About IbBTC: Explained and simplified

DefiDollar has a couple of usecases aimed at solving the problems stablecoins have. Among one of those usecases is the IbBTC (Interest bearing Bitcoin). In this article I will be explaining further on this product and how it helps in DeFi.

What is IbBTC?

It is built in collaboration with BadgerDao. It solves the issue of not having a widely used interest bearing tokenied Bitcoin for DeFi.

How does it work?

The user journey is as follows:

  1. User Deposits Tokenized BTC into any of the following Curve Pools — renBTC, sBTC, tBTC
  2. The Curve LP tokens are deposited to the Badger Setts for Bitcoin yield
  3. The Badger Sett LP tokens are deposited to DefiDollar to obtain ibBTC

LP’s of the Badger Setts can proceed directly to Step 3 whereas others will need to follow the above mentioned steps.

How Interest is being made

  • Curve pool trading fee
  • Farmed CRV
  • Farmed Badger

Badger Vaults harvests the Curve trading fees and CRV periodically in its Setts. The trading fees from Curve along with the farmed Badger and CRV are being transformed back into the underlying.

As an example: 100 ibBTC minted using 100 bcrvRenBTC where 1 bcrvRenBTC = 1.03 underlying BTC Therefore 100ibBTC = 100 bcrvRenBTC = 103 BTC

After a while, after interest starts to accrue and 100 bcrvRenBTC = 1.06 BTCThen the 100ibBTC will be worth 106 BTC

Please note that initially ibBTC will be collateralized with any of bcrvRenBTC, bcrvRenWBTC, b-tbtc/sbtcCrv.

DefiDollar in View

The collaboration with BadgerDAO that gave birth to ibBTC has greatly increased DefiDollar’s TVL, establishing it as a critical DeFi infra instrument. This has also sparked discussion about more such projects among DeFi’s top teams.

To roll out the interest-bearing Bitcoin solution on Polygon, there will be three stages to complete:

  • Introducing the interest-bearing Bitcoin solution on Polygon with an incentive to leverage the BTC bridge.
  • Build deep liquidity pools on SushiSwap for ibBTC/WBTC, creating cost-efficient swaps with Wrapped Bitcoin. This approach also gives way to optimal yield farming strategies involving BTC on Polygon..
  • Future deployment of ibBTC after the Badger Bridge and Sett launches have been completed.

More About IbBTC

It will be a native asset on widely used side chains. At launch, theywill simultaneously launch Setts on BSC and Polygon. These will be Pancakeswap and Quickswap pools with 100% auto compounding rewards — maximizing user’s potential yield!.

For more information check them at the links below :

Telegram details :

Doc: https://app.dusd.finance/

Twitter: https://www.twitter.com/@defidollar