btcgrow.io Light Paper


Introduction

Bitcoin is the world’s most secure and decentralized digital asset, but it remains inherently passive — offering no native yield. While chains like Ethereum have built rich DeFi ecosystems that unlock earning opportunities, BTC holders are often limited to centralized or custodial options that compromise ownership. btcgrow.io changes this by introducing a permissionless decentralized non-custodial staking protocol through Wanchain and Cardano smart contract. Through btcgrow.io, users can earn passive income while retaining full control over their Bitcoin — combining security, sovereignty, and yield in a single solution, using only their Bitcoin wallet to control their stake.

btcgrow.io enables Bitcoin holders to stake their assets with a simple interface, offering a non-custodial and liquid staking solution. While BTC asset is locked by Wanchain script and managed by  Cardano smart contracts, users can access their asset anytime  in a secure & transparent manner using their Bitcoin wallet. Unlike traditional staking systems, btcgrow.io has no lock-up period, allowing users to withdraw their BTC at any time. Our goal is simple: to unlock Bitcoin’s earning potential while staying true to its core principles of self-custody and security.


Protocol Architecture & Cardano Integration

Why use Cardano Smart Contract

Cardano is a uniquely powerful foundation for unlocking BTC yield. While many DeFi protocols exist on Ethereum, the Cardano blockchain offers key advantages for secure and predictable financial operations:

1. Truly Decentralized Network

  • Over 3,000 stake pools

  • No reliance on centralized validators

  • Active on-chain governance

2. Predictable & Low-Cost Transactions

  • UTxO model ensures deterministic execution

  • No gas war, no front-running

  • Transaction fees are predictable and affordable

3. Composable DeFi Stack for Yield Generation

  • Native support for on-chain lending, fixed-rate income, and leverage protocols

  • Integration-ready with platforms like Danogo

  • wanBTC can plug into Cardano-native DeFi for continuous, compounding yield

4. Security-First Smart Contracts

  • Written in Plutus/Aiken

  • On-chain validation of every contract interaction

  • Open-source and community-audited

By choosing Cardano, btcgrow.io leverages an efficient, secure, and underexploited DeFi layer — giving BTC holders the best of both worlds.

High level architecture

btcgrow.io is designed based on the interaction between Cross-chain Bridge, Bridged Assets Management, and Yield Generation through decentralized lending. Below are the key components of the architecture:

1. Bridge layer - Powered by Wanchain

To bring BTC onto Cardano, btcgrow.io leverages WanBridge, Wanchain’s decentralized, direct, and non-custodial value-transfer protocol. WanBridge enables users to lock native BTC and mint wanBTC on Cardano — without relying on intermediary blockchains or centralized custodians.

Cross-chain transactions on WanBridge are executed and secured by a decentralized network of permissionless bridge nodes, which are rotated and re-elected on a monthly basis. These nodes use a combination of Secure Multiparty Computation (sMPC) and Shamir’s Secret Sharing cryptography to collectively manage the locking, minting, and release of assets across chains.

This architecture ensures that:

  • Native BTC is securely locked during the wrapping process

  • Wrapped BTC (wanBTC) is verifiably backed and redeemable

  • Arbitrary messages and data can be transferred securely between Bitcoin and Cardano

Importantly, any participant can deploy a WanBridge node, reinforcing the system’s openness and decentralization. WanBridge has proven to be a sustainable Proof-of-Stake blockchain and a reliable decentralized bridge network, operating continuously for over 7.5 years since inception without interruption.

More details on WanBridge architecture here.

2. Bridge Asset Management

Once wanBTC is minted on Cardano, it is managed by a Cardano-native smart contract that tracks ownership, deposits, and staking activity. This contract acts as the core ledger of btcgrow.io, ensuring that:

  • Ownership of BTC remains transparent and verifiable on-chain

  • Users can withdraw their BTC at any time (liquid staking)

  • Deposited wanBTC is routed toward yield-generating protocols securely

This smart contract also serves as the controller for managing the flow of BTC capital — determining how much is held idle, how much is actively supplied to DeFi strategies and how much is waiting for withdrawal.

3. Lending Protocol - Danogo Flexible Pool Lending

To generate yield, wanBTC is supplied into the Danogo Flexible Lending Pool, a decentralized protocol on Cardano that supports variable-rate lending. Through this pool:

  • Deposited wanBTC is made available to borrowers on-chain

  • Borrowers may include retail users or leveraged trading platforms

  • Lenders (BTC holders) earn interest from the borrowing activity

  • Funds remain liquid and lenders can withdraw at any time based on pool utilization

Danogo ensures that lending is composable, decentralized, and governed by transparent interest rate dynamics. As liquidity demand grows, so does the yield opportunity for BTC stakers.

How it works

btcgrow.io is built to make BTC staking as simple and secure as holding it. With a focus on self-custody and flexibility, users can stake and unstake at any time — without lockups or custodial risk.


Stake BTC – Simple, Non-Custodial, Yield-Ready
Staking with btcgrow.io is designed to be seamless and non-custodial — all a user needs is their Bitcoin wallet.


