Hemi
Hemi Network is a modular Layer-2 (L2) protocol that unifies Bitcoin and Ethereum making them interoperable. Their goal is to bring the best of both worlds so that developers can leverage the chains to build on top. It enables Bitcoin on the network to be able to participate in DeFi on Hemi natively without any wrapping.
Core Components of Hemi Network:
Hemi Virtual Machine: An Ethereum Virtual Machine (EVM) that incorporates a full Bitcoin node, enabling smart contracts to access and react to Bitcoin's state directly. To expose Bitcoin data to smart contracts, hVM introduces a number of new precompile contracts accessible in the EVM which fetch the latest data from the Processed Bitcoin View
Hemi Bitcoin Kit: The Hemi Bitcoin Kit (hBK) is a set of smart contracts designed to bridge the Ethereum and Bitcoin blockchains, enabling developers to build Bitcoin-aware dApps on an EVM with full access to Ethereum assets and the cross-chain data calls that ETH L2s provide
Tunnels: Tunnels allow for sophisticated, noncustodial bidirectional asset transfers between networks, such as Bitcoin and Ethereum. Unlike traditional bridges, tunnels within the Hemi Network maintain state awareness of both networks at the protocol level.
Proof-of-Proof (PoP) Consensus: Proof-of-Proof (PoP) allows Hemi to inherit the solid Proof-of-Work (PoW) security of Bitcoin. To achieve this, Hemi deploys specialized miners, referred to as PoP Miners. These miners are responsible for:
Gathering crucial network details and publishing them on Bitcoin's blockchain, thereby linking Hemi's security directly to Bitcoin's proven system.
Employing sophisticated algorithms to generate proofs that are vital for the network's security.
Ensuring Hemi's network integrity by leveraging Bitcoin's security, providing a dual layer of protection.
What is Raga doing on Hemi Network?
As Hemi enables Bitcoin DeFi, many different protocols will start building on Hemi like:
Layerbank is a lending platform that enables users to lend and borrow assets like BTC, ETH, and USDC in an overcollaterized manner.
Spectra is a decentralized finance (DeFi) protocol that enables users to tokenize and trade future yields from yield-bearing assets. By separating the ownership of an asset from its yield, Spectra allows for more flexible and strategic yield management
To enable best yield on their BTC assets, Raga ia enabling looping strategies. What is looping?
Users select an asset they want to supply to Spectra and get the PT token for the same.
Raga will take a loan against the PT token too get the base asset and get the PT token for the same.
Raga repeats this process several time depending on the risk appetite for the user
This strategy only works when %age yield on spectra > loan interest on Layerbank
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