> For the complete documentation index, see [llms.txt](https://docs.btcd.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.btcd.fi/faqs.md).

# FAQs

#### How is BTCD different from a stablecoin?

BTCD is not a stablecoin. It is a collateralized token whose peg moves with BTC price — but at half the volatility of holding BTC outright. Think of it as a continuously-rebalanced 50/50 BTC/USD portfolio in token form.

#### How is BTCD different from Yield Basis?

Yield Basis (and ybBTC) is a leveraged BTC-LP product: holders get BTC-like exposure plus LP fees, but bear TRD risk. BTCD targets a different exposure (50/50, not 100% BTC) and absorbs TRD at the portfolio level while the bdBTC Vault targets BTC exposure. The two protocols are complementary: the BTCD Portfolio holds ybBTC as a yield source for sBTCD.

#### Why is there a 7-day cooldown on sBTCD?

The cooldown protects the protocol from sudden mass redemptions that could force the portfolio to liquidate yield-bearing positions at unfavorable prices. It is a stability mechanism that ultimately benefits all stakers. Users who need instant liquidity can hold BTCD directly (which is instantly redeemable) or use secondary markets.

#### What yield can I expect on sBTCD?

Target sBTCD yield depends on prevailing yields in the underlying assets (sUSDS, sUSDe, ybBTC, GM pool fees) and on portfolio rebalancing P\&L, which scales with realized variance. We do not publish a fixed APR target. A live yield dashboard is available at btcd.fi

#### What does "omega" mean and why do you keep using it?

Omega ($$\omega$$) is the elasticity of an asset's value with respect to BTC price. It is the cleanest single number for describing how much BTC exposure something has: $$\omega=0$$  is pure USD, $$\omega=1$$ is pure BTC, $$\omega=0.5$$ is the BTCD peg. It is additive across portfolios, which makes it the natural language for hedging decisions.

#### Can I lose money holding BTCD?

Yes. BTCD's value moves with BTC price (at roughly half volatility). If BTC falls, BTCD will fall — by less than BTC, but it will fall. BTCD is not a USD-stable instrument.

#### Is BTCD safe to use as collateral?

BTCD has properties that make it mechanically well-suited to lending collateral: instant redemption to USDC and a predictable price relationship to BTC. Whether any specific lending market is safe depends on the parameters of that market — LTV, liquidation incentives, oracle quality. Users should evaluate each integration on its own merits.

#### How does Bitcoin Dollar make money on rebalancing?

The portfolio's rebalancing trades are economically equivalent to the assignment leg of a short strangle: the portfolio sells BTC into rallies and buys BTC into drawdowns. These trades earn premium on average (by the same logic that makes covered-call and cash-secured-put strategies profitable). The LVR that an unhedged 50/50 LP would pay to arbitrageurs is, in the BTCD Portfolio, captured as protocol revenue. Internal RFQ matching with the Vaults amplifies this further by eliminating execution friction on a meaningful share of rebalances.

#### Is this audited?

Audit status: in progress. Final reports and remediation status will be linked in Section 10 prior to launch.