Yala Protocol - Bitcoin Risk Analysis System

Table of Contents

• About Yala Protocol
• Installation
• Machine Learning
• System Architecture

About Yala Protocol

Yala is a decentralized Bitcoin-backed stablecoin lending protocol that allows users to obtain stablecoin loans using BTC as collateral. The protocol features advanced risk management and a flexible liquidation system.

Key Features

• Bitcoin-Backed Loans

  • Use BTC as collateral
  • Borrow stablecoins against BTC
  • Flexible loan terms

• Risk Management

  • Dynamic LTV ratios
  • Multi-stage liquidation process
  • Real-time risk monitoring

• Protocol Parameters

  • Initial LTV: Up to 80%
  • Liquidation Threshold: 90%
  • Repayment Window: 5 days
  • Minimum Collateral: 0.1 BTC

Machine Learning Models

Risk Classification Model

• Type: Random Forest Classifier
• Features:
  • Price momentum indicators
  • Volatility metrics
  • Volume indicators
  • Technical analysis signals
• Target Variables:
  • Risk level (Low/Medium/High)
  • Price direction prediction
  • Volatility regime classification

Volatility Prediction Model

• Type: Gradient Boosting Regressor
• Features:
  • Historical volatility patterns
  • Market regime indicators
  • Trading volume metrics
• Predictions:
  • Forward-looking volatility
  • Risk regime transitions
  • Market stress indicators

Model Training

python MLModel.py train --data-path data/bitcoin_history.csv

Model Inference

python MLModel.py predict --input-data current_market.csv

Risk Analysis

Visualization Tools

python RiskVisualization.py

Generates the following plots:

• Price and volatility trends
• Drawdown analysis
• Return distribution
• Recovery patterns
• Interest rate model
• Volatility regimes

Installation

1. Clone the repository:

git clone https://github.com/yalaorg/BitcoinRisk.git
cd BitcoinRisk

2. Install dependencies:

pip install -r requirements.txt

System Architecture

Risk Assessment Flow

1. Data Collection

   • Bitcoin price feeds
   • Market indicators
   • Volume analysis

2. Risk Analysis

   • Volatility calculation
   • Machine learning predictions
   • Market regime detection

3. Protocol Actions

   • LTV adjustments
   • Interest rate updates
   • Liquidation triggers

Liquidation Process

Stage	LTV Threshold	Action	Time Window
Warning	80%	Notification	Immediate
Margin Call	85%	Partial Liquidation	5 days
Liquidation	90%	Full Liquidation	Immediate

API Reference

Risk Prediction Endpoint

POST /api/v1/predict/risk

Request Body

{
    "timestamp": "2024-01-16T10:00:00",
    "btc_price": 90000.0,
    "collateral": 1.5,
    "loan_amount": 60000
}

Response

{
    "risk_level": "medium",
    "recommended_ltv": 0.75,
    "liquidation_price": 67500.0,
    "warnings": []
}

Model Info Endpoint

GET /api/v1/model/info

Contact

Dev - @vickyfu09

Acknowledgements

• Bitcoin price data from Yahoo Finance