Mapping BTC in Custody for Licensed Custodians Using New Version in exSat

Some licensed custodial institutions don’t have experience or not suitable on issuing ERC-20 versions of BTC on Ethereum. Therefore, they need to rely on ''Credit Staking Mode'' on exSat for staking.

Mapping custodial BTC assets to exSat for staking in this way is very friendly for this type of custodians.

exSat will assist these types of custodial institutions for mirroring and settlement of BTC on exSat, including issuing BTC and adjusting the corresponding amounts.

As shown in the above figure:

  1. Custodians can securely store their BTC in their own wallets on the native Bitcoin network while staking on exSat. Custodians should provide the BTC wallet address and pubkey to exSat.

  2. To prove ownership of the BTC assets, custodians must sign a message generated by exSat using the private key of the BTC wallet holding the Bitcoins. The message being signed looks like : EXSAT-BTC address-Validator address,which:

    • EXSAT: ASCII characters

    • BTC address: the BTC wallet address supplied to exSat by the custodian.

    • Validator address: the exSat address generated by the custodian via running the Validator client.The custodian will supply this address to exSat.

    The Custodian could sign this message with the private key of the BTC wallet address supplied to exSat in the way he/she likes just as signing a BTC transaction, and send the message and signature to exSat via the mail address supplied when registering the Validator account.

  3. exSat verifies the signature and monitors the balance of the linked BTC wallet address. Upon successful verification, exSat mints a corresponding amount of wrapped BTC and stakes it to the validator's account.

  4. If any BTC is transferred out of the designated wallet on the Bitcoin network, exSat promptly un-stakes and burns the corresponding wrapped BTC, ensuring a secure and transparent staking process.

Notes: Custodians should provide the BTC wallet address to exSat for monitoring the BTC balance of it. The credit version BTC could only be used for staking and can’t be transferred freely.

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