1. Initiate from Your BTC Wallet

Users interact directly with btcgrow.io through a user-friendly interface. After signing the transaction, their BTC is sent to WanBridge, a decentralized, non-custodial bridge that locks the BTC securely without requiring centralized intermediaries.

2. Mint wanBTC on Cardano

Once BTC is locked on the Bitcoin network, WanBridge mints wanBTC, a wrapped version of BTC, directly on the Cardano blockchain. Each wanBTC is backed 1:1 by the BTC held in the bridge contract.

3. Secure Custody via Smart Contract

The freshly minted wanBTC is automatically sent to btcgrow.io’s Bridge Asset Management smart contract on Cardano. This smart contract:

  • Maintains proof of ownership

  • Tracks user deposits

  • Make sure the assets could be routed into correct yield protocol

4. Earn Yield via Decentralized Lending

Staked wanBTC is supplied to a decentralized lending pool, such as Danogo’s Flexible Lending Protocol, where it is made available to borrowers and leveraged trading strategies. In return, users earn passive yield — while keeping their assets liquid and under full control.


Withdraw BTC – Seamless Exit, Full Sovereignty

btcgrow.io ensures that your BTC remains liquid and accessible at all times. With no lock-up and no middlemen, withdrawing is as easy as staking.

1. Initiate Withdrawal from btcgrow.io

Users begin by initiating a withdrawal through the btcgrow.io interface. This triggers the withdrawal of wanBTC from Danogo’s Flexible Pool Lending, returning the assets to the Bridge Asset Management smart contract on Cardano.

2. Burn wanBTC via WanBridge

The Bridge Asset Management smart contract sends the user’s wanBTC to WanBridge, where it is burned. This action triggers the release of the equivalent amount of native BTC previously locked on the Bitcoin network.

3. Receive BTC to Your Wallet

The native BTC is sent directly back to the user’s original Bitcoin wallet, completing the full staking cycle. Every step is fully transparent and verifiable on both the Bitcoin and Cardano blockchains.

4. No Lock-In, No Waiting

btcgrow.io imposes no lock-up periods, no slashing penalties, and requires no centralized approvals. Users can stake or withdraw at any time — maintaining complete control over their assets throughout the process.


Risks & Mitigations

btcgrow.io is designed around the core principles of self-custody, transparency, decentralized, and minimized trust assumptions. While the protocol is structured to reduce risks, all DeFi systems carry inherent vulnerabilities. Below are the primary risks and how btcgrow.io mitigates each:


1. Bridge Risk

Cross-chain bridging involves locking BTC on the Bitcoin network and minting wrapped tokens on Cardano. A failure in the bridge protocol could lead to loss or inaccessibility of funds.

Mitigation:

  • btcgrow.io uses WanBridge, a non-custodial, decentralized bridge secured by permissionless rotating nodes using sMPC + Shamir’s Secret Sharing.

  • The bridge design avoids reliance on centralized relayers or multi-sig wallets.

  • Each minting/burning action is fully auditable and verifiable on-chain.

2. Smart Contract Risk

Bugs or vulnerabilities in the Cardano smart contracts could result in funds being locked, incorrectly routed, or exploited.

Mitigation:

  • All smart contracts are developed with security-first practices, using Aiken.

  • Smart contracts are open-source, enabling transparency and community review.

  • Third-party audits will be conducted before mainnet launch.

  • A staged rollout and testnet deployment help identify bugs early with real user feedback.

3. Lending Protocol Risk

If the lending platform fails, is exploited, or becomes illiquid, staked BTC may become temporarily inaccessible or incur loss.

Mitigation:

  • btcgrow.io integrates with Danogo’s Flexible Lending Pool, which uses on-chain logic for transparent fund management and interest accrual.

  • Loans are always over-collateralized, ensuring that loans are backed by assets exceeding the borrowed amount.

  • Danogo has liquidation mechanisms to prevent insolvency, ensuring that undercollateralized loans are quickly settled to protect lenders.

  • Integration contracts ensure that wanBTC is never transferred to unverified third parties.

  • Danogo has a reserve threshold to prevent liquidity shortages. However, when the pool experiences a liquidity shortage, borrowing rates increase sharply, making it more expensive for borrowers to maintain their loans. This incentivizes borrowers to repay their loans to avoid high borrowing costs, which gradually restores available liquidity.

Disclaimer & Risk Disclosure

This litepaper is for informational purposes only and does not constitute financial, legal, or investment advice. Participation in btcgrow.io platform involves risks, including but not limited to market volatility, regulatory uncertainties, and potential smart contract vulnerabilities

Danogo does not guarantee fixed returns or risk-free investments, as all transactions are subject to market conditions, borrower defaults, and liquidity risks. Users should conduct their own due diligence and consult with qualified financial or legal advisors before engaging with the platform.

By participating in the btcgrow.io ecosystem, users acknowledge and accept the inherent risks of decentralized finance (DeFi) and blockchain technology. btcgrow.io shall not be held liable for any losses, damages, or disruptions resulting from the use of the platform or its associated services