> For the complete documentation index, see [llms.txt](https://cvnnt.gitbook.io/documentation/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://cvnnt.gitbook.io/documentation/introduction/why-use-covenant/how-covenant-empowers-btcfi.md).

# How Covenant empowers BTCFi

Covenant system offers set of beneficial BTCFi features for its users, based on statefulness, programmability and absence of trusted, off-chain intermediaries or gatekeepers.

Covenant system provides Bitcoin users with real self-custody DeFi - without ever losing control of their BTC. Covenant allows BTC holders to enjoy all the BTCFi benefits using their BTC value while retaining full ownership over their underlying original BTC deposit.

* HODL, trade and earn at the same time? YES! - Users channel their real BTC with Covenant system in self-custody way – and immediately get their channel ownership unique asset and channeled BTC value to lend, trade, swap, or farm anywhere in the DeFi ecosystems, while their original UTXO on Bitcoin verifiably stays under their sole control - all deterministic, programmable and completely on-chain.
* Keep verifiable self-custody while trading - As long as the user holds their unique channel ownership asset, on-chain proofs (UTXOs) show that the original BTC still belongs to them - even when their BTC value is moving across DeFi protocols.
* Fair and simple taxation - Because the same UTXO comes back on withdrawal, users can easily prove they never sold or transferred ownership. No double taxation, no complicated cost-basis tracking.
* Deterministic, programmable withdrawals - Withdraw the original BTC anytime in under one minute. No challenge periods, no federations, no human intervention, no manual approvals - just a deterministic automated script that releases the coins the moment the user asks.
* Works with MetaMask and every EVM tool - Covenant supports native EVM. Connect MetaMask, Rainbow, or any wallet and start using Uniswap, Aave, Curve, etc., with real Bitcoin liquidity.
* Privacy-first, KYC-optional <mark style="color:blue;">-</mark> By default, KYC or AML are not required - everything works public, decentralized and on-chain. Users in regulated jurisdictions can voluntarily attach compliance proofs including ZK-based through third-party providers without affecting non-KYC users.

Bitcoin users no longer have to choose between HODLing safely, retaining their self-custody, and participating in DeFi or earning yield. Covenant system users get all of it and even more - at the same time, with the same coins, under their self-custody.