Polkadot BTC Wrappers

in LeoFinance2 months ago (edited)

After my recent accident with the BSC DeFi-ish shit rugpull I'd like to make a note about a more perspective thing -- namely, Bitcoin wrappers on Polkadot.

I've already told several times somewhere that I suspect the ETH-based DeFi is mostly done, primarily because of insane fees. The most hyped the next DeFi thing seems to be Polkadot. Indeed, Polkadot is still in the testing phase and has really working competitors (e.g. BSC), but it promises a lot more too. BTW, last September I've already mentioned my then experience with Polkadot-based coins

I'm pretty dumb technically and I don't really know how Polkadot things actually work. For me, Polkadot is similar to "wrapped tokens" (wETH, wBTC, etc.), only better -- because it is expected to be faster, simpler, cheaper, more secure, more universal, and more versatile (i.e. it will allow creating better DEXes and DeFis). One system to jerk them (the cryptocurrencies) all, so to say. Of course, I can't guarantee that, but that's what is expected. And that's why Polkadot-based projects go pumped hard these days.

Right now I would point at two Polkadot projects that interest me the most -- ChainX and PolkaBTC. Both projects are "BTC Layer 2", i.e. they aim to create Polkadot-compatible Bitcoin wrappers.

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Pretty soon many addresses will hold shitloads of "digital gold". The problem is that "digital gold" per se doesn't generate any profit. It's not even possible to take an overcollateralized loan against "digital gold" per se, at least in a secure trustless decentralized way, you have to "wrap" your "gold" first. So, to make profits the BTC hodlers will need either to pump BTC price further and further up or to find a way to put their idle BTCs at work, in a secure, fast and inexpensive way. In other words, I'm again talking about my idée-fixe of BTC DeFi.

(ChainX & PolkaBTC) = BTC + Polkadot DeFi

ChainX is actually one of the very first Polkadot projects, it was launched years before the DeFi and Polkadot hypes. Unfortunately, I can't say how ChainX wrapper works technically, you'd better consult their whitepaper for that. But I can say that ChainX is a real working system in the sense that it has already been tested with real BTC. PCX coin is trade-able, it's possible to play with it and get real profits (or losses).

PolkaBTC is a new project launched in 2020. As far as I could understand, it currently lives on a test-net only and has no trade-able coin yet. The project has recently got a Web3 grant, though.

Again, I don't tell which project is "better" technically and which coin to buy speculatively. I only tell that such projects exist and personally I would expect a somehow bright future for them.

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I've already told several times somewhere that I suspect the ETH-based DeFi is mostly done

I'm surprised it has done so well with all the high gas fees, that is the main reason I never held a bunch of it. I figured EOS or Hive would have taken a much bigger piece the pie by now.

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ETH gas fees are not so important for those who already have a lot of ETH. But they kill the newcomers who have to buy ETH for USD now.
I'm not sure that Hive can do DeFi. However, maybe just nobody tried it yet.

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