The “DeFi Benchmark” Bitcoin Interest Rate
Have you ever wondered why there isn’t a widely used interest bearing tokenized Bitcoin for DeFi? Liquidity of tokenized BTC on Ethereum is spread across different flavors — namely: wBTC, renBTC, tBTC & sBTC.
The Vision behind ibBTC is to bundle these “flavors” together and build a yUSD-equivalent for BTC that would become the default BTC denominated asset on Ethereum — while also enabling users to stack their sats!
How does it work ?
Badger Setts are the first liquidity pools being leveraged to mint ibBTC. We will be able to add other pools in the future. These will be referred to as “peaks”.
The process is as follows:
- User Deposits Tokenized BTC into any of the following Curve Pools — renBTC, sBTC, or tBTC.
- The Curve LP tokens are deposited to the Badger Setts for Bitcoin yield.
- The Badger Sett LP tokens are deposited to DefiDollar to obtain ibBTC.
Luckily, pre-existing Badger LP’s are “Sett up” for success — bypassing steps 1 and 2 of the process.
With sufficient liquidity, users will be able to bypass these gas-intensive steps and purchase ibBTC directly from a decentralized exchange — allowing them to access an interest-bearing asset with full exposure to Bitcoin. The interest for this asset will be sourced from:
- Curve Trading fees
- CRV mined through the Curve platform
- Badger Harvests from the Badger Setts
The trading fees from Curve along with the farmed Badger and CRV are swapped back into the underlying assets.
ibBTC as a Composable Asset
ibBTC will be a composable asset in its own right, and as such will be fully integratable into other DeFi applications and protocols. We plan to start creating utility and demand for ibBTC by creating an additional Badger Sett vault alongside a sushi ibBTC/wBTC LP, incentivized with Badger, DIGG, and DFD.
As the cherry on top — ibBTC will be a native asset on widely used side chains. At launch, we will simultaneously launch Setts on BSC and Polygon. These will be Quickswap and Pancakeswap pools with 100% auto compounding rewards — maximizing your potential yield!
The Role of DefiDollar
We are excited to partner with DeFiDollar to accomplish this. DeFiDollar is a longstanding player in the DeFi space, and until this point has been focused on stablecoins. This partnership is expected to boost TVL for both projects, and lays the groundwork for future collaboration.