Atomic Bonded Cross-chain Debt

Abstract

Inspired by the recent boom in decentralized finance (DeFi) and the unprecedented success of flash loan projects in this ecosystem, we introduce a decentralized debt derivative named atomic bonded cross-chain debt (ABCD) to bridge the gap between the growth of lending protocols on Ethereum and other UTXO-based blockchains specifically Bitcoin. We think of ABCD as the alphabet of interoperability for DeFi and as a credit infrastructure which unlike the current protocols is not limited by requiring either smart contracts, over-collateralization, or instantaneous payback.