Hold bitcoins? This is how it works in DeFi

The long-awaited day finally arrived on October 19, when the first Bitcoin (BTC) Exchange Traded Fund (ETF) hit the New York Stock Exchange and took crypto assets into the spotlight on mainstream news sites and alternative media.

Despite the fact that the ETF in question won’t hold real Bitcoin but is a futures-based instrument, investors and experts across the ecosystem have hailed its launch as evidence that Bitcoin has hit the big leagues and will soon hit the coveted price of 100,000 Exceeding the US dollar will target.

Many investors either won’t have access or will choose not to interact with the newly introduced EFT, but holders can still use a variety of strategies to capitalize on their BTC holdings.

Here are some strategies BTC owners can use to make a profit.

DeFi meets BTC in BadgerDAO

BadgerDAO is an open source protocol built on top of the Ethereum network with the specific goal of building the products and infrastructures required to facilitate the integration of Bitcoin into decentralized finance.

Currently, BadgerDAO has the most extensive list of paired BTC pools for investors to provide liquidity to.

As can be seen in the image above from the BadgerDAO dashboard, there are offers ranging from simply staking Wrapped BTC (wBTC), which can generate profits of 1.22% to 27.98% depending on lockout conditions, to Staking out more complex liquidity providers (LP) are enough. Strategies like the yuan / wBTC / sBTC pool that offer returns between 7.07% and 45.37%.

It is important to note that there are risks associated with the bundling of BTC and RenVM as the user will have to give up control of the original BTC in order to obtain wBTC or renBTC, thereby violating the cryptocurrency “not your key”. , not your cryptocurrency.

For LP tokens that pair BTC with other cryptocurrencies such as Ether (ETH), BADGER or stablecoins such as Tether (USDT) and USD Coin (USDC), holders must also consider the possibility of suffering permanent loss if the Bitcoin price at a. increases significantly in proportion to the other token it is paired with.

Dealer Joe

Trader Joe is, according to Defi Llama, the largest decentralized trading platform by Total Value Locked (TVL) on the Avalanche network, with assets currently valued at $ 2.18 billion on log.

Using wBTC on the Avalanche Network requires another wrapper that generates wBTC.e, which can then be traded on the network or used to provide liquidity.

At the time of writing, Trader Joe is offering returns on three LP tokens, including a 26.223% return for the wBTC.e / AVAX pair, 16% for the wBTC.e / USDC.e pair, and 11.9% for the the wBTC .e / USDT.e pair. All rewards are paid in the protocol’s native JOE token.

Raydium

Raydium is the top-rated DeFi protocol on the Solana network according to data from Defi Llama and currently has a TVL of $ 1.77 billion.

Users who want to spend their BTC on Solana have the option of combining it with USDC, USDT, Serum (SRM), and a wrapper form of Solana called mSOL.

The yield on offer ranges from 5.16% to 14.27%, with all rewards paid in the platform’s native RAY tokens.

Pancake exchange

PancakeSwap is TVL’s # 1 protocol on Binance Smart Chain (BSC) with data from Defi Llama showing that $ 5.39 billion worth of tokens are currently tied to the protocol.

In order to be able to use Bitcoin on BSC, it must first be packed in BTCB, which can then be processed in the network.

Currently, PancakeSwap offers returns of 5.44% for the BTCB / ETH pair, 15.82% for the BTCB / BUSD (Binance Stablecoin, Binance USD) pair and 20.79% for the BTCB / BNB pair. All rewards are paid in the protocol’s native CAKE tokens.

Related: Valkyrie Bitcoin Linked ETF Futures starts on the Nasdaq with a price decline of 3% in the first hour

Decentralized Bitcoin Futures

DYdX is a decentralized perpetual futures trading platform that made waves back in September when it released thousands of dollars worth of DYDX governance tokens to early adopters of the platform.

Similar to the ProShares Bitcoin Strategy ETF, transactions made using the dYdX protocol are not settled in actual Bitcoin, but in stable USD, so BTC creators may not be overly concerned about the exchange.

Unlike trading a government regulated futures product that is only available when the traditional market is open, dYdX offers a decentralized 24/7 trading environment that crypto fans are increasingly loving.

Would you like more information about trading and investing in the cryptocurrency market?