Posted 12 months ago | by Ben Armstrong
Two Projects Develop Defi Solutions for Bitcoin
Developers are working on platforms to leverage BTC’s network and create decentralized finance (defi) solutions. These new platforms have become popular on the Ethereum blockchain over the last two years.
DeFi applies the same ideas that we find in the established financial system to decentralized money systems. While Ethereum has numerous existing DeFi platforms, Bitcoin's blockchain isn't built to work with these systems, and development has been slower.
Bitcoin DiFi Solutions
Atomic Loans is a project that offers a noncustodial bitcoin-backed stablecoin solution. Developers are working to create defi projects by using BTC’s blockchain and lend stablecoins.
The website, called 'atomic.loans' is looking to offer DeFi on the BTC chain by providing people with the ability to leverage cross-chain collateralized loans. Individuals are allowed to borrow ETH-based stablecoins with the ability to lock in BTC as collateral by users.
The Atomic Loans project’s Github repository states:
“In case of default, the collateral is liquidated to make the lender whole. As a fallback for failed liquidations, the lender can eventually seize a portion of the collateral.”
The Atomic Loans project has been supported by well-known investors, such as Initialized Capital and Morgan Creek Digital. According to an April 14 announcement, the team stated there was $2.5 million in seed funding which was raised from Initialized Capital and other venture capital investors to the project.
The Atomic Loans project has launched on mainnet, and the code is open source for anyone to review.
Other Developers in the Sapce
Another project is the Money on-chain project, which built on RSK protocol, and it also offers a stablecoin token. The website moneyonchain.com says that a stablecoin and leveraged token are designed by using a Rootstock or RSK-based (RIF) smart contract.
The project uses BTC as a base of value. It currently allows people to access the Money on-chain protocol on its mainnet and study the project’s claimed benefits.
“We provide a Bitcoin-collateralized stablecoin,” the website states. “Our Bitcoin-collateralized stablecoin uses a trustless, decentralized two-token system.”
According to the project, a BTC-collateralized stablecoin can minimize counterparty risk, since the stable token ‘DOC’ is attached to the RSK network’s RBTC for collateral. The RBTC token, an RSK network token, which is attached to BTC 1:1 and is convertible at any time.
Money on chain’s token dollar on chain (DOC) is an RRC20 token, according to white paper note, that is “pegged to the U.S. dollar for risk-averse individuals.”