While most of the development of DApps and Decentralized Finance (DeFi) is in the Ethereum ecosystem, the simple fact is that Bitcoin “dominates” the majority of the cryptocurrency market capitalization. This sector is burgeoning with fintech innovation with the likes of Decentralized Exchanges (DEXs), digital swaps, derivatives, and micro banking applications, all using smart contracts. BTC Proxy brings BTC liquidity onto the Ethereum ecosystem and #DeFi applications.
Tokenized assets provide an opportunity to transfer the asset’s value (USD, for example) for utilization on a particular ecosystem. Because the token value is backed by fiat or a digital asset, they offer a safe way for traders to keep their value in a cryptocurrency without worrying about price fluctuations. Cryptocurrency can replace traditional finance, but only if a bridge between them can be constructed to transfer value. BTC Proxy builds a decentralized bridge to securely transfer Bitcoin value into an ERC20 token.
The vast choice of cryptocurrencies available today is a testament to how much expansion and growth have taken place within this space. Despite such huge numbers and diversity, almost all focus largely on some form of monetary/value exchange. Some offer transactional throughput, privacy, cheap transaction fees, smart contract ability, the decentralization of nodes/miners, and more. The BTC Proxy framework makes it easy to represent any other cryptocurrency and enhance it with all the blockchain’s capabilities. Funding can be direct, and minting tokens can occur immediately after BTC Proxy tokens’ deposits are confirmed. Soon, centralized exchanges and other institutions which accept cryptocurrencies would not need to maintain multiple cryptocurrency nodes. They would instead, without third parties, help towards development directly onto Ethereum.
The majority of ERC20 tokens trading in centralized exchanges today is done with a BTC pair rather than with ETH. In contrast, most decentralized exchanges offer only ETH/Token and not BTC/Token trades. BTC Proxy tokens bridge this technological gap and provide more liquidity on decentralized exchanges and pools. Additionally, other decentralized applications/protocols (borrowing, lending, finance, payments) will also benefit from having access to greater liquidity that a BTC holder can bring. Bitcoin Proxy enables these holders to participate with ETH based applications.