U2 Stablecoin (BTC-Collateralized Settlement Layer)
Overview
U2 is the native stablecoin of B² Network, designed as a BTC-collateralized, AI-native settlement asset. It bridges the gap between Bitcoin’s role as a volatile reserve currency and the need for stable, predictable pricing in AI-driven and DeFi economies. U2 enables AI Agents, miners, and users to transact, collaborate, and settle with a consistent unit of account while maintaining Bitcoin exposure.
Design Principles
BTC as Collateral: Every U2 is minted against over-collateralized Bitcoin, ensuring trustless solvency.
Stability via Hedging: Delta-neutral strategies (futures, perpetual swaps, basis trades) offset BTC volatility while preserving yield.
AI-Native: Built for high-frequency, machine-to-machine (M2M) micropayments required by autonomous agents.
Transparent & Verifiable: Collateral reserves and hedging operations are fully auditable on-chain, with anchoring into Bitcoin mainnet.
Minting & Redemption
Minting
Users or AI Agents deposit BTC into the protocol vault.
U2 is minted at a collateral ratio ≥150% to ensure system safety.
Redemption
U2 can be burned to redeem locked BTC at any time.
Automated liquidation mechanisms protect solvency during BTC price drawdowns.
Dual Pathways
Classic Mint: Conservative, fully backed by BTC reserves, 1:1 collateral.
Innovative Mint: BTC + derivative hedges expand U2 supply while maintaining peg stability.
Stability Mechanisms
Over-Collateralization: Ensures solvency and resilience during market stress.
Delta-Neutral Hedging: Offsets BTC volatility with market-neutral derivative strategies.
Funding Rate Arbitrage: Captures yield from perpetual swap markets, distributing income to U2 stakers and the ecosystem.
Automated Liquidations: Protect against under-collateralization, maintaining peg and system integrity.
Technical Features
BTC-Denominated Collateral: Reinforces Bitcoin’s role as the ultimate reserve asset.
Cross-Layer Anchoring: Collateral proofs and hedging records anchored periodically to Bitcoin via Taproot inscriptions.
Integration with AI Signal: AI Agents can hold and transact in U2 as their stable settlement asset, while still holding BTC as reserve capital.
Developer APIs: Enables dApp builders to integrate U2 into DeFi protocols, agent marketplaces, and cross-chain applications.
Use Cases
AI Agents:
Settle micro-tasks, data exchange, or inference services with predictable pricing.
Engage in multi-agent collaboration without BTC volatility risk.
BTC Holders:
Unlock liquidity by minting U2 against BTC while retaining BTC price exposure.
Earn BTC-native yield from hedging and arbitrage strategies.
Miners:
Collateralize future hashrate or block rewards to mint U2.
Access immediate liquidity without selling mined BTC.
DeFi & Traders:
Use U2 as a stable unit of account in lending, AMMs, and derivatives.
Perform arbitrage or structured strategies with BTC as reserve and U2 as settlement currency.
Role in B² Network
U2 is the settlement backbone of the Bitcoin + AI economy:
Provides price stability for agents and users.
Links BTC’s reserve value with AI’s transactional demands.
Enables the closed economic loop: BTC → Collateral → U2 → AI Agents → Settlement → back to BTC.
In summary: U2 transforms Bitcoin from a passive “digital gold” into an active settlement medium — making the vision of “Put Bitcoin in Every AI’s Wallet” a practical reality.
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