Bidao May Update 📄
Dear Bidao Warriors 🙋,
in this update, we will discuss the current state of the Bidao development and a bit about the TerraLuna situation and how it relates to the Bidao mission.
Bidao Development 💻
As you may know, Bidao is currently in the testing stage. In the last update, we showed you the Bidao yield farm that will make it possible for BID holders to earn additional rewards for holding BID. We received some important feedback from community members and our development team already implemented those improvements.
The development team is currently focused on optimizing the Bidao ecosystem on BSC. We are trying different collateralization schemes, parameters, and assets so that the stability of the system can be maintained during all possible market events. The recent events surrounding UST showed again how important it is to test and debug DeFi protocols. The current market downturn also gives us lots of opportunities to analyze market behavior so that we can work on mechanisms that safeguard our protocol from catastrophic market events. We are currently researching different mechanisms that can help stabilize the system during such black swan events, like risk factors for certain coins. This would mean that for low liquidity assets the collateral ratio would be higher than for the crypto blue-chips like Bitcoin and Ethereum.
Terra/Luna and other failed stablecoins 🔻
Our goal is that Bidao becomes the blue chip of stablecoins. Lots of stablecoins (UST, etc.) lost their peg during this bear market and we think it needs a stablecoin that can also work during hard times.
The problems of Terra have been manifold. One main problem of UST was that it has been backed by LUNA, because 1UST always was redeemable for 1USD of LUNA. So when the depeg of UST started, it was profitable to redeem for LUNA and sell LUNA for 1 USD on the open market. This started a devious cycle, because then also the selling pressure on LUNA escalates. Then, as the price of LUNA falls, the peg becomes harder to restore as users lose trust in the system. Another problem was the 20% yield on Anchor protocol for UST, which seemed too good to be true and increased the selling on UST.
Bidao works completely differently as there will be different collateral assets (BNB, ETH, BTC, USDC, etc.). BID is the governance Token but not the backing behind BAI. So this kind of negative feedback loop is not possible in the Bidao system. But we think it is now more important than ever to think about these stablecoin dynamics so that trust can be restored.
Bidao Verification 💚
As you may have seen, we have been verified on Youtube. We are very proud to have achieved this and this shows that the credibility of Bidao is growing.
We know that the current market and sentiment can be tough. We think now is the best time to focus on building!
Thanks to the community for all your support ❤️