Hold Bitcoin? Here’s how to implement it in DeFi

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The long-awaited day finally arrived on October 19 when the first Bitcoin (BTC) exchange-traded fund (ETF) went live on the New York Stock Exchange, propelling the crypto asset into the limelight of mainstream media and consumers. alternative media.

Despite the fact that the ETF in question will not hold real Bitcoin and instead is a futures-based instrument, investors and ecosystem experts have widely hailed its launch as proof that Bitcoin has reached the big picture. leagues and will soon exceed the coveted prize of $ 100,000. target.

Many investors do not have access or will choose not to interact with the newly launched EFT, but holders can still use a variety of strategies to earn a return on their BTC holdings.

Here is an overview of some strategies that BTC holders can use to earn a return.

DeFi meets BTC at BadgerDAO

BadgerDAO is an open source protocol built on the Ethereum network that has the specific objective of creating products and the infrastructure required to simplify the integration of Bitcoin into decentralized finance (DeFi).

Currently, BadgerDAO has the most comprehensive list of BTC matched pools where investors can provide liquidity.

BadgerDAO Bitcoin yield offers. Source: BadgerDAO

As shown in the above image of the BadgerDAO dashboard, there are different offers ranging from simple staking of Wrapped BTC (wBTC), which can generate a return ranging from 1.22% to 27.98% depending on the terms of the lock-up, staking in more complex liquidity provider (LP) strategies like the renBTC / wBTC / sBTC pool, which offers a yield ranging from 7.07% to 45.37%.

It is important to note that the encapsulation of BTC and RenVM comes with risks, as a user must give up control of the original BTC in order to obtain wBTC or renBTC, by violating the crypto code of “not your keys, not your crypto “.

For LP tokens that combine BTC with other cryptocurrencies such as Ether (ETH), BADGER or stablecoins like Tether (USDT) and USD Coin (USDC), holders should also consider the possibility of incurring a temporary loss. if the price of Bitcoin increases by a significant amount compared to the other token with which it is associated.

Trader Joe

Trader Joe is the largest Locked-In Total Value (TVL) decentralized trading platform on the Avalanche network, according to data from Defi Llama, with $ 2.18 billion in assets currently on the protocol.

Bitcoin-related pools on Trader Joe’s. Source: Trader Joe

Using wBTC on the Avalanche network requires another layer of packaging that produces wBTC.e, which can then be traded over the network or used to provide liquidity.

At the time of writing, Trader Joe is offering a return on three LP tokens, including a return of 26.223% for the wBTC.e / AVAX pair, 16% for the wBTC.e / USDC.e pair and 11.9% for the pair pair wBTC.e / USDT.e. All rewards are paid into the protocol’s native JOE token.

Raydium

Raydium is the highest ranked DeFi protocol on the Solana network, according to data from Defi Llama, and currently has a TVL of $ 1.77 billion.

Users who wish to use their BTC on Solana have the option of pairing it with USDT, USDT, Serum (SRM), and an enveloped form of Solana known as mSOL.

Pools linked to Bitcoin on Raydium. Source: Raydium

The returns offered range from 5.16% to a high of 14.27% with all rewards paid into the platform’s native RAY token.

CrepeSwap

PancakeSwap is the # 1 ranked protocol by TVL on the Binance Smart Chain (BSC) with data from Defi Llama showing that $ 5.39 billion in tokens are currently locked to the protocol.

In order to use Bitcoin on the BSC, it must first be encapsulated to become BTCB, which can then transact on the network.

Bitcoin-related pools on PancakeSwap. Source: PancakeSwap

Currently, PancakeSwap offers a yield of 5.44% for the BTCB / ETH pair, a return of 15.82% for the BTCB / BUSD pair (Binance’s stablecoin, Binance USD) and 20.79% for the BTCB / BNB pair. All rewards are paid into the protocol’s native CAKE token.

Related: Valkyrie Bitcoin Futures ETF Launches On Nasdaq, Stock Price Falls 3% In First Hour

Decentralized Bitcoin Futures

DYdX is a decentralized perpetual futures trading platform that made waves in September when it dumped thousands of dollars from its native DYDX governance token to early users of the platform.

Similar to the ProShares Bitcoin Strategy ETF, transactions made on the dYdX protocol do not settle in real Bitcoin, but rather in a USD stablecoin, so BTC investors may not be overly interested in the protocol if the only one goal is to directly increase Bitcoin holdings.

However, unlike trading a government-regulated futures product which is only available when traditional markets are open, dYdX offers the decentralized 24/7 trading environment that crypto loyalists have. learned to love.

Want more information on trading and investing in the crypto markets?

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move comes with risk, you should do your own research before making a decision.

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