Circuit Protocol
A decentralized finance protocol on Chia blockchain. Mint Bytecash—a dollar-pegged stablecoin—using your TXCH as collateral, or deposit Bytecash to earn sustainable yield from protocol revenues.
Secured & Verified By
We partner with the most respected security firms in the industry. Zellic, Cantina, and Immunefi specialize in DeFi security and have audited major protocols including MakerDAO, Aave, and Uniswap.
Risk Note: The Chia DeFi ecosystem is evolving. While the blockchain is established, this is one of the first protocols of this scale built on Chialisp and its unique Coin Set architecture. Inherent risks may exist despite comprehensive audits. Please proceed with caution.
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Proven CDP Architecture
Circuit's self-balancing economic model aligns incentives between borrowers and savers to maintain stability without centralized control. It implements the proven CDP model pioneered by MakerDAO.
We've adapted this battle-tested approach to Chia's smart coin architecture for enhanced security and efficiency.
Mint & Create Supply
Deposit TXCH into a vault to mint new BYC. This process expands the stablecoin supply.
You retain full ownership of your collateral while paying a variable Stability Fee on the generated debt.
Lock & Earn Yield
Deposit BYC into the Savings contract. This removes it from circulation, creating demand that strengthens the dollar peg.
The protocol rewards this stabilizing action by distributing borrower fees to you as continuous yield.
Understanding Overcollateralization
Collateralized Debt Positions (CDPs) are self-contained smart coins that hold your collateral and track your debt. Each vault is independent and isolated, meaning issues with one vault don't affect others.
The % collateralization requirement means every dollar of BYC is backed by $NaN of TXCH. This overcollateralization serves two critical purposes: it absorbs price volatility to protect the protocol, and it ensures liquidations are profitable for third-party liquidators.
When a vault's collateral value drops near the minimum ratio, liquidators can step in to repay the debt and claim the collateral at a discount. This profit incentive ensures liquidations happen quickly and automatically, keeping the protocol healthy without relying on any centralized authority. This proven mechanism has protected billions in value across CDP-based protocols since 2017.
Protocol in Action
Real-world examples of how you can utilize Circuit Protocol to unlock liquidity or earn passive yield.
Alice the Trader
Leveraged Long Position
Alice holds 100 TXCH and believes the price will increase. She uses the protocol to amplify her position.
- Deposits 100 TXCH into a Vault
- Mints 2,000 BYC stablecoin
- Swaps BYC for more TXCH
- Result: 100 TXCH + additional exposure
Bob the Saver
Wants stable yield on assets
Bob has $5,000 in stablecoins and wants to earn a return better than traditional finance without taking volatile asset risk.
- Deposits 5,000 BYC into Savings
- Earns N/A% APY continuously
- Result: Withdraw principal + interest anytime
Charlie the Keeper
Arbitrage & Protocol Health
Charlie runs a bot that monitors vaults. When a vault becomes undercollateralized, he liquidates it to earn a profit while securing the protocol.
- Monitors Vault Health
- Repays debt for risky vaults
- Receives discounted collateral
- Result: Profit from discounted collateral
Dana the Arbitrageur
Peg Maintenance & Profit
Dana profits from price deviations. When BYC trades below $1, she buys it at a discount. When above $1, she mints and sells, keeping the peg stable.
- Monitors BYC price peg
- Buys BYC when < $1.00
- Mints & sells when > $1.00
- Result: Risk-free spread profit
Where Yield Comes From
Circuit's yield is sustainable and transparent—it comes directly from stability fees paid by borrowers. No external incentives, token emissions, or unsustainable mechanisms.
Why Chia Blockchain
Circuit is built on Chia's enterprise-grade blockchain infrastructure, designed for compliance, security, and institutional adoption.
Highly Decentralized
Chia's upcoming Proof of Space upgrade will push the Nakamoto coefficient above 120—making it one of the most decentralized blockchains. This extreme decentralization provides unmatched censorship resistance and security, making Chia ideal for DeFi applications that require trust-minimized infrastructure.
Compliance Ready
Chia Network is committed to regulatory compliance with plans to become a public reporting company. This institutional approach provides confidence for long-term protocol development.
Advanced Coin Model
Chia's coinset model (similar to UTXO) enables sophisticated DeFi primitives with built-in safety guarantees. This architecture supports extremely fast lightning networks and state channels, enabling scalable Layer 2 solutions while maintaining the security of the base layer.
Common Questions
How does Circuit compare to MakerDAO?
Circuit implements the same proven CDP model that MakerDAO pioneered. The core mechanics are identical—overcollateralized vaults, stability fees, and decentralized liquidations. We've adapted this battle-tested design to Chia's smart coin architecture for enhanced security and efficiency.
What happens during liquidation?
If your vault's collateral ratio drops below %, anyone can liquidate it by repaying your debt and claiming your collateral at a discount. This incentivizes quick liquidations to keep the protocol healthy. You should maintain a buffer above the minimum ratio to avoid liquidation during market volatility.
Can BYC lose its dollar peg?
BYC maintains its peg through overcollateralization and arbitrage opportunities. If BYC trades below $1, arbitrageurs can profit by buying cheap BYC and repaying their vaults. If above $1, users are incentivized to mint more BYC. This mechanism has kept DAI stable since 2017, managing billions in collateral through multiple market cycles.
Who controls the protocol?
Circuit is a decentralized, immutable protocol. The core smart coins governing vaults and the treasury are unchangeable, meaning no one—not even the team or governance—has access to user funds or the treasury. Governance power is limited to updating core parameters (Statutes) and the oracle implementation, allowing the protocol to adapt to market conditions without compromising fund security.
What are the risks of depositing BYC?
As a liquidity provider, your main risks are: smart coin bugs (mitigated by audits), protocol governance changes, and temporary illiquidity if borrowing demand is very high. Your BYC deposits are not at risk from individual vault liquidations—each vault is isolated and overcollateralized.
Can I withdraw my deposited BYC anytime?
Yes, you can withdraw your BYC plus earned interest at any time with no lock-up periods or fees. Withdrawals are subject to available liquidity—if utilization is very high, you may need to wait for borrowers to repay debt or for new deposits.
How do I avoid liquidation?
Monitor your vault's collateralization ratio and maintain a buffer above the % minimum. During volatile markets, consider adding more collateral or repaying some debt. You can also borrow less than the maximum 66% LTV to give yourself more cushion against price swings.
How can I run my own backend API?
Currently, the protocol can only be accessed via our official API endpoint (testnet-api.circuitdao.com/docs). However, we will publish the source code for a self-hosted backend API (including drivers/RPC) soon after mainnet launch, allowing advanced users to run their own infrastructure.
Testnet Status
Circuit is currently on Chia testnet for final testing and community feedback before mainnet launch. Testnet assets have no real value. We're following a thorough launch process, including multiple audits and extensive testing, to ensure protocol safety when we go live.
