BadgerDAO partners with Lido to launch Bitcoin-pegged stablecoin

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BadgerDAO, a outstanding participant within the Bitcoin (BTC) decentralized finance (defi) sector, has introduced a partnership with Lido, a premier supplier of liquid staking options on the Ethereum community.

In accordance with a press launch shared with crypto.information, a brand new eBTC system has launched providing customers the power to safe loans with out encountering any curiosity, compensation, or initiation charges. As an alternative, the protocol makes use of the Ethereum collateral by staking it with Lido to generate staking rewards, which doubtlessly provides a less expensive borrowing choice.

The protocol goals to reinforce current wrapped Bitcoin property by leveraging staked ETH (stETH) from Lido and concurrently introduce an method to collateralization that removes the need of cross-chain bridges.

Along with addressing dangers linked with bridges, eBTC offers customizable collateralization ratios and implements mechanisms to liquidate positions ought to the collateral worth dip beneath the required threshold, set at a minimal of 110%.

The partnership additionally contains an incentive program provided by Lido’s Liquidity Commentary Lab (LOL), granting further stETH rewards to early adopters of eBTC, per the press launch. These rewards are designed to be distributed with out charges, additional motivating early engagement.

Lido dominates the staking scene on Ethereum as the biggest liquid staking protocol, boasting a TVL of $35.12 billion, per DeFi Llama information. In the meantime, BadgerDAO, with $3.5 billion in BTC deposits, leads the Bitcoin defi sector. 

Regardless of the modern method, customers nonetheless cope with inherent challenges and dangers inside artificial stablecoins and the broader defi ecosystem. Regulatory ambiguity, counterparty threat, and volatility stay vital issues. 

The defi market has encountered vulnerabilities comparable to sensible contract exploits and market manipulations, jeopardizing the steadiness and safety of protocols. As an example, SushiSwap suffered a $3.3 million loss as a consequence of a wise contract incident final April. In 2022, the defi sector experienced a complete of $2.7 billion in losses from sensible contract hacks.

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