bitcoin Transactions"]
        UTXO["Bitcoin UTXO Set"]
        Mempool["Bitcoin Mempool"]
        BTCBlocks["Bitcoin Blocks"]
    end
    
    subgraph ExSatInfrastructure["🔷 exSat Network Infrastructure"]
        direction TB
        
        subgraph DataConsensus["📊 Data Consensus Layer"]
            UTXOM["UTXO Management Contract"]
            Consensus["exSat Hybrid Consensus"]
            Validators["BTC & XSAT Validators"]
            Synchronizers["Bitcoin Synchronizers"]
        end
        
        subgraph BridgeLayer["🌉 Cross-Chain Bridge Layer"]
            Bridge["exSat Bridge Protocol"]
            BridgeValidation["Bridge Validation Engine"]
            AssetCustody["Decentralized Asset Custody"]
        end
        
        subgraph TokenLayer["🪙 Token Infrastructure"]
            XBTC["XBTC Token (BTC Representation)"]
            XSAT["XSAT Native Token"]
            USDC["USDC Stablecoin"]
        end
    end
    
    subgraph BitLendProtocol["💰 BitLend Protocol Smart Contracts"]
        direction TB
        
        subgraph CoreContracts["🏛️ Core Protocol Contracts"]
            BVault["BitLendVault
            • Position Management
            • Collateral Tracking
            • Loan Origination"]
            
            BBridge["BitLendBridge
            • exSat Bridge Integration
            • Asset Conversion
            • Cross-chain Verification"]
            
            BPriceOracle["BitLendPriceOracle
            • Real-time Price Feeds
            • Rebar Data Integration
            • Multi-source Validation"]
        end
        
        subgraph SecurityContracts["🛡️ Security & Risk Management"]
            BLiquidator["BitLendLiquidator
            • Health Factor Monitoring
            • MEV-protected Liquidations
            • Rebar Shield Integration"]
            
            BPoR["BitLendProofOfReserves
            • UTXO Verification
            • Collateral Transparency
            • Real-time Audit Trail"]
        end
        
        ContractSDK["🔗 ThirdwebSDK v5
        Contract Interaction Layer
        • Type-safe Contracts
        • Event Listening
        • Transaction Management"]
    end
    
    subgraph BitLendFrontend["🖥️ BitLend Frontend Application"]
        direction TB
        
        subgraph UserInterface["👤 User Interface Components"]
            Dashboard["📊 Dashboard
            • Position Overview
            • Health Monitoring
            • Quick Actions"]
            
            BridgeModal["🌉 Bridge Interface
            • BTC → XBTC Conversion
            • UTXO Verification UI
            • Transaction Tracking"]
            
            LoanManagement["💳 Loan Management
            • Deposit/Withdraw
            • Borrow/Repay
            • Interest Tracking"]
        end
        
        subgraph AnalyticsInterface["📈 Analytics & Verification"]
            UTXOViewer["🔍 UTXO Viewer
            • Bitcoin UTXO Explorer
            • Confirmation Status
            • Transaction History"]
            
            ProofOfReserves["✅ Proof of Reserves
            • Real-time Verification
            • Solvency Dashboard
            • Transparency Reports"]
            
            RebarAnalytics["📊 Rebar Analytics
            • Market Data
            • Liquidation Risks
            • MEV Protection Status"]
        end
        
        MarketStats["📈 Market Statistics
        • TVL Tracking
        • Interest Rates
        • Protocol Metrics"]
    end
    
    subgraph RebarIntegration["⚡ Rebar Data & MEV Protection"]
        direction TB
        RebarAPI["Rebar Data API"]
        RebarShield["Rebar Shield (MEV Protection)"]
        MempoolAnalytics["Mempool Analytics"]
        PriceFeeds["Professional Price Feeds"]
    end
    
    %% Enhanced Data Flow Connections
    
    %% Bitcoin to exSat Data Flow
    BTCNetwork -.->|"Real-time Block Data"| Synchronizers
    BTCTx -.->|"Transaction Monitoring"| UTXOM
    UTXO -.->|"UTXO State Updates"| UTXOM
    BTCBlocks -.->|"Block Verification"| Validators
    
    %% exSat Internal Flows
    Synchronizers -->|"Consensus Participation"| Consensus
    Validators -->|"Validation Results"| Consensus
    UTXOM -->|"Verified UTXO Data"| BPoR
    
