Writz Protocol whitepaper

Trustless Bitcoin Lending with Zero-Knowledge Position Privacy on Stellar.

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Abstract

What the paper argues

Existing Bitcoin DeFi protocols force users to choose between custodial risk, where a bridge operator holds the coins, and public exposure, where every position size is visible to all observers. Writz Protocol is a Bitcoin lending protocol on Stellar's Soroban smart contract platform that combines SPV-verified native BTC collateral with zero-knowledge position privacy.

The protocol makes three technical contributions: a stateless Bitcoin SPV client on Soroban that verifies P2WSH locking transactions without on-chain header storage or trusted relayers; a Groth16 commitment scheme over BN254 that hides collateral, debt and liquidation thresholds while the chain still enforces the lending invariants; and PrivateLend, a lending market with a two-slope interest rate model calibrated for Bitcoin collateral and a multi-oracle price aggregator conforming to SEP-40.

Writz Protocol is live on Stellar testnet, not mainnet. The paper is informational and is not financial advice or an offer of any security.

Contributions

Three pieces

  1. Stateless SPV on Soroban. A contract verifies Bitcoin transaction inclusion from block headers and a Merkle proof supplied at call time. Nothing is stored and no relayer is trusted.
  2. Private positions. Positions are Poseidon commitments in a Merkle tree. Groth16 proofs let the chain enforce collateral ratios and liquidations without learning amounts.
  3. A lending market. PrivateLend, with a kinked interest rate model, ZK-private liquidation proofs and a median oracle, plus security propositions with proof arguments.

Contents

Inside the paper

  1. 1IntroductionCustodial risk, positional transparency, and the three technologies that make Writz Protocol possible.
  2. 2BackgroundBitcoin SPV, Groth16, BN254, Poseidon and Soroban.
  3. 3Related workBTC Relay, summa-tx, interBTC, Aztec and Stellar Private Payments.
  4. 4Protocol designP2WSH custody, stateless SPV verification, the four circuits, the interest rate model, liquidation and oracles.
  5. 5Security analysisThreat model, custody safety, computational privacy and double-spend resistance.
  6. 6Economic modelRevenue streams, fee distribution and conservative projections.
  7. 7ImplementationContract suite, compute costs and circuit performance.
  8. 8Conclusion and future workPhase 2 and Phase 3, and post-quantum preparedness.
  9. ATestnet deployment recordsBitcoin Signet and Soroban testnet evidence.

Cite

Citing this paper

Plain text

Sebastián Salazar Solano. "Writz Protocol: Trustless Bitcoin Lending with Zero-Knowledge Position Privacy on Stellar." Version 1.0, July 2026. Zenodo. https://doi.org/10.5281/zenodo.23148520

BibTeX
@misc{salazar2026writz,
  author = {Salazar Solano, Sebasti{\'a}n},
  title  = {Writz Protocol: Trustless Bitcoin Lending with Zero-Knowledge Position Privacy on Stellar},
  year   = {2026},
  month  = jul,
  note   = {Version 1.0},
  publisher = {Zenodo},
  doi    = {10.5281/zenodo.23148520},
  url    = {https://doi.org/10.5281/zenodo.23148520}
}