> ## Documentation Index
> Fetch the complete documentation index at: https://docs.aarc.xyz/llms.txt
> Use this file to discover all available pages before exploring further.

# iBTCY vs BTCY

> Understanding the two-token architecture for regulated access and DeFi composability

BTCY operates as a two-token system. Understanding when to use each token is essential for investors and developers.

<img src="https://mintcdn.com/aarc-a7fdfaac/tKSYVKaDnkvx29vB/images/token-architecture.svg?fit=max&auto=format&n=tKSYVKaDnkvx29vB&q=85&s=5bb3862a498213defe4d59234a00d1a0" alt="Token Architecture" width="800" height="200" data-path="images/token-architecture.svg" />

## Token Comparison

| Feature                   | iBTCY                  | BTCY                |
| ------------------------- | ---------------------- | ------------------- |
| **Token Standard**        | ERC-20                 | ERC-4626            |
| **Transfer Restrictions** | Whitelist required     | Permissionless      |
| **KYC Required**          | Yes, for all holders   | Only for unwrapping |
| **DeFi Composable**       | Limited                | Full                |
| **Admin Freeze**          | Yes (for compliance)   | No                  |
| **Represents**            | Direct debt obligation | Wrapped iBTCY (1:1) |

<Info>
  Both tokens reference the same economic exposure. BTCY is designed to be backed by iBTCY in the ERC-4626 vault; the share-to-asset rate follows standard ERC-4626 mechanics and may be read via `convertToAssets()`. Secondary market prices can diverge from NAV.
</Info>

## iBTCY: Primary Token

iBTCY is the primary token representing your position in the BTCY product.

**Characteristics:**

* Issued by SD Global Capital Limited (BVI)
* Holders are unsecured creditors of the issuer
* Transfer-restricted to KYC-verified, whitelisted wallets
* Can be wrapped into BTCY at any time (1:1)
* Required for direct redemption to BTC

**Use iBTCY when:**

* You want direct exposure without DeFi interaction
* You prefer holding the primary regulated instrument
* You need to redeem directly for BTC

## BTCY: DeFi Vault

BTCY is an ERC-4626 vault token that wraps iBTCY, enabling permissionless DeFi composability.

Until unwrapped, a BTCY holder’s economic rights are implemented through the vault asset (iBTCY) and the issuer’s arrangements described in the Subscription Agreement.

**Characteristics:**

* 1:1 backed by iBTCY held in the vault contract
* Permissionless transfers (no whitelist required)
* Can be used as collateral, in liquidity pools, or for yield strategies
* Unwrapping to iBTCY requires KYC verification

**Use BTCY when:**

* Using as collateral on lending protocols (Morpho, Euler)
* Providing liquidity on DEXs (Curve)
* Accessing yield derivatives (Pendle, Spectra)
* Trading on secondary markets

## Wrapping and Unwrapping

| Operation             | Protocol Fee | Gas Fee   |
| --------------------- | ------------ | --------- |
| Wrap (iBTCY → BTCY)   | None         | User pays |
| Unwrap (BTCY → iBTCY) | None         | User pays |

### Wrap: iBTCY to BTCY

* Available to all iBTCY holders
* Instant execution
* No protocol fee (gas only)
* No minimum amount

### Unwrap: BTCY to iBTCY

* **Requires KYC verification** and whitelisted wallet
* Instant for verified addresses
* No protocol fee (gas only)
* No minimum amount

<Warning>
  If you acquire BTCY on a secondary market without completing KYC, you cannot unwrap to iBTCY or access redemption proceeds. Your only exit is selling BTCY on secondary markets or completing KYC verification.
</Warning>

## Transfer Behavior

| Scenario                           | iBTCY              | BTCY                                                        |
| ---------------------------------- | ------------------ | ----------------------------------------------------------- |
| Transfer to whitelisted wallet     | Allowed            | Allowed                                                     |
| Transfer to non-whitelisted wallet | Blocked            | Allowed                                                     |
| Admin freeze (sanctions)           | Possible           | Not possible                                                |
| Use as collateral                  | Limited            | Full support                                                |
| Liquidation execution              | Requires whitelist | Executes under normal operations (emergency pause possible) |

<Info>
  Under normal operations, BTCY transfers are permissionless. An emergency pause exists for critical security events only; see [Governance](/security/governance).
</Info>

## Redemption Path

To redeem for BTC, you must hold iBTCY:

```
BTCY (if held) → Unwrap to iBTCY (KYC required) → Submit Redemption Request → Receive BTC
```

BTCY holders who cannot complete KYC cannot access redemption proceeds through the issuer.

## Next Steps

<CardGroup cols={2}>
  <Card title="Subscription" icon="arrow-right-to-bracket" href="/investors/subscription">
    How to subscribe and receive iBTCY
  </Card>

  <Card title="BTCY for Developers" icon="code" href="/developers/overview">
    Technical integration guide
  </Card>
</CardGroup>

***

<Note>
  Available only to eligible professional/qualified investors on an invite-only basis, subject to onboarding and compliance approval. For informational purposes only and not investment advice. Not an offer to the public or a solicitation where unlawful. No retail distribution. Not available to US Persons.

  [Disclaimers](/legal/disclaimers) · [Platform and issuer](/legal/platform-legal)
</Note>