    %% Bridge Operations
    Bridge <-->|"Asset Conversion"| BBridge
    BridgeValidation -->|"Security Validation"| BBridge
    Bridge -->|"Token Minting"| XBTC
    
    %% Token Interactions
    XBTC -->|"Collateral Asset"| BVault
    USDC -->|"Lending Asset"| BVault
    XSAT -->|"Governance & Staking"| BVault
    
    %% Smart Contract Interactions
    BBridge -->|"Bridged Assets"| BVault
    BPriceOracle -->|"Price Data"| BVault
    BPriceOracle -->|"Liquidation Prices"| BLiquidator
    BVault -->|"Position Data"| BLiquidator
    BPoR -->|"Collateral Verification"| BVault
    
    %% Rebar Integration
    RebarAPI -->|"Market Data"| BPriceOracle
    RebarShield -->|"MEV Protection"| BLiquidator
    MempoolAnalytics -->|"Mempool Insights"| BLiquidator
    Mempool -.->|"Pending Transactions"| MempoolAnalytics
    
    %% Frontend to Contract Interactions
    ContractSDK <-->|"Smart Contract Calls"| CoreContracts
    ContractSDK <-->|"Security Operations"| SecurityContracts
    
    %% User Interface Flows
    Dashboard <-->|"Position Management"| ContractSDK
    BridgeModal <-->|"Bridge Operations"| ContractSDK
    LoanManagement <-->|"Loan Operations"| ContractSDK
    
    %% Data Verification Flows
    UTXOViewer <-.->|"UTXO Query"| BPoR
    ProofOfReserves <-.->|"Reserve Verification"| BPoR
    RebarAnalytics <-.->|"Market Analytics"| RebarAPI
    
    %% Real-time Monitoring
    BLiquidator -.->|"Liquidation Events"| Dashboard
    MarketStats <-.->|"Protocol Metrics"| BVault
    
    %% Apply enhanced styling
    class BitcoinEcosystem,BTCNetwork,BTCTx,UTXO,Mempool,BTCBlocks bitcoinLayer
    class ExSatInfrastructure,DataConsensus,BridgeLayer,TokenLayer,UTXOM,Consensus,Validators,Synchronizers,Bridge,BridgeValidation,AssetCustody exSatLayer
    class XBTC,XSAT,USDC token
    class BitLendProtocol,CoreContracts,SecurityContracts,BBridge,BVault,BPriceOracle,BLiquidator,BPoR,ContractSDK contractLayer
    class BitLendFrontend,UserInterface,AnalyticsInterface,Dashboard,BridgeModal,LoanManagement,UTXOViewer,ProofOfReserves,RebarAnalytics,MarketStats frontendLayer
    class RebarIntegration,RebarAPI,RebarShield,MempoolAnalytics,PriceFeeds bridgeLayer

Architecture Overview

BitLend leverages exSat Network's unique hybrid consensus mechanism and Bitcoin UTXO indexing capabilities to create a truly transparent and trustless Bitcoin lending protocol. The architecture is designed with four main layers:

🟠 Bitcoin Ecosystem Layer

Real-time Bitcoin Data: Direct connection to Bitcoin network for live transaction and UTXO monitoring
Mempool Analysis: Integration with Bitcoin mempool for liquidation risk assessment
Block Verification: Continuous validation of Bitcoin block data through exSat's synchronizers

🔷 exSat Network Infrastructure

Hybrid Consensus: Combines Bitcoin's PoW security with exSat's PoS efficiency
UTXO Management: On-chain indexing of Bitcoin UTXOs for transparency
Cross-chain Bridge: Secure, decentralized bridge for BTC ↔ XBTC conversion
Validator Network: Dual validation system (BTC validators + XSAT validators)

💰 BitLend Protocol Layer

Position Management: Sophisticated collateral and loan tracking via BitLendVault
Price Oracle Integration: Multi-source price feeds including Rebar Data for accuracy
MEV-Protected Liquidations: Rebar Shield integration prevents front-running
Proof of Reserves: Real-time UTXO verification for complete transparency

So I have already created a ProofofReserve contract that in future would utilise the exsat query on evm side.

