Introduction

What is OXO Protocol?

OXO is a Layer-1.5 protocol that transforms Bitcoin from a passive store of value into a productive, yield-generating asset — without giving up custody, without lock-ups, and without trust assumptions.

Users bridge their BTC into the OXO ecosystem, put it to work across a suite of DeFi primitives, and exit back to real BTC on the Bitcoin network whenever they choose. The exit is always open.

Currently in testnet. OXO Protocol is live on Sepolia with all core modules operational. Mainnet launch follows a third-party audit.

Core Modules

  • oxoBTC — Bitcoin-backed ERC-20 token, minted 1:1 on verified BTC deposits. Fully collateralized at all times.
  • Bridge — Cryptographically secured two-way bridge between Bitcoin and the OXO smart contract layer.
  • Swap — On-chain token swaps with slippage protection. Trade oxoBTC ↔ ETH and more.
  • Staking — Stake oxoBTC or OXO to earn protocol yield. Dual-pool system, no lockup beyond a 3-day cooldown.
  • Lending — Use oxoBTC as collateral to borrow ETH. Keep your BTC exposure while unlocking liquidity.
  • Flash Exit — Atomic single-transaction exit: ETH → oxoBTC → BTC. Out in one move.
  • ZK Rollup — Low-cost L2 transfers for oxoBTC, settled on-chain with zero-knowledge proofs.
Vision

Bitcoin should work for you

Over 19 million Bitcoin sit in cold wallets, earning nothing. The prevailing advice is to "just hold." OXO disagrees.

We believe Bitcoin holders should be able to participate in DeFi — earning real yield, accessing liquidity, transacting cheaply — without ever converting to a different asset or trusting a centralized intermediary with their keys.

OXO's L1.5 architecture sits between Bitcoin's settlement layer and Ethereum's programmability layer. It inherits Bitcoin's security model while unlocking the full composability of EVM smart contracts.

OXO does not take custody of your Bitcoin. The bridge is cryptographically enforced — deposits are verified on-chain before oxoBTC is minted, and redeems are provably authorized before BTC is released.
Protocol

Bridge

The OXO Bridge is the entry and exit point of the protocol. It converts BTC to oxoBTC (deposit) and oxoBTC back to BTC (redeem), with every step cryptographically verified on-chain.

BTC → oxoBTC

01

Register

Link your Bitcoin address to your Ethereum wallet. This pairing is stored off-chain and used to route your deposit.

02

Deposit

Send BTC to the protocol's deposit address. After 1 on-chain confirmation, the relayer picks up your transaction.

03

Mint

The relayer submits a cryptographically signed mint call on-chain. oxoBTC arrives in your wallet at 1:1 parity. The deposit ID is permanently marked as used — replay protection is enforced at the contract level.

oxoBTC → BTC

01

Burn

Submit a redeem request on-chain. Your oxoBTC is burned immediately and irreversibly.

02

Release

The relayer detects the event, sends BTC to your Bitcoin address, and marks the redeem as completed on-chain.

A 0.1% bridge fee is applied on deposits and redeems. Fees are distributed to stakers and the protocol treasury — no fee goes to a central team wallet.
Protocol

Earn

Once inside the OXO ecosystem, your oxoBTC can be deployed across three yield-generating primitives.

Staking

Stake oxoBTC to earn OXO token emissions. Stake OXO to earn a share of protocol fees — paid in ETH and oxoBTC. Withdrawals have a 3-day cooldown; there are no lockup periods beyond that.

Pool A
oxoBTC
Earn OXO emissions
Pool B
OXO
Earn ETH + oxoBTC fees
Cooldown
3 days
After unstake request

Lending

Deposit oxoBTC as collateral to borrow ETH — up to 70% of your collateral value. Your BTC position stays intact and continues appreciating. Repay anytime; liquidation only occurs if your position falls below 80% LTV.

Max LTV
70%
Borrow up to 70% of collateral value
Liquidation
80%
Threshold before liquidation
Interest
5% APR
Simple per-block accrual

Liquidity Pools

Provide liquidity to oxoBTC/ETH trading pairs and earn a share of swap fees. LP positions can be added or removed at any time with no lockup.

