The decentralized nonfungible tokens (NFTs) borrowing and lending protocol – BendDAO – is all set to embrace the Bitcoin ecosystem. In a Discord post, BendDAO said that it will provide Bitcoin NFT lending business and will support the wBTC liquidity pool as a loanable asset.
The platform is also actively exploring ways to facilitate smooth interactions between BTC NFTs and its platform, considering options such as third-party cross-chain bridges and cross-chain bridges utilizing multi-signature wallets.
BendDAO to Embrace Bitcoin Ecosystem
The official announcement by Hill, who’s listed as a core contributor in the BendDAO Discord, stated,
“It‘s time to embrace the BTC ecosystem by proposing solutions that will allow seamless interaction between BTC NFTs and BendDAO, and support wBTC liquidity pools as borrowable assets.”
The Third-Party Bridge Protocol proposal entails leveraging an existing third-party bridge protocol to connect Bitcoin NFTs from the Bitcoin network with BendDAO on the Ethereum network. In this solution, users supply Bitcoin NFTs to the third-party bridge, which mints a 1:1 mapped ERC721 token for the user. Users then deposit these ERC721 tokens into BendDAO to borrow ETH, USDT, or wBTC.
Such a system in place will have proven infrastructure with established security protocols as well as quick integration with the possibility of immediate deployment.
Multi-Signature Wallet Bridge is yet another solution that BendDAO is exploring, which leverages a multi-signature wallet system acting as an intermediary between the Bitcoin and Ethereum networks. In this case, BendDAO will retain greater control over the bridging process. Another advantage is improved security through multi-signature verification.
Bank Run Fears
Last year, BendDAO found itself entangled in a financial crisis alongside several other projects, having lent an approximate sum of 15,000 ETH.
In response to this challenge, the team behind the project formulated a proposal with the aim of restoring confidence among ETH depositors. This proposal involved short-term adjustments to various parameters, such as the liquidation threshold and auction period, along with modifications to the internet base rate and user interface enhancements.
Despite the setback, BendDAO unveiled its strategic plan last month. The roadmap outlined the completion of the development and comprehensive upgrades for the V2 product prototype in Q4 2023, the launch of a beta version in Q1 2024 to gather user feedback, and the introduction of the official V2 version in Q2 2024, featuring new functionalities and an improved user experience.
Additionally, in Q3 2024, BendDAO aims to update the V2 tokenomics and implement on-chain governance to encourage increased community involvement in decision-making processes.
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