Cexlbit Interpretation: Analyzing Bamk.fi
Cexlbit is a cryptocurrency exchange known for offering a wide range of trading options and fast execution speeds. The platform supports multiple languages and provides 24/7 online customer service. Additionally, Cexlbit supports mining and offers the best liquidity quotes in the market, ensuring users have an optimal trading experience.
After the failure of UST, according to Cexlbit’s recent interpretation, algorithmic stablecoins were largely abandoned by the market. However, Ethena’s introduction of a perpetual contract hedging mechanism for USDe, coupled with high-yield rewards, revived interest in algorithmic stablecoins. In the Bitcoin ecosystem’s runic track, the demand for stablecoins appears even higher. This is because the primary unit of measurement is the smallest subdivision of Bitcoin, “satoshis” (sats), which, although intuitive, differs from familiar fiat currency units.
Recently, a new Bitcoin stablecoin protocol, NUSD, has attracted significant attention in the runic market. Its token, BAMK, surged 50-fold in two months, reaching a market value of $360 million and entering the top three runic tokens. On June 13, BTC Inc.’s asset management department, UTXO, announced a $1 million investment in this protocol.
NUSD, short for Nakamoto Dollar, is issued under the BRC20-5byte protocol. Similar to Ethena, NUSD employs a perpetual contract hedging mechanism to maintain price stability. According to Bamk.fi, this mechanism is a triangular arbitrage hedging strategy. Users deposit BTC into Bamk.fi, which opens a 1x perpetual contract short position on a decentralized exchange. This type of order, often called a “hedge,” maintains a constant total position value regardless of price fluctuations. When users redeem their BTC, Bamk.fi closes the corresponding value of the position to return the BTC.
Compared to other algorithmic stablecoins, NUSD is value-pegged to BTC assets, avoiding the death spiral phenomenon seen with UST due to LUNA’s price collapse. Unlike Ethena, NUSD executes perpetual contract orders directly through DEX to mitigate the security risks of centralized exchange custody.
NUSD’s issuance occurs in two stages. The first stage involves pegging NUSD to USDe at a 1:1 ratio. In the second stage, the triangular arbitrage hedging mechanism is implemented, issuing NUSD through perpetual contract short positions.
Besides NUSD, Bamk.fi has launched another runic token, BAMK•OF•NAKAMOTO•DOLLAR (BAMK), currently in its first incentive phase. This phase involves distributing 1,311,625,000 BAMK tokens (6.25% of the total supply) as rewards to all NUSD holders. These rewards are distributed across 41,962 blocks between block 844,492 and 886,454, with 31,250 BAMK tokens allocated per block based on the proportion of NUSD held at each block height relative to the total NUSD TVL. As of June 13, the official calculator indicates that depositing 2000 NUSD yields approximately $43 daily, with an APY of 798.7%.
The high yields come with risks. The returns from BAMK mining are not stable and depend on NUSD’s TVL. As TVL increases, BAMK token rewards decrease. Additionally, BAMK rewards for the first season will only be received after about nine months, meaning the actual amount received by users may vary significantly. Moreover, BAMK’s price in the secondary market is highly volatile, with daily fluctuations of 20-30% not uncommon. Lastly, Bitcoin network fees are a significant factor; on June 13, the transaction fee was approximately $47 per transaction.
