Besides wBTC, Stacks and Rootstock, BadgerDAO, RenVM, and Liquid Network are promoting various Bitcoin DeFi use cases.
A decentralized autonomous organization (DAO) called BadgerDAO allows BTC to be used as collateral in various DApps. The BadgerDAO uses the Ethereum-based BADGER token for protocol governance and incentive distribution.
Users can earn income on their BTC synthetic assets using Sett Vaults, the first product offered by Badger. Users can lock up their tokenized Bitcoin in SETTs, which are pools of tokens, and let smart contracts manage their holdings to produce a return in the form of bTokens.
Badger’s second product, called Digg, is software that controls the elastic-supply cryptocurrency called the DIGG token, pegged to the price of BTC in US dollars. Like any other token, DIGG can be deposited in SETTs to provide a return to its holders and used in DeFi protocols.
The decentralized Ethereum protocol Ren creates tokens that monitor the value of non-Ethereum assets such as Bitcoin and provide liquidity to projects across multiple blockchains. That said, Bitcoin holders can use Ren (needed to pay for nodes) to access Ethereum’s suite of DeFi products without selling their BTC or moving their assets across blockchains.
The Ren VM keeps original funds in storage, accepts tokens from one blockchain, and generates new tokens on another via its RenBridge to exchange assets between blockchains. For example, a user can submit BTC to RenVM, which would issue renBTC, a new token on Ethereum that mirrors the original Bitcoin, meaning that when the user wants their Bitcoin back, the transaction can be rolled back.
The Liquid Network is a bitcoin layer 2 solution and inter-exchange settlement network that enables the issuance of digital assets such as security tokens, stablecoins, and other financial instruments privately and quickly across the board. above the bitcoin blockchain.
LBTC, a wrapped version of Bitcoin, serves as a native token on the Liquid sidechain. Users send BTC to a Lightning Network address (a process called a peg-in) on the Bitcoin network to use the Liquid Network. A similar amount of LBTC is minted on the liquid network and delivered to the user’s address after the transaction receives 102 confirmations.
Additionally, the peg-out can be initiated to withdraw BTC by sending LBTC for burning to an unrecoverable address, which, upon receiving two separate confirmations, allows a member of the Lightning Network to send the BTC to origin to a user’s bitcoin network address.