Figment is proud to be working with Echo as an infrastructure operator for the eAPT LST to provide best-in-class validator services for eAPT holders. Read on to learn more about Echo protocol, building at the intersection of the Move ecosystem and BTCfi.
What is Echo Protocol?
Echo is a multi-functional protocol built across the Aptos and Bitcoin ecosystem focused on BTC bridging, APT liquid staking, and DeFi. In addition to enabling BTC holders to bridge from BTC L2s to Aptos, Echo also offers their own money market and Aptos LST (eAPT).
Echo Architecture
At the heart of Echo Protocol is the Echo Bridge, which supports the bi-directional transfer of BTC between B2 network and Aptos. The bridge relies on a mint/burn mechanism to lock uBTC on B2 and issue aBTC (Echo’s bridged representation of uBTC) on Aptos. When aBTC is sent back to B2, the aBTC is burnt and a corresponding amount of uBTC is released back on B2.
Bridging through Echo
To bridge BTC to Aptos using the Echo bridge, a user first needs uBTC on B2 Network BTC L2. Once a user mints uBTC through Unirouter, they can then deposit it to the Echo Bridge on B2. After the bridge transaction has been verified by the appropriate parties, users will receive newly-minted aBTC on Aptos to represent the uBTC they locked on B2.
Echo Bridge Security
Echo’s bridge is secured by two sets of entities, Echo Validators and Submitters. The Validator Group continuously monitors and verifies deposit and withdrawal events before forwarding them along to the Submitter Group. Submitters collect validator signatures and submit fully verified transactions to the destination chain for the bridged assets, authorizing either the minting of aBTC or the release of uBTC.
Submitters are also responsible for ensuring that any validator that acts maliciously (e.g., by submitting an invalid deposit) is penalized by being removed from the participating validator set. In the future, Echo plans to require validators to post a slashable bond in the form of APT to provide even stronger economic disincentives for submitting invalid deposits to Submitters.
Echo Reward Opportunities
After a user’s funds have arrived on Aptos in the form of aBTC, they’ll be able to use them across Aptos DeFi in any supported applications. Echo’s own lending market, for example, allows users to borrow a variety of assets against their aBTC, including stablecoins and native APT. Reward-focused users may opt to borrow APT against their BTC and liquid stake through eAPT to earn native staking rewards (~7% SRR at the time of writing). Once Echo restaking goes live, eAPT holders will be able to earn additional rewards by opting in to secure Move-VM based AVSs.
Conclusion
At the time of writing, Echo is the third largest protocol on Aptos by TVL. With approximately $250M in aBTC already minted, Echo secures nearly half of Aptos’ total bridged TVL. As Bitcoin sees unprecedented levels of institutional adoption, Echo is preparing a number of new protocol features like restaking and automated DeFi strategies for launch. By providing a secure port of entry for BTC to access Aptos alongside a robust and continually-growing suite of DeFi solutions, Echo is unlocking a growing set of opportunities for BTC holders and Aptos users alike.
About Figment
Figment is the leading provider of staking infrastructure. Figment provides the complete staking solution for over 700 institutional clients, including asset managers, exchanges, wallets, foundations, custodians, and large token holders, to earn rewards on their digital assets. Institutional staking services from Figment include seamless point-and-click staking, portfolio reward tracking, API integrations, audited infrastructure, and slashing protection. This all leads Figment’s mission to support the adoption, growth, and long-term success of the digital asset ecosystem. Meet with us to learn more.