The purpose of BoringDAO's bBTC is very similar to any other Synthetic Bitcoin: to open Ethereum's decentralized finance to Bitcoin's HODLers. Blockchain project BoringDAO raised $ 1,5 million from Asian investors to build bBTC, a synthetic derivative of Bitcoin that carries the coin to Ethereum, preparing it for decentralized finance. The characteristic that differentiates bBTC is that it has double the guarantees of other similar currencies.
The BoringDAO Blockchain
BoringDAO is a blockchain that perhaps takes inspiration, unrelated to it, from Elon Musk's Boring Company, which shook up the technology by building a tunnel under LA and selling flamethrowers.
For bBTC, BoringDAO has received investments from eight crypto-focused VCs, including DeFiance Capital, HASHKEY and Youbi Capital. Most of the investors are based in Singapore. bBTC is very, very similar to projects like tBTC or renBTC, other protocols where you can deposit Bitcoin and receive an Ethereum-based version of Bitcoin in return.
bBTC is also similar to Wrapped BTC (wBTC), a synthetic Bitcoin product that holds 73% of the market share. Importantly, bBTC, like tBTC and renBTC, are non-custodial, while the blockchain company BitGo holds your Bitcoin as it is traded for wBTC.
Wrapped BTC, by the way, has just passed $ 1 billion in market capitalization. Bitcoin in circulation in the Ethereum market stands at around $ 1,3 billion, according to data from Dune Analytics.
Bitcoin on Ethereum
The idea of all these tokens is to bring Bitcoin to Ethereum to get the most out of Ethereum-specific decentralized finance protocols. Also known as DeFi, decentralized finance refers to non-custodial lending protocols, exchanges and other synthetic derivatives such as stablecoins, into which investors have poured in about $ 10 billion since June, according to DeFi Pulse.
All of these protocols are hosted on Ethereum and do not allow bitcoiners to use their Bitcoin by lending it or investing it in liquidity pools. Hence the creation of protocols such as bBTC.
What bBTC puts into service is its “Double-Pledge” mechanism, which it claims protects the currency from cash runs. Here's how it works: You put your Bitcoin in the contract and then other community members earn commissions when they promise the equivalent in BOR, BoringDAO's native token, and other Ethereum-based tokens - here quotations in real time.
This presumably means that bBTC is backed by double the amount of tokens; even if the Bitcoin itself is somehow stolen, the protocol could repay its holders.
Those who promise guarantees also earn a lot of commissions and people can also bet on bTokens to earn one of the 20.000 BOR (from a so called “Boring Farm”).
