Introduction

What is OXO Protocol?

OXO is a Layer-1.5 protocol that brings BTC-backed liquidity into EVM DeFi through oxoBTC, a 1:1 BTC-backed ERC-20 representation. L1.5 is OXO's internal architecture term for coordinating Bitcoin-backed liquidity with EVM execution.

Phase 1 uses a relayer + 3-of-5 multisig bridge custody model. Users self-custody oxoBTC on EVM; BTC reserves are managed by the bridge custody design.

Early access / pre-public testnet. OXO Protocol is an audit-candidate system built in public. Sepolia components may exist for internal review, and public participation opens later through the waitlist. Mainnet follows public testnet, third-party audit, final ZK/security review, and deployment validation.

Core Modules

  • oxoBTC — Bitcoin-backed ERC-20 representation, minted 1:1 after signer-attested BTC deposits.
  • Bridge — Phase 1 relayer + 3-of-5 multisig bridge with replay-protected deposit minting.
  • Swap — On-chain token swaps with slippage protection. Trade oxoBTC ↔ ETH and more.
  • Staking — Stake oxoBTC or OXO to earn configured rewards and protocol fee distributions. 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 — ETH to oxoBTC swap plus bridge redeem request; final BTC release is completed by the Phase 1 relayer.
  • ZK Rollup — Testnet rollup component under active development; production ZK security requires final circuits, proving keys, generated verifier, and public input binding.
Vision

Bitcoin should work for you

A large share of Bitcoin sits idle in wallets, earning nothing. The prevailing advice is to "just hold." OXO disagrees.

We believe Bitcoin holders should be able to participate in DeFi — earning protocol rewards, accessing liquidity, and transacting cheaply — while understanding the explicit custody and relayer assumptions in Phase 1.

OXO's L1.5 architecture sits between Bitcoin's settlement layer and Ethereum's programmability layer. It connects BTC-backed liquidity to EVM smart contracts without claiming to inherit Bitcoin security directly.

Phase 1 BTC reserves are managed by a relayer + 3-of-5 multisig bridge custody design. Deposit minting is signer-attested and replay-protected. Later roadmap phases may reduce custody assumptions.
Protocol

Bridge

The OXO Bridge is the entry and redeem path of the protocol. It converts BTC to oxoBTC through signer-attested deposits and records oxoBTC redeem requests for relayer-completed BTC settlement.

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 the configured confirmation count, the relayer picks up your transaction.

03

Mint

The relayer submits a 3-of-5 signer-attested 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 while the redeem request is recorded; timeout/cancel protection can remint if processing gets stuck.

02

Release

The relayer detects the event, broadcasts the BTC transaction, stores the BTC tx hash, and marks the redeem as completed on-chain.

A 0.1% bridge fee applies to configured deposit/mint flows and routes to the Protocol Treasury. Redemption fee design remains future roadmap work.
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 exposure remains represented through oxoBTC while you access liquidity. 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

OXO provides an on-chain redeem request path back to BTC. In Phase 1, completion depends on the bridge relayer, and timeout/cancel protection helps prevent users from being stuck if processing fails.

Standard Redeem

Hold oxoBTC and want BTC back? Submit a redeem request. oxoBTC is burned on-chain, the relayer completes BTC settlement, and stuck requests can be cancelled after timeout if not completed.

Flash Exit

Don't have oxoBTC but want to start a BTC exit flow? Flash Exit swaps ETH into oxoBTC and creates a bridge redeem request. Final BTC release is completed by the Phase 1 bridge relayer. For large amounts, orders can be chunked to manage slippage.

FlashExit fee: 0.1% applies to configured FlashExit flows. Redemption fee design remains future roadmap work.
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) — Protocol logic — swaps, staking, lending, flash exit — runs on EVM smart contracts that are audit candidates. Users interact directly with contracts for EVM-side assets.
  • ZK Rollup (L2) — Testnet rollup work is separated from production deployment paths until real circuit and verifier work is complete.
oxoBTC is a programmable 1:1 BTC-backed ERC-20 representation. Redemption in Phase 1 depends on the bridge custody and relayer design, with on-chain timeout/cancel protection for stuck requests.
Technology

ZK Rollup

OXO's rollup layer is under active testnet development. Production-grade ZK security requires final circuits, proving keys, generated verifier deployment, and public input binding before it should secure real value.

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 production path is intended to submit generated verifier proofs to Ethereum. Current test/dev deployments separate mock verification from production configuration.

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, while Phase 1 still includes explicit relayer, signer, custody, and admin assumptions that must be reviewed before mainnet.

Core Guarantees

  • No double-minting — Each BTC deposit ID can only produce one mint. Replay protection is enforced at the contract level, permanently.
  • Supply and reserve monitoring — oxoBTC minting is contract-gated, while reserve correctness also depends on bridge custody operations and off-chain reserve monitoring.
  • EVM-side self-custody — User funds in staking, lending, and pools are held by smart contracts; BTC reserves are managed by the bridge custody design.
  • 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 in early access / pre-public testnet preparation. A formal third-party security audit, final ZK circuit review, and production deployment validation are required before mainnet launch.

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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