This custom oracle would:

Run as an off-chain service that listens for verification requests from the EVM contract

Query the exSat native (EOS) layer for UTXO data using the eos contract as you said above.

then Submit the verification results back to the EVM contract

🖥️ Frontend Application Layer

Intuitive Dashboard: Comprehensive position management and health monitoring
UTXO Verification UI: Visual proof of Bitcoin collateral backing
Rebar Analytics: Real-time market data and liquidation risk assessment
Bridge Interface: Seamless BTC to XBTC conversion with verification

📋 Components

Smart Contracts

BitLendBridge.sol: Integrates with exSat's bridge for BTC to XBTC conversion
BitLendVault.sol: Manages loan positions, collateral, and borrowing
BitLendPriceOracle.sol: Provides price feeds with Rebar Data integration
BitLendLiquidator.sol: Handles liquidations with MEV protection via Rebar Shield
BitLendProofOfReserves.sol: Verifies collateral using exSat's UTXO data

Frontend

Dashboard: Displays positions, health factors, and available actions
BridgeModal: Interface for BTC to XBTC conversion with UTXO verification
LoanManagement: Components for deposit, borrow, repay, and withdraw actions
RebarAnalytics: Shows market data and liquidation risks from Rebar
ProofOfReserves: Visual verification of collateral using UTXO data

🏆 Hackathon Submission

This project is a submission for the Bitcoin Hackathon 2025, targeting the following challenge tracks:

Best use of exSat
Best use of Rebar Data

🚀 Getting Started

Prerequisites

Node.js v16 or higher
An Ethereum wallet (MetaMask, etc.) connected to exSat Network
Bitcoin to use as collateral

Installation

Clone the repository:

git clone https://github.com/kamalbuilds/bitlend.git
cd bitlend

Install dependencies:

# Install contract dependencies
cd contracts
npm install

# Install frontend dependencies
cd ../frontend
npm install

Deploy the contracts to exSat Network:

cd contracts
npx hardhat run scripts/deploy.js --network exsatTestnet

Start the frontend:
```
cd ../frontend
npm run dev
```
Visit http://localhost:3000 to access the BitLend app.

📊 How It Works

Depositing Collateral

Connect your wallet and access the BitLend dashboard
Bridge your BTC to XBTC using the integrated bridge
Deposit your XBTC as collateral
Your collateral is verified using exSat's UTXO data

Borrowing

With collateral deposited, check your available borrowing limit
Borrow stablecoins at competitive interest rates
Monitor your health factor to avoid liquidation

Repaying and Withdrawing

Repay your loan partially or fully at any time
Once your loan is fully repaid, withdraw your collateral
Convert your XBTC back to BTC if desired

Liquidation Protection

If your position becomes under-collateralized:

The BitLendLiquidator monitors position health
Liquidations are processed through Rebar Shield to prevent front-running
A liquidation history is maintained for transparency

🛠️ Technology Stack

Smart Contracts: Solidity on exSat Network (EVM compatible)
Development Framework: Hardhat
Frontend: Next.js and React
Styling: Tailwind CSS
Blockchain Interaction: ethers.js
UTXO Data: exSat UTXO Management Contract
Market Data: Rebar Data API
MEV Protection: Rebar Shield

🔮 Future Roadmap

Multi-asset Collateral: Support for additional assets beyond BTC
Fixed-rate Loans: Stable borrowing rates for predictable payments
Governance: Community-owned protocol governance
Lightning Network Integration: Fast cross-chain transaction capabilities
Yield Strategies: Automated yield optimization for deposited collateral

📄 License

This project is licensed under the MIT License - see the LICENSE file for details.

👥 Contributors

🙏 Acknowledgements

exSat Network - For providing the Bitcoin-EVM infrastructure
Rebar Data - For Bitcoin analytics and MEV protection
OpenZeppelin - For secure smart contract libraries

Project Structure

The project consists of two main components:

Smart Contracts: Solidity contracts for the lending protocol (in /contracts)
Frontend: Next.js/React frontend for interacting with the contracts (in /frontend)

Smart Contracts

Contract Deployment

Option 1: Deploying with Hardhat (Original Method)

cd contracts
npm install
npx hardhat compile
npx hardhat run scripts/deploy.js --network exsat-testnet

Option 2: Deploying with thirdweb v5 (Recommended)

cd contracts
npm install thirdweb@^5.96.5 ethers@^6.9.2
# Make sure .env file exists with required variables
npx hardhat compile
node scripts/deploy-thirdweb.js

