Apollo Custodian

Apollo Custodian

  • Case 1: Allocate with Apollo Custodian

  • Case 2: Allocate without Apollo Custodian

This section is of paramount importance as it delineates strategies to optimize the utility of zBTC within the system. Owned by liquidity providers (LP), zBTC is entrusted to Apollo's custody for efficient management and yield generation. The decision for Apollo to serve as a custodian is driven by enhanced operational efficiency.

LPs have the option to retain possession of their zBTC, albeit without the prospect of yield sharing or rewards. Earning yield is contingent upon two conditions: first, having BTC locked in the cold reserve, and second, ensuring that zBTC is held within Apollo's custody. LPs who choose not to place their zBTC in custody forego rewards and fees, as Apollo cannot generate fees without its utilization.

The deposit and withdrawal flow defaults to storing zBTC in custody as a default. Two distinct scenarios arise:

  • Case 1 involves Apollo as the custodian, enabling LPs to earn yield and facilitating a streamlined one-step withdrawal managed by the program. In situations where liquidity for withdrawal is insufficient, such as when deployed to a lending protocol, withdrawal requests are stored and scheduled on-chain.

  • Conversely, Case 2, without Apollo as the custodian, results in no yield, but LPs retain the option to withdraw zBTC. However, to retrieve native BTC, LPs must repay and burn the zBTC.

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