Redux – Bitcoin Markets
A money market is a short-term lending system. Borrowers tap it for the cash they need to operate from day to day. Lenders use it to put spare cash to work
We are going through a cleansing of the entire crypto market and we have witnessed a cyclical collapse in our industry similar to what happened in 2018.
If your remember in 2018 Bitcoin skyrocketed to $20000 and then fell back down to $3500. I remember starting a core Bitcoin position at that time while we were in discussions with centralized exchanges about listing a token. One in particular that stands out in my memory was IDAX based out of Mongolia which was supposedly backed by their government and was deemed safe and secure. Thousands of depositors lost millions as the CEO of the exchange ran away with the funds. IDAX wasn’t the only one, there was Dobitrade, Bit Z and Bit M and other obscure exchanges as they all scrambled to list as many altcoins as possible. Many centralized platforms disappeared and the top 10 exchanges on CMC looked very different than now.
Fast forward to 2022 where this time the industry evolved with the participation of institutions and the rise of billion $ centralized platforms that enticed depositors with very attractive yields. These platforms became huge but they were not immune and became infected with the same fallacy of human nature as in 2018.
With billions in deposits it seemed unfathomable that they could go down but size I have found is not preventive medicine for greed. It doesn’t matter the time or age, human nature will always remain the same. Cycles of greed and fear will always permeate the market. Crypto especially.
Centralized platforms can be trusted if there is regulation, we do live a time where most things are controlled by policy. But, that time of trust in our governments and institutions is now over.
Long live Bitcoin
I am of the belief that all centralized powers eventually will become corrupted and that is why Bitcoin is so important. Regulation is going to help to a certain degree but in the case of Celsius the laws are not built to protect the depositors. The investors stand ahead of them in the queue.
This pattern of boom and ponzi busts will happen over and over again and that is why projects like BTC Proxy become even more relevant as we build to address the cause of these centralized failures.
UST a manually managed algorithmic stablecoin, FTX, Gemini Earn, Genesis, Blockfi, Celsius, Voyager and soon to be Nexo are all centralized examples.
Make no mistake about it, it will happen again in the next cycle.
There’s a misconception that DeFi failed.
It’s CENTRALIZED finance that failed — start-up banking entities like Celsius got over-leveraged.
DECENTRALIZED finance protocols worked great — all functioned flawlessly 24x7.
Dan Morehead — CEO Pantera https://panteracapital.com/blockchain-letter/defi-worked-great/
The effect of these centralized platforms have eroded the trust of our entire industry: Bitcoin, Decentralized Finance, NFTs, Mining, everything has suffered.
So what have we learned this time around?
Algorithmic Stablecoins Do Not Work.
Terra Luna and UST an algorithmic stablecoin, wasted billions of BTC trying to save peg. Might as well saved that BTC to pay back holders instead of selling the entire reserve in an futile attempt that brought the price of BTC down with it.
Centralized Platforms are not the place to earn Yield
FTX, Celsius, Gemini Eern, BlockFi and now Nexo, these self proclaimed ‘decentralized’ banks are essentially centralized entities using crypto as their vehicle. Over leveraged as they attempted to pay back the yields for their depositors they got liquidated and lost everything for everyone. The recipe is the same, these platforms tout a lot of clout with prestigious names and AUMs and fancy front end websites but nakedly they are nothing but ponzi’s in the backend.
Where does Bitcoin go now?
Redux — The Bitcoin Money Market
At Proxy we have been working hard since our launch in Mid 2021 to create a decentralized solution to do exactly what these centralized platforms could not which is to have everything done transparently on-chain and allow Bitcoin to mingle with DeFi. Bitcoin will become interoperable within a borrowing/lending protocol and fill a big gap that these entities left wide open.
Even RenBTC is no longer at this party.
A Trustless solution for Bitcoin holders is coming that does one better than the AA incumbents allowing for the direct participation of BTC.
“When you remove trust from the equation and rely purely on transparent lending standards executed by impartial computer code, you get a better outcome. This is the lesson to be learned,” Arthur Hayes Former CEO Bitmex
BTCpx token is the antithesis of an algorithmic stablecoin, it is 100% asset backed by BTC in custody and it’s insured against hacks and loss. BTCpx is the bridge for Bitcoin to participate in the Money Markets of Redux on Ethereum/Polygon/Binance
BTCpx Bridges Bitcoin to Redux allowing the seamless and cost effective transference of value in out of Bitcoin into money market pools on the three networks enabling participation within any DeFI protocol using USDC/BUSD with the key ability to redeem your Bitcoin when your finished.
Bitconers and liquidity providers will be able to supply borrowing and lending pools to earn interest and utilize their supply as collateral to borrow what will hopefully be deep pools of USDC/BUSD provided by institutional partners.
Interest earned by suppliers can never exceed interest paid by borrowers algorithmically ensuring cash flow can never be negative.
Redux has received commitments from institutions that will support the liquidity needs of borrowers
In the meantime as we build out the Bridge and Redux enjoy earning some BTC in our Bitcoin Farm. Simply stake our $PRXY governance token to earn your tier of fees generated from the bridge. You can Mint BTCpx and then Bond it for additional yields.
We are going to be in a period of quiet and low volatility similarly to mid 2019 which lasted 1 year post crash.
It is a good time to build and prepare for the next parabolic move. We thank all holders and believers and hope we can be a guide through your decentralized journey as we attempt to build the utility for one of the greatest financial inventions of our generation.
Long Live Bitcoin.
