Bitcoin holders can benefit from DeFi in this way
Bitcoin is back at an all-time high (ATH), making it even easier for holders to take advantage of the lucrative opportunities DeFi offers to investors who are ready to use their tokens.
On October 19, the first Bitcoin Exchange Traded Fund (ETF) listed on the New York Stock Exchange (NYSE) attracted the attention of numerous news outlets and major media outlets.
Despite the fact that this ETF will not hold a physical Bitcoin, but rather a futures-based instrument, investors and experts across the ecosystem have hailed its launch as evidence that Bitcoin has had some success and will soon see its price target of $ 100,000 will surpass.
Many investors will not have access or will choose not to interact with the relaunched ETF, 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.
BadgerDAO supports Bitcoin integration in DeFi
BadgerDAO is an open source protocol built on top of the Ethereum network and its specific goal is to build the necessary products and infrastructures to facilitate the integration of Bitcoin into DeFi.
Currently, BadgerDAO has the largest number of pools associated with BTC for investors to provide liquidity to.
BadgerDAO’s Bitcoin Profit Offering Service | Source: BadgerDAO
As can be seen in the image above from the BadgerDAO dashboard, there are services that range from simply staking wrapped BTC (wBTC) which can yield a return of 1.22% to 27.98% depending on the stake (LP ) Strategies like the renBTC / wBTC / sBTC pool, which offer returns from 7.07% to 45.37%.
It is important to note that there are risks associated with packaging BTC and RenVM as users will have to give up control of the original BTC in order to receive wBTC or renBTC and violate the “not your key” cryptocurrency code. , not your cryptocurrency.
For LP tokens that pair BTC with other cryptocurrencies like Ether (ETH), BADGER, or stablecoins like Tether (USDT) and USD Coin (USDC), holders must also consider the possibility of temporary losses to the token it is paired with.
According to Defi Llama, Trader Joe is the largest Total Value Locked (TVL) decentralized exchange on the Avalanche network with assets of $ 2.3 billion.
Bitcoin-related pools on Trader Joe | Source: Trader Joe
The use of wBTC in the Avalanche Network requires another layer wrapping that wBTC.e generates, 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 Pair wBTC.e / USDT.e pair. All rewards are paid in the protocol’s native JOE token.
Raydium is the top-rated DeFi protocol on the Solana network based on data from Defi Llama and currently has $ 1.77 billion in TVL.
Users who want to spend their BTC on Solana have the option of combining it with USDC, USDT, Serum (SRM), and a pack of Solana called mSOL.
Bitcoin-related pools on Raydium | Source: Raydium
The yield on offer ranges from 5.16% to 14.27%, with all rewards paid in the platform’s native RAY tokens.
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.
Bitcoin-related pools on PancakeSwap | Source: Pancake Swap
Currently, PancakeSwap offers a yield of 5.44% for the BTCB / ETH pair, 15.82% for the BTCB / BUSD (Binance Stablecoin) pair and 20.79% for the BTCB / BNB pair. All rewards are paid in the protocol’s native CAKE token.
Decentralized Bitcoin Futures
DYdX is a decentralized perpetual futures exchange that made headlines in September when it released thousands of dollars’ worth of DYDX governance tokens to early adopters.
Similar to the Bitcoin Strategy ETF from ProShares, no physical bitcoins, but USD stablecoins are used on the dYdX exchange.
However, 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 where the credit cryptocurrency is becoming increasingly popular.
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According to Cointelegraph