TL;DR
Whether you are a Bitcoin Holder or not, you would have to spend 5 minutes getting to know this project that may change Bitcoin’s future. Suppose you are not only a holder, but also a Maximalist. In that case, congratulations, the Bitcoin you love is about to regain everything it has lost (for example, Bitcoin Dominance).
BoringDAO is a project whose name may sound boring, but some of the most exciting work is currently going on. BoringDAO is a cross-chain compatible, decentralized asset protocol, and its most important product is bBTC (BoringBTC). They provide Bitcoiners the access to all the different Defi.
We need programmable Bitcoin
Even though scalability and safety allow Bitcoin to become the most popular cryptocurrency, a programmable Bitcoin is still what the community has long expected. The community is eager to use $BTC to participate in the MakerDAO’s collateral or be freely exchanged with other Cryptos in the Uniswap.
There are already some pioneers in the ‘race’: WBTC & renBTC. According to the latest data (03/10/2020, https://debank.com/ranking/btc), the number of WBTC on Ethereum has reached 92,583, while renBTC is 23,855. Even though the TVL seems relatively high, compared to the total number of Bitcoin (18,505,343), it only occupies 1/154 of the total $BTC. In other words, even if the APY is 100%-10000% in DeFi, merely less than 0.6% of Bitcoin enters the Ethereum network through the above two gateways.
Why? The reason is simple: People need a safer and more decentralized way.
In WBTC, BitGo is the only custodian. Since BitGo is the only institution that holds users’ assets, there might be a chance of a single point of failure. In terms of renBTC, they proposed a brilliant idea: renVM. But renVM are still in the sub-Zero stage; therefore, it seems that the team manages these Bitcoin at now.
What will BoringDAO do?
BoringDAO proposed a “double pledge mechanism.” Each Bitcoin is backed by more than 200% of assets, including one real Bitcoin (multiple reputable institutions manage Multi-sig). The approximately equivalent value of ERC-20 assets is locked in the contract layer (governed by smart contracts).
There is no doubt that 200%>100%, so bBTC maybe much safer.
Once the underlying assets of other wrapped BTC have issues, its wrapped token will be in danger. However, in BoringDAO, even if there is a black swan event, the contract layer provides an additional protection
Many people would ask: How about the capital efficiency of BoringDAO?
The answer is high.
The secret behind is our Double-Pledge mechanism:
– BTC holders deposit BTC to mint bBTC through the bBTC Tunnel.
– All community members pledge $BOR/other ERC-20 tokens on the contract layers (100% Pledge ratio) to build a bBTC Tunnel.
Meanwhile, the BOR community and BTC holders will help each other:
-Pledge providers can increase the Tunnel’s capacity, enabling more bBTC to be minted through the Tunnel. In return, they can get 70% of