INTRODUCTION
Bitcoin network is, as is already known, peer-to-peer electronic cash system without native Smart contract functionalities, so Decentralized Finance (DeFi) in a way that is native to other networks is not straight-forward for it, nevertheless with surge in DeFi amounts locked in other networks, there are some developments to provide DeFi service on Bitcoin network as well
DEFINITION
Decentralized Finance, or DeFi, present term for all financial application within decentralized applications that have aim to disrupt financial intermediaries’ services from between user interaction. First thing when thinking on DeFi are Decentralized exchanges, that provide exchange services directly from the wallet, without intermediary, on pairs that are supported by Liquidity pools on those exchanges. Liquidity providers are rewarded for their involvement in the process, with transaction fees, same as centralized exchanges and possible incentive to provide liquidity on certain Decentralized exchange, which is not subject of this topic.
BTC WRAPPED ON OTHER NETWORKS
At the moment, BTC holders can provide liquidity on other networks, through token wrapping, which is the process of wrapping BTC for equivalent amount of wrapped BTC’s in certain protocol, that can be used for liquidity provision and interest from transaction fees can be taken on this wrapped BTC.
Currently there is several options for wrapped BTC’s, with WBTC as most used and almost 250 million market capitalization, currently on top 2 spot on DeFi lists, just behind ChainLink, which puts it as most tokenized asset in DeFi, below is the graph for total BTC wrapped on Ethereum DeFi, and wBTC on DeFi.
There is also 15k BTC wrapped on Tron network, which is not negligible, since it is 10% from amount on Ethereum.
https://en.ethereumworldnews.com/the-tron-trx-network-now-hosts-15k-wrapped-bitcoin/SOLUTION FOR DeFi on BTC
Since it is not natively possible, there was needed a solution for DeFi on BTC, and RSK is providing smart contract functionality for DeFi on BTC, by incorporating Bitcoin-based solution in open finance, with two main ecosystems – MoneyonChain and RIFonChain – with later being RSK own DeFi ecosystem.
RSK blockchain follows all Bitcoin related Open finance projects, and provide information on all of them at one place, more on a link -
https://blog.rsk.co/noticia/open-finance-defi-rsk-a-definitive-guide/Regarding the number of BTC on RSK blockchain, there is something above 300 BTC locked, which is hardly a fraction from total BTC value locked on DeFi protocols on other networks, and immerse potential for growth
There is a few solutions for that will be mentioned here:
1. MoneyonChain / TEX
MoneyonChain provide Bitcoin Stable-coin, that one can use with Nifty wallet or Metamask and operate Token Exchange TEX
https://moneyonchain.com/how-to-defi-for-bitcoin/2. Defiant
Defiant provide non-custodial wallet that supports DoC (DollaronChain from MoneyonChain) and geolocation, made for direct transactions between local users, based on their geolocation, provided for iOS and Android platforms.
https://defiantapp.tech/3. RSK Swap
RSK Swap is Uniswap fork that is adopted for RSK blockchain, that is not officially accepted by Uniswap, that is working with Wallet Connect. Interface is completely similar and familiar from Uniswap. Supports RBTC and DoC.
4. Sovryn application
Sovryn is probably the most complete application for RSK blockchain, with trade, lend, borrow and swap functionalities, still in test phase, with maximum transaction of $21, that will be raised to $210 in near future. Supports WalletConnect and Portis.
Current state of supplied assets to Sovryn is given on an image below, and should be considered with $21 limit in mind.
