BounceBit Describes Itself As

BounceBit is a Layer 1 protocol that aims to merge centralized and decentralized finance (CeDeFi), enabling Bitcoin holders to engage in yield-generation. Leveraging a dual token PoS model, secured by both BTC and BB, BounceBit aims to make decentralized applications accessible to a broader audience while maintaining transparency and regulatory compliance.

Project Function

BounceBit’s core functionality is built around its CeFi + DeFi Parallel Yield Generation model, which provides multiple yield options for BTC holders across both centralized and decentralized environments:

• CeFi and DeFi Yield Options: BounceBit enables BTC holders to earn three types of yield— through a CeFi framework where user contributions are managed by Mainnet Digital’s custodial services, staking rewards from participating as validators in BounceBit’s network, and opportunity yield from various on-chain DeFi activities. This parallel yield system allows BTC to be actively used within the ecosystem, moving beyond passive holding.
• Shared Security Clients (SSCs): SSCs are specialized applications secured by BTC Restaking. These include sidechains, data availability layers, oracles, and bridges, which leverage Bitcoin-backed trust models. SSCs enable a wide range of decentralized applications within the BounceBit ecosystem, allowing BTC holders to engage in DeFi activities like staking, farming, and liquidity provision on a Bitcoin-secured network.

Token Utility

BounceBit’s ecosystem is structured around its dual-token model, designed to facilitate secure network operations and engagement across multiple applications:

• BB Token: BB is used for staking and governance, and plays a key role in reward distribution for validators, strengthening network engagement.

EVM Compatibility & Developer Support

BounceBit’s full EVM compatibility enables developers to migrate projects from Ethereum seamlessly, encouraging a broader range of decentralized application development on the BounceBit platform. Solidity support and access to Ethereum’s ecosystem tools strengthen BounceBit’s position as an accessible and secure DeFi environment. The platform is also structured to adopt future Ethereum advancements, ensuring continued scalability and functionality.

BounceClub: A User-Centric Web3 Universe

BounceClub is BounceBit’s on-chain Web3 environment designed to simplify smart contract deployment and reduce dApp redundancy. Inspired by Apple Inc.’s user-centric design philosophy, BounceClub aims to empower users to create, customize, and engage with decentralized applications without coding knowledge:

• Meme Token Launchpad: BounceClub includes a launchpad for meme tokens, with initial token pricing and supply dynamically set by a bonding curve mechanism. Once a specified market cap is reached, liquidity from the bonding curve is deposited into BitSwap and burned, allowing for liquidity control and incentivizing the meme token market within BounceBit.
• Quanto Derivatives: BounceClub introduces Quanto, a decentralized perpetual quanto contract allowing users to take long or short positions by staking supported tokens. Quanto derivatives let users stake non-native assets on BounceBit, benefiting from cross-currency settlements and helping manage currency risks in decentralized finance.
• AI-Powered Agents: BounceClub includes BounceClub AI, featuring customizable Agents capable of processing end-user requests with AI-driven strategies. These Agents access knowledge bases and user-defined preferences to provide specialized AI services, positioning BounceBit as an innovator in personalized AI within blockchain ecosystems.

Sustainable Validator Economics

BounceBit allows validators to set commissions on staking rewards to balance economic viability with network maintenance. This approach is designed to support sustainable validator operations, incentivizing long-term network security and stability.

About the Founder

BounceBit was founded in 2023 by Jack Lu. Lu specializes in researching blockchain mechanisms, and holds a degree in Economics & Quantitative Economics from Reed College. 

BounceBit raised $6M during its Seed round led by Blockchain Capital and BreyerCapital. Other participants included Bankless Ventures, NGC Ventures, OKX Ventures, MEXC Ventures, HTX Ventures, and Nomad Capital.

Risks of BB

Like an investment in other crypto assets, there are some general risks to investing in BB. These include:  (i) volatility risk and liquidity risk, (ii) short history risk, (iii) demand risk, (iv) forking risk, (v) code defects, (vi) regulatory risk, (vii) electronic trading risk, and (viii) cyber security risk. For additional information of these and other general risks associated with crypto assets and Uphold’s platform, please refer to the Risks Specific to Holding Digital Assets statement.

In addition to these general risks, an investment in BB is subject to the following specific risks:

• The Layer-1 space is intensely competitive. Several new blockchains continue to emerge which boast high-profile teams, claim unparalleled transaction speed, energy-efficiency, as well as developer-friendly programming languages. Any potential success associated with BB is reliant on the extent to which the BounceBit is adopted by enterprises and developers.

We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with BB. Investors should conduct their own research and perform their own assessment before trading any crypto asset to determine the appropriate level of risk for their personal circumstances.

The BB community and BounceBit core team are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of BB have no recourse to the BB community, BounceBit core team, or Uphold if BB declines in value for any reason.

Changes to applicable law may adversely affect the use, transfer, exchange, or value of any of your crypto assets, and such changes may be sudden and without notice.

Uphold’s Evaluation Process

Prior to listing BB on the Uphold Platform, Uphold performed due diligence on BB and determined that BB is unlikely to be a security or derivative under relevant securities legislation. Uphold’s analysis including reviewing publicly available information on the following: 

• The creation, governance, usage, and design of BB, including ensuring the source code being open-source, audited and peer reviewed, security, and roadmap for growth in the developer community. 
• The supply, demand, maturity, utility, and liquidity of BB.
• Marketing materials put forward by the BB social team including, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
• Material technical risks associated with BB, including any code defects, security breaches and other threats concerning BB and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them.
• Legal and regulatory risks associated with BB, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of BB.