Using Bitcoin as collateral without wrapping it: the design of a BTC collateral vault
Baris Sozen
This is the Monday deep-dive — one mechanism, examined closely. Suppose a trading agent needs to post collateral, and the asset it wants to post is Bitcoin. That is a reasonable thing to want: BTC is the deepest, most liquid collateral asset in crypto. The problem is that Bitcoin the chain cannot run the contract logic a collateralized position needs — no expressive smart contracts, no objects, no state machine watching a position over time. So the collateral lives on one chain and the obligatio