Protocol

Exit

The exit is always yours. OXO is designed so that the path back to Bitcoin is always open — no permissions required, no committee approval, no waiting period beyond standard bridge confirmation.

Standard Redeem

Hold oxoBTC and want BTC back? Submit a redeem. oxoBTC is burned on-chain, BTC is sent to your Bitcoin address. Cryptographically enforced end-to-end.

Flash Exit

Don't have oxoBTC but want to exit to BTC? Flash Exit lets you go from ETH → oxoBTC → BTC in a single transaction. The protocol handles the swap and bridge atomically. For large amounts, the exit is chunked intelligently to minimize slippage.

Exit fee: 0.1% — the same as a deposit. There are no withdrawal penalties, no exit taxes, no protocol-imposed delays.
Technology

L1.5 Architecture

OXO is neither a simple bridge nor a traditional L2. It is a purpose-built coordination layer between Bitcoin's settlement security and Ethereum's programmability — hence "Layer 1.5."

  • Bitcoin Layer — BTC deposits and redemptions settle on the Bitcoin network. OXO monitors the Bitcoin mempool in real-time and requires on-chain confirmation before minting.
  • OXO Smart Contract Layer (EVM) — All protocol logic — swaps, staking, lending, flash exit — runs on audited EVM smart contracts. Users interact directly with contracts; no intermediary holds funds.
  • ZK Rollup (L2) — High-throughput, low-cost transfers are processed off-chain and settled on-chain via zero-knowledge proofs.
The L1.5 model means users always have a cryptographically verifiable claim on their Bitcoin. oxoBTC is not an IOU — it is a programmable representation of BTC that can be redeemed at any time by the holder.
Technology

ZK Rollup

OXO's rollup layer enables fast, cheap oxoBTC transfers without L1 gas costs for every transaction. Batches of transfers are processed by the sequencer and settled on Ethereum with a single cryptographic proof.

How it works

01

Deposit to L2

Send oxoBTC to the rollup contract. The sequencer credits your L2 balance.

02

Transfer on L2

Send oxoBTC instantly to any L2 address. Transfers are batched by the sequencer at low cost.

03

Settle on L1

The sequencer submits a Groth16 zero-knowledge proof to Ethereum. The L1 contract verifies the proof and updates the state root — trustlessly.

04

Withdraw to L1

Request a withdrawal from L2. After proof verification, oxoBTC is released back to your L1 wallet.

Security

Security Model

OXO is built with a security-first design. Every critical operation is cryptographically enforced — no administrative override can bypass the on-chain rules.

Core Guarantees

  • No double-minting — Each BTC deposit ID can only produce one mint. Replay protection is enforced at the contract level, permanently.
  • Collateral ratio — oxoBTC supply can never exceed the BTC held in custody. A hard supply cap enforced in the bridge contract.
  • Non-custodial — User funds in staking, lending, and pools are held by the smart contracts, not by any team or relayer.
  • Pausable in emergency — Bridge, Lending, and Staking can be paused by the admin in the event of a critical vulnerability, without affecting user balances.
  • Price oracle manipulation protection — Chainlink price feeds with deviation checks guard against flash-loan-based oracle attacks in the lending module.

Audit Status

OXO Protocol is currently on testnet. A formal third-party security audit is planned before mainnet launch. We are targeting Code4rena for a public competitive audit with a $15K+ reward pool. All 100 unit tests pass on Sepolia.

Open Stack

  • Smart contracts — Solidity 0.8.24, OpenZeppelin v5 (AccessControl, Pausable, SafeERC20)
  • Price feeds — Chainlink BTC/USD and ETH/USD data feeds
  • ZK proofs — Groth16 proof system via circom v2 + snarkjs
  • Bridge cryptography — ECDSA with EIP-191 prefix, verified fully on-chain

Ready to be early?

Join the waitlist. Be among the first to access OXO when we launch.

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