ValoraBTC Protocol: a routing & settlement layer for BTC liquidity

#web3 #cryptocurrency #blockchain #bitcoin

Abstract

ValoraBTC is an infrastructure protocol focused on routing and settling Bitcoin liquidity across heterogeneous BTC representations. It is not a wrapped BTC clone, not a Bitcoin L2, and not a custody layer. This document outlines the system’s positioning, design goals, and architectural boundaries.

What ValoraBTC is? and what it is not?

ValoraBTC is not:

A wrapped BTC issuer
A Bitcoin Layer-2
A custody solution
A yield engine

ValoraBTC is:

A BTC liquidity routing and settlement protocol
A coordination layer between multiple BTC “rails”
A system designed to optimize flow, verification, and settlement, not to replace Bitcoin itself

The protocol assumes a future where BTC liquidity exists simultaneously across multiple representations (native BTC, bridged BTC, synthetic BTC, vault-based BTC). Rather than competing with these systems, ValoraBTC coordinates between them.

Core principle: coordination, not custody

At no point does ValoraBTC attempt to:

Hold user BTC in a discretionary manner
Abstract Bitcoin’s security model
Replace existing trust assumptions

Instead, it defines:

Rules for routing BTC liquidity
Settlement logic between rails
Incentive alignment for validators and coordinators

Custody risk is deliberately minimized by design.

Dual-token system overview

ValoraBTC uses two distinct tokens with separated responsibilities.

VLBTC — ecosystem & value layer

Fixed supply: 21,000,000
Represents long-term participation in the ecosystem
Used for governance, staking, and protocol incentives
Distributed via presale, ecosystem allocation, and governance programs

VLBTC is not minted, not rebased, and not inflationary.

VLCOR — coordination & settlement layer

Minted and burned 1:1 with BTC entering or leaving the system
Used internally for routing, validation, and settlement logic
Not marketed and not intended for speculative use
Exists only while corresponding BTC is active in the system

This separation prevents technical mechanics from interfering with economic signaling.

Explicit non-goals (by design)

ValoraBTC explicitly avoids:

Inflationary reward schemes
Unsustainable APYs
Immediate token transfer before TGE
Hidden liquidity recycling
Implicit custody assumptions

Liquidity provisioning, vesting, and token claims follow predefined and auditable rules.

Why this architecture exists

BTC DeFi is structurally fragmented. No single bridge, vault, or L2 can realistically become the universal standard. ValoraBTC treats this fragmentation as a given and focuses on interoperability and coordination rather than dominance.

Closing note

This post defines system boundaries, not marketing claims. Subsequent protocol notes will explore token separation, settlement logic, and risk considerations in greater depth.

References:
Whitepaper v1.2 — ValoraBTC Protocol
https://valorabtc.com
https://valorabtc.com/assets/ValoraBTC-Whitepaper.pdf
https://github.com/ValoraBTC/valorabtc-protocol