Bitcoin, the OG Cryptocurrency, founded in 2009 by Satoshi Nakamoto and later handed over to Gavin Andersen, has successfully brought in a new era of decentralized digital currencies and blockchain technology. Bitcoin's original purpose was to be a decentralized peer-to-peer payment network and store of value that could rival gold. With global adoption rising and a price that blows Gold out of the water - one could argue they succeeded on both objectives. Today DeFi is currently the next frontier in blockchain technology.
As I've outlined in a previous post, DeFi and interoperability are the two places blockchain developers today are putting the majority of their time and effort. As of writing this Bitcoin still holds a 42%+ dominance of the crypto market. But if you look at the majority of DeFi applications today, they are almost exclusively located on Ethereum and deal in ERC-20 tokens. Some would argue that WBTC is making it's stake in the market and that is partially true, but with only $6.8b of the total $711b Bitcoin market cap currently there I think it's hard to make that case. This leaves nearly 40% of the market that goes untouched in one of Crypto's hottest spaces. Today I'd like to take a look at three projects that are trying to bridge the gap and bring more Bitcoin to DeFi.
Badger DAO is a Decentralized Autonomous Organization (DAO) that has a single purpose in mind - "build the products and infrastructure necessary to accelerate Bitcoin as a collateral across all blockchains." Badger DAO was designed as a community-led initiative first, any decisions are made through a governed vote that determines what, how and when Badger DAO products are created. Community members can propose new product ideas to the DAO, pitch it to the larger community then take it to the official vote if it passes. If it passes the Badger DAO ops team will then collaborate with them to build it, fund it and market it.
As for the product side of it Badger DAO has two main pillars here, Sett and DIGG. Sett is an automated DeFi aggregator focused on tokenized BTC assets, similar to Harvest.Finance. Users deposit assets to earn a yield then smart contracts put those to work with a variety of strategies on DeFi protocols. Then DIGG is a non-custodial synthetic Bitcoin on Ethereum. It's supply is elastic and pegged to the price of DIGG vs BTC; so when DIGG's price increases above that of BTC wallet balances would increase - if lower than wallet balances decrease. Their code has been fully audited and boasts a large array of contributors, with 60+ since their launch a few months ago. Their Setts (vaults) have ROIs between 2.3%->113%. I've watched a few interviews with the founder and looked into this pretty heavily. This looks like a really promising project.
Cake DeFi is a platform that allows users to generate cash flow through pooled masternode staking, liquidity provision and lending. Built on DeFi Chain (DFI) Cake aims to be a one-stop shop for all crypto related services. On top of their current crypto-related services Cake plans to implement a variety of assets in the future and allow users to diversify their assets in a simple way.
The blockchain Cake is built on, DeFi Chain, was made specifically with DeFi in mind. DFI also anchors it's block to Bitcoin's blockchain every few blocks to help protect it from a 51% attack and maintain it's decentralization. According to their founder, U-Zyn Chua, multi-purpose blockchains like ETH and TRX can get congested with all the additional unrelated DApps that share the environment with DeFi and due to their multi-purpose nature may open themselves up to vulnerabilities similar to some we've seen in the last couple of weeks with BSC. On Cake current APY for LPs vary from 20%-95% and staking returns from 5.4%-92%. They also have one of the best referral programs in crypto, offering up to 1% on referral's investments and $10 when a referral deposits $50 or more ($30 goes to the one getting referred).
Sovryn is a non-custodial and permissionless smart contract based system for Bitcoin lending, borrowing and margin trading. In a nutshell Sovryn is the decentralized answer to platforms such as BlockFi, Celsius and many of the centralized exchanges today. Sovryn is built on RSK, an EVM compatible sidechain of Bitcoin that allows users to host smart contracts for the Bitcoin Network similar to how Ethereum does. Currently they offer the ability to do spot-exchanges, margin trading, a lending pool and use of the FastBTC Relay.
Currently Sovryn only supports BTC and USD stablecoin pairs but plans to implement more currencies and derivatives in the future. Current lending APY is between 0.07% and 9.2%, these APYs will likely go up as Sovryn sees more adoption. Liquidity mining is currently an unknown APY due to how new the platform is, but they have been running periodic SOV airdrops to those who are providing early liquidity so it may be a good reason to get in early. I usually wouldn't include something as new as Sovryn in a list like this but their team is fully doxxed and extremely experienced in DeFi/Bitcoin and the code has already been audited. This is also probably the hardest one to get into as you need to download a wallet specifically for the RSK sidechain but it's one to definitely keep your eyes on. There's also a very interesting interview the founder of Sovryn did here, if you want to learn more I'd definitely check it out.
For me personally I think I'm most excited for Sovryn and Badger. Both projects have extremely experienced teams and a very interesting way to implement DeFi for Bitcoin. I invest in a lot of different cryptocurrencies, like I'm sure many of you do as well, but Bitcoin is still a large portion of my portfolio. Having a place to put my BTC to work that isn't just WBTC is extremely exciting for me. Do you currently use any yield farms or platforms to maximize the BTC you hodl? Or do you just let it sit and wait for the next market pump to sell off? Let me know in the comments I'd love to know!
Thanks for reading and if you want more don't forget to follow/like the post. Happy earnings!
Two More Products I Use
Ledger Wallet - Get a $25 voucher and Crypto Beginner Guide when you purchase through this link. Best wallet for long term storage.
DeltaBadger - Simple to use Crypto DCA Bot, 10% off through this link. Great for long-term investing.