User Staking Flow

1. Bitcoin Network

   • User sends BTC with timelock scripts to Bloom multi-sig address: A user starts the process by sending Bitcoin (BTC) to a multi-signature address controlled by Bloom. The transaction includes timelock scripts, ensuring that the BTC cannot be spent until certain conditions are met.

   • BTC amount is locked by the Bitcoin network without moving out of the user's wallet: The Bitcoin network locks the sent amount using the timelock. Importantly, the BTC remains in the user’s wallet, it is just programmatically restricted from being moved.

2. ZK Proof Layer-2 Generator

   • Bloom receives time-locked transaction: The Bloom system acknowledges the receipt of the transaction that has been time-locked.

   • Run through Layer-2 zkProof generator: The transaction details are processed through a zero-knowledge proof (zkProof) generator. This generator is part of Bloom’s Layer-2 solutions, ensuring enhanced transaction privacy and scalability.

   • Generate zkProof: The zero-knowledge proof is generated, verifying the correctness and legitimacy of the transaction without revealing the underlying data or compromising user privacy.

3. Bloom Protocol

   • Mint sBTC based on Proof: Based on the zero-knowledge proof generated in the previous step, Bloom mints synthetic Bitcoin (sBTC). This sBTC is pegged to the value of real BTC but functions within the Bloom ecosystem.

   • User uses sBTC for DeFi activities: The minted sBTC can be used by the user for various decentralized finance (DeFi) activities within the Bloom protocol or broader DeFi ecosystem.

This structured flow ensures that transactions are secure, private, and scalable within the Bloom ecosystem, leveraging both Bitcoin's robustness and advanced cryptographic techniques like zero-knowledge proofs. This methodology not only enhances security but also facilitates broader participation in DeFi activities by allowing Bitcoin holders to engage without moving their BTC from their wallets.