Abstract
This post outlines the explicit constraints and risks considered in the design of ValoraBTC, including those that cannot be eliminated entirely.
Core constraints
ValoraBTC is constrained by:
- Bitcoin’s base-layer finality
- Cross-chain latency
- Validator coordination limits
- External bridge security assumptions
These constraints are acknowledged, not hidden.
Key risks
1. Bridge-level risk
BTC representations inherit risk from their respective bridges or vaults.
Mitigation:
- Multi-rail support
- No forced dependence on a single bridge
2. Settlement delay risk
BTC settlement is not instant.
Mitigation:
- Explicit settlement windows
- No promise of instant exits
3. Economic attack vectors
Incentive misalignment can destabilize routing.
Mitigation:
- Separation of VLBTC and VLCOR roles
- No inflation-based security assumptions
What is deliberately avoided
- Algorithmic pegs
- Reflexive reward loops
- Hidden rehypothecation
- Opaque treasury mechanics
Final note
Risk disclosure is not a weakness.
In infrastructure protocols, it is a requirement.
Links:
https://valorabtc.com
https://valorabtc.com/assets/ValoraBTC-Whitepaper.pdf
https://x.com/ValoraBTC
https://t.me/ValoraBTC
https://github.com/ValoraBTC/valorabtc-protocol
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