Satoshi Protocol, a decentralized collateral debt position (CDP) protocol, saw its total value locked (TVL) surge earlier this week to reach a new all-time high, as shown by data from DefiLlama. The project’s TVL has increased by 150% over the past week and has soared by nearly 600% in the past month, hitting a record $116.5 million as of this writing.
In mid-December 2024, we reported on Satoshi’s first major spike as the project broke the $20 million mark following a tenfold increase. After several months of stability, the Bitcoin-backed stablecoin project spiked at the end of April from $20 million to over $60 million.
Shortly after a small correction, the protocol’s TVL broke above the $100 million mark on Thursday and set its new record.
Satoshi Protocol is a fast-growing CDP project that issues a USD stablecoin backed by Bitcoin. Known as satUSD, the stablecoin uses a MakerDAO-like model to unlock Bitcoin liquidity.
Until recently, satUSD was available only on Bitcoin-related layer 2 chains, such as BSquared, BOB, and Bitlayer. Recently, it has expanded to Ethereum layer 2 networks, including Base and Arbitrum. This expansion enabled the protocol to attract nearly $100 million in new liquidity and set its new record.
As of this writing, Base accounts for the largest share of Satoshi’s TVL, with over $53 million, followed by Arbitrum, with $43 million.
BSquared continues to hover near the $20 million mark that it reached in mid-December.
satUSD aims to maintain the $1 price through over-collateralization, allowing users to mint the stablecoin at a 110% collateralization ratio. They can deposit BTC derivatives like clBTC and uBTC.
The token’s design also includes a peg mechanism and an instant liquidation module. When the price drops below $1, arbitrageurs can purchase the stablecoin and redeem it for $1 worth of BTC from the protocol’s reserves.
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