Bring your BTC to DeFi through the Badger Bitcoin Bridge
The Next Milestone in DeFi
BadgerDAO continues to pave the way for Bitcoiners to stack sats across chains. Until now, users had to go through multiple applications in order to generate the assets required to take advantage of the Badger Setts. The Badger Bridge is the first of its kind to enable users to earn yield on their tokenized Bitcoin immediately, all while transacting within the same app. What used to be an arduous process to obtain yield on your Bitcoin is now just a few short clicks. With the launch of the Bridge within the Badger App, we have taken a significant step towards realizing the Badger mission of being the one-stop shop for users to put their Bitcoin to work.
The perks of using the Badger Bridge: The Bridge Mining Program
Aside from the more seamless UX, Badger is incentivizing the transfer of up to 100,000 BTC ($5b) with nearly $6m in user rewards. This will be the largest incentive program, now coined as “The Bridge Mining Program”, used to bridge Bitcoin to Ethereum to date, with rewards for simply using the bridge to mint & earn yield.
To put simply, not only will users now be able to seamlessly earn yield on tokenized BTC immediately, they will also get rewarded for doing so. See additional details here: https://forum.badger.finance/t/bip-41-inaugural-badger-cetedel-product-badger-btc-bridge-rewards/3577
Strengthening our Relationship with RenVM
In further solidifying our relationship with the Ren Team and in addition to helping improve the overall user experience around earning yield on native BTC, the Ren Project has agreed to transition their widely used platform, wBTC.cafe, into what will effectively be the new Badger Bridge. In other words, wBTC.cafe’s traffic will now route users to the Badger Bridge
Since June of 2020, the wBTC.cafe has been responsible for successfully minting over 25,000 BTC, equivalent to a whopping $1.3b in token conversions. Needless to say, the sheer volume speaks for itself when it comes to transacting on platforms with proven infrastructure.
Background & Security
Ren is a protocol designed to move assets across multiple chains. In the case of BTC, users of RenVM lock up their BTC holdings through a decentralized custodial network, and are issued ERC-20 representations, such as renBTC. For more information, see https://github.com/renproject/ren/wiki. RenVM is new technology that has undergone robust security audits. To date they have transacted a total volume of 190,000 BTC (equivalent to $9.5b by today’s BTC price) with 100% uptime and no loss of user funds.
Given this depth of collaboration, we expect to mimic this functionality throughout all DeFi Ecosystems, so keep an eye out for similar products on Binance Smart Chain, Fantom, Solana, Polygon, and more!
How to use the Badger Bridge
Visit the Badger Bridge and you will see the above interface. Here is where you will convert your BTC to BTC-on-Ethereum. This will require a Metamask wallet, some ETH to pay for transaction fees, and good ol’ BTC. Also: if you’re using Brave Browser, make sure you turn off shields, like so:
We’ll be going over the 3 main functions for the bridge: mint, mint & earn, and release. Now let’s get rockin’!
- Connect Metamask
When you get to the Badger Bridge, on the top right there should be a button to connect your wallet. Click that, and that wallet address will be where you receive the renBTC.
2. Input the amount of BTC you intend to mint onto Ethereum (minimum is .003 BTC)
Note that below the input amount will be the amount of renBTC you will be receiving after RenVM and network fees. The minimum is .003 BTC to send to RenVM. *Beware of gas fees on the Ethereum network, as they have incurred around $100-$150 in ETH during the testing of the bridge.
3. Select the BTC-on-Ethereum token you wish to mint (in this case it’s renBTC)
In this first iteration, you will only be able to mint renBTC. Be sure to check the destination ETH address and review the amount you will receive. Disclaimer: On this screen, you’ll see a breakdown of fees between RenVM and Badger — keep in mind, with the Badger Cetedel Program, there is up to 25,000 BADGER and 100 DIGG incentives for Bridge users! , Note: the minimum amount of BTC to send to the Badger Bridge is .003 BTC; due to fees on Bitcoin and Ethereum chains, minting/burning small amounts may not always be advised.
4. A pop up will contain BTC address to send your BTC to the RenVM custodial address
You should get a popup with a BTC address to send your BTC to. This is the gateway address that will secure your BTC in RenVM. If you are using a mobile app to custody your bitcoin, you can scan the QR code and send it there without having to copy/paste the address. The QR will contain the amount to send- if you want the QR code to just contain the BTC address, go to QR Code Options and click Raw address. Send the exact amount of BTC that you input in the Badger Bridge. No more, no less.
E.g. if you want to mint 0.01 BTC in the Badger Bridge, send 0.01 BTC to the address that it generates for you.
5. Send BTC to the given address and wait for 6 confirmations on the Bitcoin Network (May take hours)
Before RenVM mints your renBTC for the BTC you are sending to the custodial address, you must wait for the Bitcoin network to register 6 confirmations on the Bitcoin network. This may take an hour or so. RenVM is designed to be secure, which means it will only mint renBTC after the network confirms this number of transactions. You will be given a transaction hash and a link to the explorer so you can check the progress of your transaction.
6. After the 6 confirmations, click Submit to Ethereum to mint renBTC
Perhaps you caught up on The Mandalorian for a couple of episodes while you waited for your transaction to go through all 6 confirmations. And now they’re through! The last step is to click Submit to Ethereum, which triggers the smart contract to mint your renBTC representation of your BTC. This will cost some ETH to execute (in this case, it costs roughly 0.025 ETH), which you must confirm via your Web3 wallet (e.g. Metamask). You should be able to see the renBTC in your Metamask wallet when the transaction succeeds.
But if you don’t, worry not. You may have to add the renBTC token address to make it visible in your Metamask under Assets.
renBTC Contract Address: 0xeb4c2781e4eba804ce9a9803c67d0893436bb27d
WBTC Contract Address: 0x2260fac5e5542a773aa44fbcfedf7c193bc2c599
With renBTC, you are able to participate in the Badger App by staking in one of Curve’s BTC pools (renBTC and sBTC pools) and stake the LP tokens you get from the pools into one its respective Badger Sett Vault to earn $Badger and $DIGG tokens.
II. Mint & Earn
The Badger Bridge doesn’t just enable bridging BTC to Ethereum; it gets you started immediately stacking sats through through its Sett vaults. There has never been an easier and permissionless way to start earning on your Bitcoin. Very similar to the Mint function, here’s how it looks:
In the dropdown box, you can choose one of three Badger Setts to start earning yield off of one of Badger’s liquidity strategies. This is a huge move forward for Bitcoin-based DeFi- a cross-chain functionality that immediately skips the process of going to Curve, getting LP tokens, going back to the Badger App, depositing and then staking. This also saves you transaction fees, turning a 4-step process into a 1-step process, all in one place. Badger truly is the one-stop shop for putting BTC to work.
Suppose you wanted to bring your renBTC back from Ethereum’s DeFi platforms to native BTC.
- Switch to the Release tab
- Select the amount of renBTC you want to redeem for BTC
- Input the destination BTC address
- Hit Next, review the fees, and click Confirm
This may require allowing the application to use your renBTC. Click OK, and then you will be asked to Submit to Ethereum. Once the transaction clears, wait for 30 confirmations, and you will be sent your BTC to your destination address.
Enter the Badger 🦡
For a full video tutorial on how to use the Badger Bitcoin Bridge, check out our first episode of Enter the Badger, a new video series aimed at helping users navigate DeFi while using Badger products.
For additional information on the incentives for the Badger Bridge, check out this forum post.
How Do I Learn More?
There are many ways to engage the Badger DAO community and educate yourself on the use of our protocol.