Bestia_v0

Introducing Bestia: Lido for Real-World Assets (RWAs)

Crypto is becoming the preferred way for investors and institutions outside the US to access US dollars and US assets (RWAs). However, investing in RWAs is fraught with challenges:

1. Illiquidity: Capital is locked up for the duration of the loan, ranging from months to decades.
2. Lack of Standardization: RWAs are represented in various token formats, reducing their composability and the value add for DeFi.

Our Solution: Bestia

Bestia issues LP tokens that function similarly to Liquid Staking Tokens (LSTs), offering exposure to RWA yield while remaining redeemable for stablecoins.

Our Vision

We aim to create a KYC'd network of capital to bootstrap future RWA or lending protocols in DeFi, similar to Eigenlayer's impact on blockchain security. This will enable fintechs worldwide to offer customized, dollar-denominated savings products.

Bestia employs a novel on-chain implementation of swing pricing to protect user funds against “bank runs,” defined as mass liquidation events where users collectively exit the protocol to avoid risk. Swing pricing, implemented as a smoothed exponential curve, applies a discount to the issuance price of shares based on the current cash reserve, eliminating the first-mover advantage during market volatility. This feature, widely adopted in traditional mutual funds, is mandated in both the EU and USA.

Bestia is the first implementation of swing pricing that I know of in DeFi.

For more about swing pricing read Jin et all (2022) https://academic.oup.com/rfs/article/35/1/1/6162183

Bestia_v0 is a proof of concept of an upcoming protocol that will be build in the near future. For this event, I focused entirely on the smart contracts. Bestia is written in solidity and can be deployed to any EVM. All development was done using Foundry.

Bestia is an ERC4626 compliant protocol that accepts user deposits of USDC an issues shares. Deposited USDC can be deposited into any other ERC4626-compliant vault. Right now Bestia targets a single vault, but in future it will be able to interact with an extensive portfolio of assets.

For more on our vision, you can read our draft/wip whitepaper here: https://drive.google.com/file/d/1Frb-EecDWe2Am-K8Gx-a1MIPmbM5xvhm/view?usp=sharing