In the Crypto Assets ecosystem, the game between Decentralization and Centralized Exchange has always been a hot topic. However, many Bitcoin holders, while pursuing decentralization, have to rely on the "pool yield" service provided by Centralized Exchanges. To address this contradiction, BounceBit has proposed an innovative CeDeFi hybrid solution that attempts to strike a balance between decentralization and security.

The core of this solution lies in combining two key elements: compliant custody and on-chain mirroring. In terms of compliant custody, BounceBit chooses to manage Bitcoin through licensed institutions to ensure compliance with regulatory requirements such as KYC/AML. At the same time, on the on-chain mirroring level, equivalent tokens (such as tBTC or bBTC) are minted through smart contracts to facilitate applications in the Decentralized Finance (DeFi) ecosystem.

In practice, user funds are first custodied in Ceffu's MirrorX account, following an international trust model, providing necessary legal certainty for institutional investors. Subsequently, with the help of LayerZero technology, assets are cross-chained to mainstream networks such as Ethereum, Solana, and BSC, allowing the same Bitcoin to participate in liquidity mining and risk hedging activities in a multi-chain environment.

The advantage of this hybrid model is that it can simultaneously meet the needs of institutional investors and ordinary retail investors. For institutional investors, compliant custody provides the necessary legal protection; while for retail investors seeking higher returns, it allows for safe participation in various DeFi activities. In addition, this solution cleverly avoids the security risks that may arise from solely relying on cross-chain bridges, while maintaining the inherent transparency advantages of blockchain.

Overall, BounceBit's CeDeFi solution provides a new approach to addressing the long-standing conflict between decentralization and security in the crypto assets space. By combining the compliance of traditional finance with the innovation of blockchain technology, this solution has the potential to drive the crypto assets ecosystem towards a more mature and diversified direction.