In addition to wBTC, Stacks and Rootstock, BadgerDAO, RenVM and Liquid Network promote various Bitcoin DeFi use cases.
BadgerDAO
A decentralized autonomous organization (DAO) called BadgerDAO makes BTC usable as collateral in various DApps. BadgerDAO uses the Ethereum-based token BADGER for protocol governance and incentive distribution.
Users can earn income from synthetic BTC assets using Sett Vaults, the first product offered by Badger. Users can lock tokenized Bitcoin in SETTs, which pools tokens, and let smart contracts manage ownership to generate in the form of bTokens.
Badger’s second product, called Digg, is software that controls an elastic supply digital currency called DIGG tokens, which is linked to the price of BTC in the United States dollar. Like other tokens, DIGG can be stored in SETTs to provide results to the holder and be used in the DeFi protocol.
RenVM
The decentralized Ethereum protocol Ren creates a token that monitors the value of non-Ethereum assets such as Bitcoin and offers liquidity for projects on multiple blocks. That said, Bitcoin holders can use Ren (need to pay nodes) to access various DeFi Ethereum products without selling BTC or moving assets on the blockchain.
The Ren virtual machine holds original funds in storage, receives tokens from one blockchain, and generates new tokens on another via RenBridge to exchange assets between blockchains. For example, a user can send BTC to RenVM, which will issue renBTC, a new token on Ethereum that will represent the original Bitcoin, meaning that when the user wants to get Bitcoin back, the transaction can be reversed.
Liquid Network
The Liquid Network is a layer-2 Bitcoin solution and inter-exchange settlement network that allows the issue of digital assets like security tokens, stablecoins and other financial instruments privately and quickly on top of the Bitcoin blockchain.
LBTC, a packaged version of Bitcoin, is the native token on Liquid’s sidechain. Users send BTC to Lightning Network addresses (a process called peg-in) on the Bitcoin network to use the Liquid Network. The same amount of LBTC is printed on the Liquid Network and sent to the user’s address after the transaction receives 102 confirmations.
In addition, a peg-out can be initiated to withdraw BTC by sending LBTC to burn to an irreversible address, which, upon receiving two separate confirmations, allows Lightning Network members to send original BTC to the user’s Bitcoin network address.