Circulation Control

Hot Reserve, Cold Reserve, and Custodian:

Delve into the nuanced management of the 1:1 peg through a flexible Hot / Cold reserve setup. The circulation of zBTC is intricately linked to the Total Value Locked (TVL) of SOL and LSD-SOL, necessitating an on-chain Oracle for BTC/SOL. The Hot Reserve, governed by a CheckLockTimeVerify (CLTV) mechanism, empowers depositors to withdraw funds after a specified lock time, providing flexibility in managing long-term reserves. Conversely, the Cold Reserve, overseen solely by verifiers, remains locked for an extended period.

The implementation of CLTV serves dual purposes of efficiency and security, acting as a safety buffer for APOLLO to adjust or rebalance the circulation of zBTC. Withdrawals from the Hot Reserve are initiated by applicants, facilitating liquidity retrieval. It's noteworthy that liquidity providers in the Cold Reserve receive rewards in $ZEUS, whereas those in the Hot Reserve do not.

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