Required environment variables in .env:

PRIVATE_KEY=your_private_key_here
THIRDWEB_CLIENT_ID=your_thirdweb_client_id_here
EXSAT_NETWORK=testnet # or mainnet
# The following addresses are required for production deployment
EXSAT_UTXO_MANAGEMENT_ADDRESS=0x...
EXSAT_BRIDGE_ADDRESS=0x...
XBTC_TOKEN_ADDRESS=0x...
USDC_TOKEN_ADDRESS=0x...
FEE_COLLECTOR_ADDRESS=0x...

Contract Structure

BitLendBridge: Interfaces with exSat's bridge for BTC to XBTC conversion
BitLendVault: Manages lending positions, collateral, and borrowing
BitLendPriceOracle: Provides price feeds for BTC and stablecoins
BitLendLiquidator: Handles liquidation of under-collateralized positions
BitLendProofOfReserves: Implements UTXO verification for transparent collateral proof

Frontend

Installation

cd frontend
npm install

Running the Application

cd frontend
npm run dev

Frontend Configuration

The frontend uses thirdweb v5 for interacting with the deployed contracts. Configuration can be found in:

frontend/config/contracts.ts: Contract addresses and chain configurations
frontend/lib/client.ts: thirdweb client configuration
frontend/hooks/useContractInteraction.ts: Custom hooks for contract interactions

thirdweb v5 Migration

The frontend has been migrated from thirdweb v4 to v5. Key changes include:

Updated Imports:
- Using new imports from thirdweb/react rather than @thirdweb-dev/react
- Direct imports from ethers rather than ethers/lib/utils
Custom Hooks:
- Created custom hooks for contract interactions in useContractInteraction.ts
- Specialized hooks for common operations (deposit, borrow, repay, withdraw)
ThirdwebProvider:
- Simplified provider configuration in ThirdwebProviderWrapper.tsx
Contract Interactions:
- Using getContract to create contract instances
- Using prepareContractCall and useSendTransaction for write operations
- Using useReadContract for read operations

Deployment

After deploying the contracts, update the contract addresses in frontend/config/contracts.ts:

export const CONTRACT_ADDRESSES = {
  testnet: {
    BITLEND_VAULT: "0x...",
    BITLEND_BRIDGE: "0x...",
    BITLEND_PRICE_ORACLE: "0x...",
    BITLEND_LIQUIDATOR: "0x...",
    BITLEND_PROOF_OF_RESERVES: "0x...",
    XBTC_TOKEN: "0x...",
    USDC_TOKEN: "0x..."
  },
  mainnet: {
    // Mainnet addresses
  }
};

Additional Notes

Make sure to set your thirdweb client ID in the environment variable NEXT_PUBLIC_THIRDWEB_CLIENT_ID
For development, you can use mock contracts which will be deployed automatically if real addresses are not provided
The frontend shows a UTXO verification panel that demonstrates the capability to verify Bitcoin collateral through exSat's on-chain UTXO index

Name		Name	Last commit message	Last commit date
Latest commit History 16 Commits
contracts		contracts
frontend		frontend
README.md		README.md

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BitLend: Trustless BTC Lending Protocol on exSat

Project Overview

🔑 Key Features

Bitlend Demo Video

🔧 Technical Innovations

UTXO-Based Proof of Reserves

Rebar Data Integration

Architecture Diagram

Architecture Overview

🟠 Bitcoin Ecosystem Layer

🔷 exSat Network Infrastructure

💰 BitLend Protocol Layer

🖥️ Frontend Application Layer

📋 Components

Smart Contracts

Frontend

🏆 Hackathon Submission

🚀 Getting Started

Prerequisites

Installation

📊 How It Works

Depositing Collateral

Borrowing

Repaying and Withdrawing

Liquidation Protection

🛠️ Technology Stack

🔮 Future Roadmap

📄 License

👥 Contributors

🙏 Acknowledgements

Project Structure

Smart Contracts

Contract Deployment

Option 1: Deploying with Hardhat (Original Method)

Option 2: Deploying with thirdweb v5 (Recommended)

Contract Structure

Frontend

Installation

Running the Application

Frontend Configuration

thirdweb v5 Migration

Deployment

Additional Notes

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