Alongside wBTC, Stacks, and Rootstock, BadgerDAO, RenVM, and Liquid Network are promoting various use cases of Bitcoin DeFi.
BadgerDAO
A decentralized autonomous organization (DAO) called BadgerDAO allows BTC to be used as collateral for various DApps. The BadgerDAO uses the Ethereum-based token BADGER for log management and incentive distribution.
Users can earn income from their BTC synthetic assets with Sett Vaults, the first product offered by Badger. Users can lock their tokenized bitcoins in SETTs, which are pools of tokens, and let smart contracts manage their holdings to generate a return in the form of bTokens.
Badger’s second product, called Digg, is software that controls the elastic-supply cryptocurrency called DIGG token, which is pegged to the price of BTC in US dollars. Like any other token, DIGG can be deposited into SETTs to provide a yield to its holders and used in DeFi protocols.
RenVM
The decentralized Ethereum protocol Ren creates tokens that monitor the value of non-Ethereum assets like Bitcoin and provides liquidity to projects on multiple blockchains. However, Bitcoin holders can use Ren (required to pay nodes) to access Ethereum’s suite of DeFi products without selling their BTC or moving their assets across blockchains.
The Ren virtual machine holds the original funds in memory, accepting tokens from one blockchain and generating new tokens on another via its RenBridge to exchange assets between blockchains. For example, a user can transfer BTC to the RenVM, which would issue renBTC, a new token on Ethereum that mirrors the original Bitcoin, meaning the transaction can be reversed if the user wants to get their Bitcoin back.
liquid network
The Liquid Network is a layer 2 bitcoin solution and cross-exchange settlement network that enables the private and rapid issuance of digital assets such as security tokens, stablecoins and other financial instruments on the bitcoin blockchain.
LBTC, a wrapped version of Bitcoin, serves as a native token on the Liquid sidechain. Users send BTC to a Lightning Network address (a process called peg-in) on the Bitcoin network to use the Liquid Network. A similar amount of LBTC will be minted on the Liquid Network and delivered to the user’s address after the transaction has received 102 confirmations.
Additionally, a peg-out can be initiated to withdraw BTC by sending LBTC to a non-recoverable address for burning, allowing a member of the Lightning Network to send the original BTC to a user’s Bitcoin network address if it receives two separate confirmations.
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