> For the complete documentation index, see [llms.txt](https://gremlix.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://gremlix.gitbook.io/docs/vaults/btc-growth-capital-vault.md).

# BTC Growth Capital Vault

**Vault — Medium Risk | Target APR: 15–25% (BTC-denominated)**

## Overview

The BTC Growth Capital Vault is designed for **Bitcoin holders** who want to earn BTC-denominated yield without selling their BTC exposure. The vault uses a conservative **long-only grid strategy** with a built-in collateral lending layer that generates additional yield from idle capital.

Unlike the [USDC Dual Grid vault](/docs/vaults/usdc-dual-grid-vault.md), this vault is **directionally long on BTC** — it benefits from BTC appreciation while still generating income from price oscillations and lending rates.

## Strategy Mechanics

### Two-Layer Capital Deployment

```
100% BTC Deposited
       │
       └── 100% → Lending Protocol (collateral)
          │                
          └── Borrow stablecoints 10-20% of collateral
                │
                └── 10–20% → Perpetual DEX Grid (long-only)
                        │
                        └── Earns grid spread + DEX points
```

**Layer 1 — Collateral Lending:** BTC is supplied to a lending protocol as collateral. Then borrows some funds. The collateral position also provides a safety buffer — in adverse scenarios, the collateral absorbs drawdowns before the trading capital.

**Layer 2 — Long Grid Trading:** A portion of the capital(borrowed funds 10–20%) is deployed to a Perpetual DEX to execute a **long-only grid** strategy:

* Buy orders placed at intervals below current price
* Sell orders placed at intervals above current price
* Only long positions are opened — no short exposure
* Strategy profits from upward price movements and oscillations

### Simulation

{% embed url="<https://gremlix.xyz/external/btc-dca-chart.html>" %}
Simulation Chart
{% endembed %}

### Yield Sources

| Source           | Description                                   | Est. Contribution  |
| ---------------- | --------------------------------------------- | ------------------ |
| Long grid spread | Buy/sell grid captures on upward oscillations | \~10–15% APR (BTC) |
| DEX Points       | Trading volume → Points → Tokens at TGE       | Bonus              |

## Vault Parameters

| Parameter     | Value                               |
| ------------- | ----------------------------------- |
| Deposit Asset | WBTC (8 decimals)                   |
| Vault Shares  | gBTC (ERC4626)                      |
| Risk Level    | Medium                              |
| Target APR    | 15–25% (BTC-denominated)            |
| Strategy      | Long-only grid + collateral lending |
| Network       | Arbitrum One                        |

## BTC Accumulation

The additional BTC is purchased at progressively lower prices, which improves the long-term cost basis if the position is managed before liquidation.

All yield in this vault is measured in BTC terms. This means:

* If you deposit 1 BTC and earn 20% APR, you receive 1.2 BTC after one year
* The USD value of your position moves with BTC price + the yield
* You are **long BTC** — you benefit from BTC price appreciation on top of yield

This vault is specifically designed for users who already have BTC exposure and want to enhance returns without converting to stablecoins.

## Risk Considerations

This vault carries **Medium** risk due to:

1. **Long-only directional exposure** — In a prolonged BTC bear market, the long grid accumulates losses. The collateral layer provides a buffer but cannot fully offset a sustained downtrend.
2. **Collateral liquidation risk** — If the BTC price drops significantly, the lending collateral position may approach liquidation thresholds. The protocol monitors this and deleverages if necessary.
3. **Grid range risk** — If price moves outside the configured grid range, the strategy pauses until the range is adjusted.
4. **Lower but more consistent returns** — Compared to the [USDC Dual Grid Vault](/docs/vaults/usdc-dual-grid-vault.md), returns are lower but more predictable and have a natural hedge via BTC appreciation.

## Expected Performance Profile

```
Market Condition     │ Performance
─────────────────────┼──────────────────────────────
Bull market (up)     │ BEST — grid profits + lending yield + BTC appreciation
Ranging / Sideways   │ GOOD — grid oscillation profits + lending yield
Mild bear market     │ MODERATE — lending yield offsets mild grid losses
Strong bear market   │ POOR — grid losses exceed lending yield, collateral at risk
```

## How to Participate

See [How to Deposit](/docs/quick-start/deposit.md) for step-by-step instructions.