> For the complete documentation index, see [llms.txt](https://docs.bitdsm.org/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.bitdsm.org/bitdsm.md).

# BitDSM

BitDSM is an open-source protocol that enables liquidity in cold wallets contribute to on-chain financial applications without change in beneficial ownership. It allows Bitcoin Hodl'ers create and redeem in-kind remap on Ethereum, instead of minting an ERC-20 or introducing a bridge.

The protocol introduces *BitcoinPod (BOD),* a smart contract which separates custody of the assets from the validation logic of the app.

This enables:

1. **Validators restake BTC on Ethereum from other Bitcoin staking protocols.** \
   With BTC staked already to other chains, validators can create in-kind remap by setting their unbonding address to a BOD. This allows for either restaking to Eigenlayer AVSs or leveraging Bitcoin liquidity in financial applications.
2. **Application developers enforce arbitrary slashing conditions on native Bitcoin**\
   BitDSM allows developers to enforce application specific liquidation or slashing logic on native bitcoin, which can be triggered directly from the ethereum smart contracts and executed on the BitcoinPod. 
3. **Institutions like ETF issuers to get altcoin exposure with native Bitcoin staking.** \
   Since the ETF funds cannot leave the custodian, this enables ETF issuers to offer BTC staking without altering the beneficial ownership of the funds or incurring counterparty risk through a multi-party multisig arrangement.
4. **Custodians offer in-kind Bitcoin to retail customers**\
   Bitcoins with custodians today typically reside in some version of a 2-of-3 setup with the client. BitcoinPods can mobilize these funds without altering custodian's current infrastructure. 
5. **Retail users to leverage Bitcoin without giving up control**\
   With the prominent HODL culture among Bitcoiners, it becomes easier to unlock Bitcoin sitting in cold wallets when there’s no need to give up control.