Trustless Two-Way Peg

zBTC represents an intrinsic Solana asset, maintaining a one-to-one peg with Bitcoin and functioning through a trustless and decentralized 2-Way Peg (2WP) mechanism. Our technical design decisions for zBTC involve the incorporation of a sidechain utilizing Simplified Payment Verification (SPV) and a decentralized group facilitated by the Zeus Network, a composable consensus solution.

Within the sidechain, SPV is employed, with verifiers and the decentralized group collaboratively forming a multi-signature consortium to authenticate transactions related to the locking and unlocking of assets. The subsequent section provides an explanation of the SPV implementation on the Solana Virtual Machine (SVM).

A comparison between a federated and decentralized notary system is presented, highlighting the absence of staking prerequisites in the former and proposing a long-term transition of Zeus towards a permissionless and decentralized group. Consequently, a decentralized approach akin to the methodology employed for sBTC is recommended. Furthermore, the security integrity of Apollo's 2WP is assured by Zeus verifiers, encompassing transaction signers for both the 2WP and DeFi liquidity management.

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