No more wrapped Bitcoin? This DeFi platform brings native BTC lending to Ethereum
Till not too long ago, nearly all of Bitcoin (BTC) lending passed off on centralized platforms. This was predominantly due to the cumbersome course of concerned in tokenizing Bitcoin right into a wrapped ERC-20 model earlier than it may very well be deposited on the Ethereum (ETH) community.
The ensuing implication of this inconvenience was not simply the extra transaction charges and slippage incurred however a fragmented decentralized finance (DeFi) ecosystem. At the moment, just one% of Bitcoin is circulating on Ethereum.
BiFi is a platform that facilitates actual Bitcoin lending on DeFi by connecting the Bitcoin and Ethereum networks immediately. The platform describes itself as “like Compound or Aave, however with actual, native Bitcoin.” As a substitute of going by the method of wrapping their Bitcoin, customers can use their native BTC from their Bitcoin pockets to lend and borrow ERC-20 property.
With BiFi’s native Bitcoin lending service, Bitcoiners can have interaction with DeFi protocols with out the necessity for third-party custodians and retailers. In eliminating the necessity for wrapped BTC, BiFi expects “an enormous inflow of BTC holders into DeFi” that may form the way forward for the trade.
Multichain lending with most safety
BiFi claims to have been designed with a “security-first mindset.” Utilizing BIFROST’s multichain know-how and a mixture of cryptographic proofs, BiFi ensures the safety of its protocol.
The important thing facet right here is the truth that the Bitcoin and Ethereum networks are linked immediately. Each these blockchains have already got a lot of nodes making certain their computational integrity.
“We construct cryptographic proofs to confirm the accuracy of transactions that occurred on the Bitcoin community and confirm it on-chain on Ethereum sensible contracts. It might be costlier to carry out on-chain verifications, however this computational integrity approach is essentially the most safe means so far,” mentioned BiFi in a blog post.
The platform additionally makes use of fraud proofs to confirm that the actions of the relayer are appropriate. It does this by creating cryptographic proofs and verifying them on-chain.
A DeFi future with out fragmented liquidity
Since its launch in January 2021, BiFi’s Complete Worth Locked throughout staking, lending and pooling companies has crossed $219 million. The platform additionally has a flash loan-based leveraged yield farming and buying and selling service — BiFi X.
“Connecting Bitcoin and Ethereum community is a big step ahead. But BIFROST will join extra networks and BiFi will provide lending and monetary companies to increase the DeFi ecosystem to show DeFi into future finance,” commented Dohyun Pak, the CEO of BiFi and BIFROST.
The challenge’s subsequent launch might be a multichain pockets, which it expects to launch in Q3 2021. Customers will have the ability to retailer BTC, ETH, BNB, ERC-20 tokens and BEP-20 tokens.
In 2022, BiFi goals to increase to extra networks for multichain DeFi lending from EVM to non-EVM. By way of a “Multichain Dev Suite,” builders will have the ability to function DApps amongst all cross-EVM and non-EVM networks, increasing the multichain DeFi ecosystem.
In the end, BIFROST envisions a future with out remoted capital markets on quite a few chains. To make this occur with the principle aim of fixing one in every of DeFi’s largest challenges – interoperability – the challenge permits capital to movement freely between blockchains with none wrapping, bridging or custodians. Constructed upon its “Common Multichain Middleware,” BiFi is the multichain DeFi platform that won’t isolate capital markets on quite a few chains.
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