Are you a BTC Hodler? Don’t miss additional + 35% BTC!
BTC holders are missing millions of dollars a year due to hodlers’ inactive behavior. More than 60% of all bitcoins have not moved in at least for a year, according to data from Glassnode.
Most BTC hodlers expect a much higher price for bitcoins, but at the same time they miss out the opportunity to get more bitcoins without stopping hodling.
The term “HODL” represents the behavior of die-hard bitcoin investors who chose to hold bitcoins with practically no intention of using or selling those coins.
With a current interest rate of 35%, if you hold 1 Bitcoin and do nothing with it, you lose an additional ~$3900 per year for every BTC you have. Significantly, yeah?
If you are a Bitcoin holder and want to earn more without losing control over your coins, the DeFi space is a great solution for you.
What is DeFi?
DeFi is an abbreviation of the phrase decentralized finance which generally refers to the digital assets and financial smart contracts, protocols, and decentralized applications (DApps) built on Ethereum. In simpler terms, it’s financial software built on the blockchain that can be pieced together like Money Legos.
Also noted that crypto entrepreneurs can recreate traditional financial instruments in a decentralized architecture, outside of companies’ and governments’ control. Learn more…
To get additional income, we need the following DeFi legos.
Balancer¹, RenBTC², sBTC³, WBTC⁴, Paraswap⁵
First of all, you need any bitcoin substitutes on the ethereum network (renBTC, WBTC, sBTC).
You can use any centralized exchange to buy RenBTC², sBTC³, WBTC⁴ or if you have ETH, DAI, USDT, etc you can use Paraswap⁵. Using Paraswap you will get the best exchange rates.
After you have Bitcoin substitutes, let’s proceed to the next step.
Every week 145,000 BALs, or approximately ~7,5M BALs per year, are distributed to liquidity providers.
There are 100 million tokens created but 25 million of them have already been allocated to the founding members, core developers, advisers, and investors. The rest tokens are free to be mined by Balancer users who add liquidity.
How to get a piece of this pie? ~$72M
This is done through BAL liquidity mining.
Liquidity mining has become one of the most popular topics of conversation in the space of decentralized finance (DeFi) recently. At its core, liquidity mining is essential when users supply liquidity of assets to a DeFi protocol in exchange for some kind of reward.
You can earn BAL tokens by placing liquidity in the balancer pools.
Since you want to keep the exposure in bitcoin, you need the following pools:
WBTC⁴/RenBTC² https://pools.balancer.exchange/#/pool/0xD7067192Df19C415ee35cc86708020EAf924CD75
WBTC⁴/sBTC³ https://pools.balancer.exchange/#/pool/0xb82302Df3525fCC73BB88175eda74eb28990185f
Or you can create your own pool with any proportions consisting of RenBTC², sBTC³, WBTC⁴
If you decide to create your own pool, I recommend creating it using RenBTC², sBTC³. Because strictly speaking WBTC⁴ is not a decentralized solution.
In addition to Balancer tokens, you will also receive part of the pool fees.
- Visit Balancer Pools and connect MetaMask Wallet, Portis or use WalletConnect.
2. Click Add Liquidity and Unlock both WBTC + renBTC. What you are doing here is approving the Balancer pool contract to use your deposited WBTC + renBTC tokens.
3. Make sure you have appropriate proportions of underlying tokens required to enter your chosen Balancer pool.
4. Choose how much WBTC + renBTC Liquidity you would like to deposit and confirm the transaction on your Metamask.
5. Enjoy + 35% APY for every Bitcoin. Every week you will receive BAL tokens to your wallet. You can check the current interest rates on http://www.predictions.exchange/balancer/
Also, don’t forget about trading fees you will collect :). It may be an additional source of income.
Stay tuned
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HodlTree is a second-generation decentralized lending protocol. Our mission is to provide significantly improved interest rates for ETH & BTC with a targeted rate of around 8–20% APY and expand the list of coins in the nearest future. We are developing a decentralized solution for cryptocurrency holders where they can earn money without losing control over their coins.
¹ What is Balancer?
The Balancer is an n-dimensional automated market-maker built on Ethereum. It allows anyone to create or add liquidity to customizable pools and earn trading fees. Instead of the traditional constant product AMM model, Balancer’s formula is a generalization that allows any number of tokens in any weights or trading fees. Another way to view Balancer is as an inverse ETF: instead of paying fees to portfolio managers to rebalance your portfolio, you collect fees from traders, who continuously rebalance your portfolio by following arbitrage opportunities. Learn more…
Bitcoin substitutes in DeFi (Ethereum)
² RenBTC
Any asset minted on Ethereum by RenVM is a 1:1 backed ERC-20. This means that if you have 1 renBTC (an ERC-20), you can always redeem it for 1 BTC. It’s a direct supply peg. renBTC isn’t synthetic, it doesn’t rely on a liquidation mechanism, and it’s not the price of Bitcoin on Ethereum. It is a one to one representation of Bitcoin on Ethereum that can be redeemed for BTC at any time, in any amount. More…
³ sBTC
Synths are tokens that provide exposure to assets such as gold, Bitcoin, U.S. Dollars, TESLA (coming soon), and AAPL (coming soon) within the Ethereum blockchain.
sBTC is non-custodial, meaning you don’t have to trust whoever is holding it
sBTC is a programmable ERC20 token, so it can do all kinds of things that only Ethereum can offer
sBTC allows on-chain trading pairs against Bitcoin
Synthetix is a decentralized platform on Ethereum for the creation of Synths: on-chain synthetic assets that track the value of real-world assets. Born as stablecoin project Havven, Synthetix rebranded and expanded its scope prior to launching on mainnet in February 2019. As of March 2020, the Synthetix platform supports over 30 Synths representing fiat currencies, commodities (e.g., gold), and crypto-assets.
⁴ WBTC (not DeFi)
Wrapped Bitcoin (WBTC) is an ERC-20 token backed 1:1 by Bitcoin and held at Bitgo Trust, and the underlying holdings are verifiable here. WBTC brings the liquidity of Bitcoin to the Ethereum ecosystem.
⁵ What is Paraswap?
Paraswap is a decentralized exchange aggregator that provides the best prices over multiple DEXs on the Ethereum blockchain. More…Disclaimer
The Content is for informational purposes only, you should not consider any such information or other material as legal, tax, investment, financial, or other advice.
References:
https://renproject.io/
https://paraswap.io/
https://balancer.finance/
https://www.coindesk.com/
https://glassnode.com/
https://www.synthetix.io/
https://wbtc.network/
http://www.predictions.exchange/balancer
https://defipulse.com/
