Understanding Bound in One Article: The "Multi-signature + Timelock" Escape Mechanism and the Off-Chain Matching Black Box
**Title**: Understanding Bound: The Escape Mechanism of "Multi-Sig + Time Lock" and the Off-Chain Matching Black Box
**Summary**:
Bound Exchange, evolved from the earlier radFi platform, introduces a novel approach to Bitcoin trading by combining self-custody security with exchange-like speed. Its core mechanism relies on a 2-of-2 multi-signature (multi-sig) address for user deposits. One private key is held by the user via a passkey, and the other is held by Bound. This setup requires both keys to sign any transaction, preventing Bound from unilaterally accessing user funds (non-custodial). To address the risk of Bound becoming unavailable, a 3-month timelock is integrated into the Bitcoin script. After this period, users can withdraw their assets with just their single signature, ensuring an escape hatch.
For trading, Bound operates a concentrated liquidity AMM. However, as Bitcoin L1 lacks smart contracts, the AMM curve, liquidity management, and trade price calculations occur off-chain in Bound's backend database. On-chain Bitcoin transactions serve only as final settlement receipts for pre-determined amounts. This creates a centralization point: the critical sequence of trade execution—which determines the exact price along the curve for each order—is managed off-chain by Bound in a non-transparent "black box." While the 2-of-2 setup protects user本金 (principal), the pricing and ordering of trades introduce potential operational MEV risks, as the order processing is invisible and unverifiable on-chain.
In practice, users can also connect external wallets (like Unisat) for fully self-custodied trading, but this requires manually signing every transaction. The platform currently supports deposits of BTC and Runes only.
marsbit05/25 09:11
