Smart Contract Architecture

Smart contracts are the key components that facilitate the tokenization and redemption of Bitcoin on the Ethereum blockchain, governance and for regulating the functionality. The Insaanity smart contract architecture falls under the following categories

  1. Deposit and Redemption Contracts: The deposit and withdrawal contracts are the core components of the system. They enable the tokenization of Bitcoin into BTC.i and the redemption of BTC.i back to Bitcoin. Interacting with these contracts facilitates the conversion of Bitcoin to BTC.i and vice versa. The deposit contract handles the minting of BTC.i tokens when Bitcoin is deposited and the proof for the deposit is revealed to the custodians of the threshold wallet, while the redemption contract handles the burning of BTC.i tokens and the release of the equivalent amount of Bitcoin.

  2. Network Integration: Insaanity network includes number off-chain nodes. The nodes are responsible for storing and managing the private key operations associated with the threshold wallet containing BTC and are maintained by the custodians. The smart contracts facilitates the smooth functioning of the network while accomplishing various functionalities including the randomness generation using random beacon, threshold wallet generation are categorised under this category.

  3. Collateralization Contracts: Collateralization contracts are used to secure the system and provide guarantees for the proper functioning of BTC.i. Custodians that are native to the Insaanity network or the Eigen layer derived are required to lock up a certain amount of Ether (ETH) as collateral to participate in the system. Collateralization contracts manage the collateral and enforce the necessary rules and mechanisms to ensure the security and stability of the ecosystem.

  4. Governance Contracts: Governance contracts handle the governance aspects of the system. These contracts facilitate the decision-making processes, parameter adjustments, wallet capacity and lifetime and other upgrades of the protocol.

  5. Oracle Based Contracts: Oracles can be integrated into the smart contract architecture to provide price feeds or other external data necessary for the functioning of the system. Oracles ensure that the exchange rate between Bitcoin and BTC.i and the price relationship between BTC and ether remains accurate and up to date.

  6. Additional Contracts: The smart contract architecture also includes various additional contracts to manage collateralization functionalities, rules and policy enforcement, Reward and slashing mechanism, handling dispute resolutions, and provide other functionalities required for the smooth functioning of the network.

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