# vBTC Pegging mechanism

vBTC is designed with a fixed peg ratio of **1 BTC = 10⁸ vBTC**, ensuring that each unit of vBTC precisely reflects the value of one satoshi. This mechanism maintains price stability and consistency across the entire system.

When users mint vBTC, the deposited assets are swapped into BTCB through DEX protocols such as PancakeSwap or Uniswap. The resulting BTCB is then stored in a smart contract and serves as collateral. Based on the recorded BTCB amount and the fixed peg ratio, the system issues the corresponding amount of vBTC and transfers it directly to the user’s wallet.

Conversely, during the redemption process, users return vBTC to receive an equivalent amount of BTCB at the fixed rate of **1 BTC = 10⁸ vBTC** from the collateral pool. Once the BTCB is transferred to the user's wallet, the submitted vBTC is permanently burned to ensure a transparent and strictly controlled circulating supply.


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