Holding Bitcoin? Here’s how to put it to work in DeFi

The long-awaited day lastly got here on Oct. 19 as the primary Bitcoin (BTC) exchange-traded fund (ETF) went reside on the New York Stock Exchange, thrusting the crypto asset into the limelight throughout mainstream information retailers and different media alike. 

Despite the truth that the ETF in query will maintain no precise Bitcoin and is as an alternative a futures-based instrument, buyers and pundits throughout the ecosystem have largely hailed its launch as proof that Bitcoin has hit the massive leagues and can quickly surpass the coveted $100,000 worth goal.

Many buyers both don’t have entry or will select not to work together with the newly launched EFT, however holders can nonetheless use quite a lot of methods to earn a yield on their BTC holdings.

Here’s a have a look at some methods BTC holders can use to earn a yield.

DeFi meets BTC in BadgerDAO

BadgerDAO is an open-source protocol constructed on the Ethereum community that has the precise purpose of constructing merchandise and the required infrastructure wanted to simplify the mixing of Bitcoin into decentralized finance (DeFi).

Currently, BadgerDAO has probably the most intensive listing of BTC paired swimming pools the place buyers can present liquidity.

BadgerDAO Bitcoin yield choices. Source: BadgerDAO

As seen in the picture above from the BadgerDAO dashboard, there are completely different choices from the easy staking of Wrapped BTC (wBTC), which may earn a yield starting from 1.22% to 27.98% relying on the phrases of the lockup, to the staking in extra advanced liquidity supplier (LP) methods just like the renBTC/wBTC/sBTC pool, which presents a yield starting from 7.07% to 45.37%.

It is necessary to observe that there are dangers concerned with wrapping BTC and RenVM as a result of a consumer should relinquish management of the unique BTC in order to get hold of both wBTC or renBTC, violating the crypto code of “not your keys, not your crypto.”

For LP tokens that pair BTC with different cryptocurrencies reminiscent of Ether (ETH), BADGER or stablecoins like Tether (USDT) and USD Coin (USDC), holders should additionally contemplate the opportunity of struggling an impermanent loss if the value of Bitcoin will increase by a big quantity in contrast to the opposite token it is paired with.

Trader Joe

Trader Joe is the most important decentralized buying and selling platform by whole worth locked (TVL) on the Avalanche community, in accordance to data from Defi Llama, with $2.18 billion price of property at present on the protocol.

Bitcoin-related swimming pools on Trader Joe. Source: Trader Joe

Using wBTC on the Avalanche Network requires one other layer of wrapping that produces wBTC.e, which may then be traded on the community or used to present liquidity.

At the time of writing, Trader Joe is providing a yield on three LP tokens, together with a return of 26.223% for the wBTC.e/AVAX pair, 16% for the wBTC.e/USDC.e pair, and 11.9% for the wBTC.e/USDT.e pair. All rewards are paid out in the protocol’s native JOE token.


Raydium is the top-ranked DeFi protocol on the Solana community, in accordance to data from Defi Llama, and at present boasts a TVL of $1.77 billion.

Users who want to use their BTC on Solana have the choice of pairing it with USDC, USDT, Serum (SRM) and a wrapped type of Solana generally known as mSOL.

Bitcoin-related swimming pools on Raydium. Source: Raydium

The yields provided vary from 5.16% to a excessive of 14.27%, with all rewards paid out in the platform’s native RAY token.


PancakeSwap is the No. 1 ranked protocol by TVL on the Binance Smart Chain (BSC) with data from Defi Llama displaying that $5.39 billion price of tokens is at present locked on the protocol.

In order to make the most of Bitcoin on the BSC, it should first be wrapped to turn out to be BTCB, which may then transact on the community.

Bitcoin-related swimming pools on PancakeSwap. Source: PancakeSwap

At current, PancakeSwap is providing a 5.44% return for the BTCB/ETH pair, a 15.82% return for the BTCB/BUSD pair (Binance’s stablecoin, Binance USD) and 20.79% for the BTCB/BNB pair. All rewards are paid out in the protocol’s native CAKE token.

Related: Valkyrie Bitcoin futures-linked ETF launches on Nasdaq, with share costs dropping 3% in first hour

Decentralized Bitcoin futures

DYdX is a decentralized perpetual futures buying and selling platform that made waves again in September when it airdropped 1000’s of {dollars} price of its native DYDX governance token to early adopters of the platform.

Similar to the ProShares Bitcoin Strategy ETF, trades made on the dYdX protocol don’t settle in precise Bitcoin however as an alternative in a USD stablecoin, so BTC stakers might not be too in the protocol if instantly rising Bitcoin holdings is the one purpose.

However, as opposed to buying and selling a government-regulated futures product that is solely out there when the standard markets are open, dYdX presents the decentralized, 24/7 buying and selling surroundings that the crypto trustworthy have grown to love.

Want extra details about buying and selling and investing in crypto markets?

The views and opinions expressed right here are solely these of the creator and don’t essentially replicate the views of Cointelegraph.com. Every funding and buying and selling transfer entails threat, you need to conduct your individual analysis when making a choice.

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