BoringDAO 🌀— Why bBTC?
An Infrastructure Connecting Blockchain Assets and the DeFi World.
Today, we are going to talk about why we need $bBTC.
🤔Why we need 💲bBTC?
Recently, DeFi fever has drawn a lot of attention from both the crypto and traditional world. With few solutions available, BTC maxis, holding 18 million Bitcoins and more than 30 million addresses, can 💤barely do anything but watch the Ethereum DeFi 🎡carnival.
Therefore, BoringDAO🌀 aims to build decentralised 🌉bridges between Ethereum and other Blockchain assets. We offer the opportunity for non-ERC20 assets to maximize utility and the yield-generating effect.
There is no doubt that WBTC and renBTC are solutions that has been used the most. Nevertheless, it is hard to ignore their drawbacks⏬.
In the case of WBTC, they use BitGo as their 🏦custodian. Since BitGo is the only institution that holds users’ assets, there might be a chance of a single point of failure. What’s more, when users deposit BTC to BitGo, users have to undergo a complex process that might take days to proceed😤.
In the case of the Republic Protocol, it is a professional decentralised dark pool protocol and has a broader scope than the WBTC. Their smart contract is non-custodial for deposits and withdrawals. Although renBTC’s mechanism is eye-catching, it seems that the current development progress of renBTC is not as fast as expected. However, notably, its multi-signature is still managed by the team, ❌NOT DECENTRALISATION.
There can be multiple components in a project where trust is required, and the amount of 🤝trust needed can vary. For WBTC, the trust is centered around the BTC custodian. For renBTC and tBTC, a set of validators must coordinate in order to perform the necessary functions of a pegged system — namely mint, burn, and secure assets. They must reach a consensus on their collective actions, and the various approaches in reaching consensus result in different trust assumptions.
BoringDAO🌀 finds the equilibrium point of credibility. In BoringDAO, the Double-Pledge mechanism guarantees the value of bBTC.
1. 💵Assets Layer — Pledge equivalent BTC (original blockchain assets) in a designated multi-signature wallet (DAO governance)；
2. 📝Contract Layer — Pledge 100% (Long-Term goal)+ equivalent BOR and other Ethereum crypto assets (e.g. ETH & DAI) in “Tunnel.”
In other words, each bToken is backed by 200%+ assets bToken (= 100% equivalent original crypto assets + 100% equivalent BOR/other Tunnel pledge). Even if there is a 🖤Black Swan event (the underlying BTC is stolen; Although the probability is super low, we have to take it into consideration), then the assets of the contract layer can still provide 150% protection.
To ensure the security of the underlying assets, We adopted the following development plan.
- Version Ⅰ — 3 reputable institutions as custodians.
- Version Ⅱ — 7 custodians with higher community reputation and more considerable tunnel pledge amount through the node-election as well as reputable institutions.
- Version Ⅲ — 21 custodians through the Byzantine Fault Tolerance (BFT) + Delegated Proof of Pledge (DPOP).
- Version Ⅳ — Deploying Zero-Knowledge Proof to create an automatic and open screening mechanism to select credible custodians.
🙋Some people might ask: “what happens if BOR falls?” Even if BOR drops to 90% (the probability is still extremely low, since BOR is scarce and valuable), there is still 100%+100% pledge behind each bBTC. Its reliability is even greater than WBTC and renBTC because they are merely 100%. In other words, the safe lower limit of bBTC is equal to the upper limit of WBTC and renBTC.
It is not the first time that we have heard the community complaining about Minting WBTC and renBTC without any incentives, which further deters people who would have otherwise used their system.
Why incentives is so important?
There is simple logic:
- Incentives can undoubtedly increase TVL quickly and gather communities. In the DeFi field, this fact has been verified repeatedly.
- DeFi always accepts the tokens with the most strong commodities and high TVL as long as the underlying layer is sufficiently decentralised.
A typical example, 🍣Sushi not only brought in the LP Tokens of the ETH-USDT pair, but also welcome the most popular assets such as YFI, LINK, SNX, LEND, etc.
So, Incentives can also make a pegged coin quickly adopted by DeFi. Because pegged coin with incentives can bring high TVL and community.
General Rule in DeFi: Attractive Incentives ≈ 🧑🤝🧑More Users≈ 🔥Popular in other DeFi ≈ 📈Higher TVL
There are two kinds of incentives💸 in BoringDAO:
⛏Minting Mining: The minter will be charged by 0.2% of the minting fee but will be compensated by 0.4% in the value of BOR.
👨🌾Boring Farm: The Users who stake bToken, BOR, Pledge Token of BOR, and LP Token of bBTC/BOR-ETH Pairs, and even WBTC and renBTC (YES! we warmly welcome their migration and become bBTC) will be rewarded.
Currently, in WBTC or tBTC Network, there is no mechanism to support blockchain assets other than BTC. Through decentralised governance, BoringDAO supports native blockchain assets, such as BCH/BSV/LTC/XRP/EOS/TRX/ZEC/ALGO/DOT, etc.
BoringDAO🌀 well demonstrates DAO Governance.
The community can decide many things through referendum and proposals:
- 🏦Assets Custodians;
- 👨🌾Boring Farm Pools;
On the other hand, there are no other “bridge” projects that use tokens for adequate DAO community governance.
🤱Born for DeFi
BoringDAO🌀 believes that Decentralized finance will fundamentally change finance and reduce the frictional cost of finance.
💲bBTC is the first attempt at BoringDAO, which allows BTC to enter the Ethereum ecosystem.
🥅BoringDAO’s goal in the near future: Wrapping all assets to the Ethereum ecosystem.
🏆BoringDAO’s ultimate goal: Building bridges that connect all blockchains and different assets to migrate to any of the Blockchains.
Here is the Summary Table (Reference only. Made by Captain Tusk)
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