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Cryptocurrency News Articles

Badger Finance Eyes Recovery with eBTC, a Novel Bitcoin Lending Protocol

Mar 27, 2024 at 08:05 pm

Badger Finance has introduced eBTC, a novel Bitcoin lending protocol with zero interest rates. Utilizing Lido's stETH, users can collateralize Ethereum to borrow a yield-bearing Bitcoin-pegged stablecoin. This unique mechanism, backed by security audits and partnerships, aims to empower users and drive innovation within the DeFi ecosystem.

Badger Finance Eyes Recovery with eBTC, a Novel Bitcoin Lending Protocol

Will Badger Finance Regain Its Footing with eBTC?

Badger Finance is making a bold move with the launch of eBTC, a Bitcoin lending protocol offering 0% interest. Effective March 26, 2024, the protocol leverages stETH from Lido, allowing users to borrow a yield-bearing Bitcoin-pegged stablecoin using ETH as collateral.

0% Interest, No Fees? What's the Catch?

Deposit Ethereum tokens in various forms and qualify for eBTC at 0% interest. No initiation fees or repayment fees apply. However, a 110% collateralization threshold ensures users don't get liquidated.

Badger claims this sets them apart from traditional DeFi lending protocols, encouraging users to deposit Ethereum and borrow eBTC. Lido's Liquidity Observation Lab is offering 15 stETH as incentives to early adopters over one month, airdropped to users. DeFiYaco, Business Development Lead at LidoDAO, commends the development for introducing exceptional use cases for stETH.

Lido's Powerhouse Role

Partnering with Lido, with its massive $35.5 billion TVL and dominance as a liquid staking provider, gives Badger access to 30.3% of Ether's supply. This collaboration provides a capital-efficient borrowing option for Bitcoin on Ethereum.

Badger's Redemption Story

Badger has faced setbacks, with its TVL plummeting from $1.2 billion to $23.3 million after a front-end attack in 2021. Competition from other crypto lending platforms added to their woes.

eBTC: A Reckoning of Sorts

Badger acknowledges these challenges but emphasizes the security measures taken for eBTC, including partnerships with five security companies. Multiple smart contract audits, economic risk assessments, and a pre-launch bug bounty demonstrate their commitment to safety.

A Novel Lending Model

The 0% interest Bitcoin lending model is gaining traction, allowing eBTC to generate staking yield and eliminate traditional DeFi lending mechanisms.

A Time for Redemption

Once a leader in the industry, Badger has experienced setbacks but is poised for redemption with eBTC. Partnering with Lido, implementing security measures, and offering 0% interest could be the catalyst for a resurgence in Badger's fortunes.

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Other articles published on Nov 05, 2024