Till lately, the vast majority of Bitcoin (BTC) lending passed off on centralized platforms. This was predominantly due to the cumbersome course of concerned in tokenizing Bitcoin right into a wrapped ERC-20 model earlier than it could possibly be deposited on the Ethereum (ETH) community.
The ensuing implication of this inconvenience was not simply the extra transaction charges and slippage incurred however a fragmented decentralized finance (DeFi) ecosystem. Presently, just one% of Bitcoin is circulating on Ethereum.
BiFi is a platform that facilitates actual Bitcoin lending on DeFi by connecting the Bitcoin and Ethereum networks immediately. The platform describes itself as “like Compound or Aave, however with actual, native Bitcoin.” As an alternative of going by means of the method of wrapping their Bitcoin, customers can use their native BTC from their Bitcoin pockets to lend and borrow ERC-20 property.
With BiFi’s native Bitcoin lending service, Bitcoiners can interact with DeFi protocols with out the necessity for third-party custodians and retailers. In eliminating the necessity for wrapped BTC, BiFi expects “a large inflow of BTC holders into DeFi” that can form the way forward for the business.
Multichain lending with most safety
BiFi claims to have been designed with a “security-first mindset.” Utilizing BIFROST’s multichain expertise and a mixture of cryptographic proofs, BiFi ensures the safety of its protocol.
The important thing facet right here is the truth that the Bitcoin and Ethereum networks are related immediately. Each these blockchains have already got numerous nodes guaranteeing their computational integrity.
“We construct cryptographic proofs to confirm the accuracy of transactions that occurred on the Bitcoin community and confirm it on-chain on Ethereum good contracts. It might be dearer to carry out on-chain verifications, however this computational integrity method is essentially the most safe manner up to now,” mentioned BiFi in a blog post.
The platform additionally makes use of fraud proofs to confirm that the actions of the relayer are appropriate. It does this by creating cryptographic proofs and verifying them on-chain.
A DeFi future with out fragmented liquidity
Since its launch in January 2021, BiFi’s Complete Worth Locked throughout staking, lending and pooling companies has crossed $219 million. The platform additionally has a flash loan-based leveraged yield farming and buying and selling service — BiFi X.
“Connecting Bitcoin and Ethereum community is a large step ahead. But BIFROST will join extra networks and BiFi will supply lending and monetary companies to increase the DeFi ecosystem to show DeFi into future finance,” commented Dohyun Pak, the CEO of BiFi and BIFROST.
The venture’s subsequent launch shall be a multichain pockets, which it expects to launch in Q3 2021. Customers will be capable to retailer BTC, ETH, BNB, ERC-20 tokens and BEP-20 tokens.
In 2022, BiFi goals to increase to extra networks for multichain DeFi lending from EVM to non-EVM. By a “Multichain Dev Suite,” builders will be capable to function DApps amongst all cross-EVM and non-EVM networks, increasing the multichain DeFi ecosystem.
Finally, BIFROST envisions a future with out remoted capital markets on quite a few chains. To make this occur with the primary aim of fixing certainly one of DeFi’s greatest challenges – interoperability – the venture permits capital to move freely between blockchains with none wrapping, bridging or custodians. Constructed upon its “Common Multichain Middleware,” BiFi is the multichain DeFi platform that won’t isolate capital markets on quite a few chains.
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