tl;dr: the Bitcoin DeFi market. Bridge builders.
Calling Bitcoin a “fast follower” may sound nuts.
Though, technically it wasn’t the first effort at “digital gold,” it certainly is the mack daddy of the crypto space, the longest chain, and has first mover advantage when it comes to global perception.
In my mind, it’s nearly game over as to owning the position of “digital gold.”
Within crypto, it’s already the global reserve currency and as it’s in the top 15 of global currencies all up, it’s on its way to inevitable path to domination..
On the road to that supreme position, Bitcoin needs to improve its utility.
Not the “I can’t buy coffee with Bitcoin” (though you can), but in terms of giving it the kind of flexibility that you can have with Ether, particularly when it comes to Decentralized Finance.
As I’ve said before, if Bitcoin is “digital/crypto gold,” then Ether is “crypto Wall St.”
Where Gold is Liquid
The difference in a digital world from a physical one is that you should be able to use your gold as a liquid, fungible asset, particularly if that asset represents 65%+ of the total value of the market and, soon enough, trillions of dollars worth of value.
Right now, that’s cumbersome. Doable, but cumbersome. Keep enables the creation of tokenized Bitcoin via its tBTC, which is non-custodial. WBTC does the same, but is custodial, which brings risk of a different kind.
Meanwhile, there are efforts by RSK and Stacks to build parallel DeFi markets that are Bitcoin native. Think “crypto London” versus “crypto New York” as global financial capitals. Today, Ethereum is NYC, no doubt.
Badger: Another Brick in the Road
Into this fray, in a big way, is the Badger DAO which is a community-owned effort to aid people in taking their tokenized Bitcoin (think of this as another part of the bridge between the two worlds) and deposit them into yield-bearing instruments.
And, as I shared in “Yield Famine,” that’s going to be an increasingly attractive market.
Don’t worry, those aren’t my balances :)
I haven’t played around with Badger yet, but I am going to. I know they built some additional credibility by having an incentivized staking mechanism on Nexus Mutual thus increasing the amount of insurance that people could buy (creating a virtuous cycle of its own).
First pathways, then Highways
It’s really exciting and powerful to see the roads, and eventually superhighways and Hyperloops getting built between Bitcoin, Ethereum, and eventually all the others.
Friction will get reduced further, value will flow.
The Great Liquidity Unlocking continues.
