YALA: Next-Gen Liquidity Protocol Unlocking BTC’s True Potential
The mission and vision of YALA
The birth of YALA is aimed at solving the stubborn problem of Bitcoin’s difficulty in participating in DeFi. Its core idea is “to truly enable BTC to participate in global DeFi”. Through a multi-mechanism of BTC native scripts + cross-chain + insurance, YALA is building a secure, decentralized, and composable financial network.
Why is the BTC DeFi opportunity huge?
Currently, the market capitalization of Bitcoin far exceeds that of other chains, but its participation in DeFi is extremely low. Taking DeFiLlama data as an example, the total value locked (TVL) of the entire BTC network is only 2.8 billion USD, while ETH’s TVL is close to 60 billion USD. YALA believes that there is a huge opportunity hidden behind this imbalance, and as long as the issues of Bitcoin’s smart contracts and scalability can be resolved, BTC’s financial potential will be unleashed.
How to use $YU to obtain Liquidity?
In the YALA protocol, $YU is a native liquidity token supported by over-collateralization of BTC:
- Users deposit BTC into the Vault module;
- The protocol automatically assesses its value and collateral rate;
- According to the price information provided by the Oracle, mint the corresponding amount of $YU;
- Users can participate in lending, trading, and re-staking operations with $YU.
The entire process is completed through BTC native scripts and Prover verification, ensuring asset security while achieving the mapping execution of smart contract logic.
Analysis of Cross-chain and Insurance Systems
Cross-chain mechanism: YALA supports mapping BTC to target chain assets (such as yBTC on Ethereum) after locking it, enabling cross-chain interaction. Using Atomic Swap and multi-signature bridging methods, YALA completes complex interactions without sacrificing the security of BTC.
Insurance System: YALA draws on the Takaful model from Islamic finance, introducing the Qard Hasan loan module and a surplus distribution mechanism. Policyholders enjoy an automatic compensation mechanism, insurers can earn management profits, and have the right to refuse high-risk lending behaviors, achieving a shared responsibility for both income and risk.
The future development path of YALA
YALA is not just a liquidity protocol, but also a BTC DeFi infrastructure platform:
- Native state machines and script extensions: driving the application expansion of Bitcoin Taproot to achieve lightweight state transitions;
- DAO governance mechanism: Gradually introduce $YALA as the governance token to vote on risk parameters and system upgrades;
- Data availability layer upgrade: Introducing BTC native DA solutions such as Nubit to achieve lightweight Rollup;
- Institutional Adoption: Promote the compliance deployment of YALA to meet the needs of institutional custody.