📐Protocol Architecture

Our cross-chain lending protocol utilizes a hub and spoke model, leveraging the strengths of the Bitcoin, Ethereum to create a cohesive and robust lending platform. This section will delve into how these components interact to facilitate seamless operations, enhance security, and ensure robust system functionality.

Hub & Spoke Model

Hub:

• The OrdiBank network acts as the central hub in our architecture. It is responsible for managing the core logic of the protocol, including the tracking of all transactions, managing the state of loans and collateral, and facilitating cross-chain interactions.

• The hub centralizes critical functions but operates in a decentralized manner, ensuring transparency and security. It communicates with various blockchain networks (spokes), orchestrating the protocol activities and ensuring consistency and reliability across different blockchains.

Spokes:

Bitcoin Network: This network functions as one of the spokes, where satoshis are locked using Discreet Log Contracts (DLC). These locked satoshis serve as collateral for loans issued in stablecoins on the Ethereum network.

Ethereum Network: Another key spoke, the Ethereum network, is where stablecoin operations occur, including loan disbursements and repayments. It also hosts our ORBK token, facilitating governance and various protocol interactions.

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Security Advantages

Our protocol is designed with several layers of security to protect assets and ensure trustworthy operations:

• Use of Tapscript: On the Bitcoin network, we utilize Tapscript to enhance the scripting capabilities, allowing for more complex and secure types of transactions. This not only secures the locked satoshis but also makes the operations more flexible and adaptable to various scenarios.

• Security of Decentralised Oracles: The decentralised oracles play a crucial role in providing reliable and tamper-proof data for asset pricing. This is essential for maintaining fair and accurate valuation of collateral and ensuring the integrity of loan operations.

Attestation and Validation

• Attesting Locked Bitcoin: The hub needs to attest that the Bitcoin is securely locked and verify this before any stablecoin loans are issued on Ethereum. This involves cryptographic proofs and interactions between the Bitcoin and OrdiBank Protocol.

• Validating Wrapped Versions: Once the Bitcoin is locked, a wrapped version of it may be represented on Ethereum or other target chains. The hub must validate these representations to ensure they are accurate and correctly backed by the actual locked Bitcoin.

Loan and Collateral Management

• Tracking Loans and Collateral: The OrdiBank network tracks all user loans and their associated collateral ratios. This information is vital for managing risk and ensuring the protocol remains solvent and secure.

• Handling Liquidations: In scenarios where collateral values fall below required thresholds, the protocol can automatically initiate liquidation processes to safeguard all parties' interests. These processes are managed by the hub and executed across the necessary blockchains.

Cross-Chain Processes

• Unlocking and Moving Funds: A critical capability of our architecture is the ability to unlock and transfer funds across different blockchains when loans are repaid or liquidated. This requires robust inter-chain communication and transaction signing mechanisms, which are centrally coordinated by the OrdiBank.

This hub and spoke model not only enhances the efficiency of our lending protocol but also ensures that it remains adaptable and secure, capable of integrating further advancements in blockchain technology and expanding to include more assets and operations in the future.