Until recently, the bulk of Bitcoin (BTC) lending occurred on centralized platforms. This changed into predominantly due to the bulky method concerned in tokenizing Bitcoin right into a wrapped ERC-20 model earlier than it may be deposited at the Ethereum (ETH) community.

The ensuing implication of this inconvenience changed into now no longer simply the extra transaction expenses and slippage incurred however a fragmented decentralized finance (DeFi) surroundings. Currently, handiest 1% of Bitcoin is circulating on Ethereum.

BiFi is a platform that allows actual Bitcoin lending on DeFi through connecting the Bitcoin and Ethereum networks directly. The platform describes itself as “like Compound or Aave, however with actual, local Bitcoin.” Instead of going thru the method of wrapping their Bitcoin, customers can use their local BTC from their Bitcoin pockets to lend and borrow ERC-20 assets.

With BiFi’s local Bitcoin lending service, Bitcoiners can have interaction with DeFi protocols with out the want for third-celebration custodians and merchants. In removing the want for wrapped BTC, BiFi expects “a large inflow of BTC holders into DeFi” with a purpose to form the destiny of the industry.
Multichain lending with most security

BiFi claims to had been designed with a “security-first mindset.” Using BIFROST’s multichain generation and a aggregate of cryptographic proofs, BiFi guarantees the safety of its protocol.

The key thing right here is the reality that the Bitcoin and Ethereum networks are related directly. Both those blockchains have already got a massive quantity of nodes making sure their computational integrity.
More insights on Bifi right here

“We construct cryptographic proofs to confirm the accuracy of transactions that happened at the Bitcoin community and confirm it on-chain on Ethereum clever contracts. It can be extra pricey to carry out on-chain verifications, however this computational integrity approach is the maximum steady manner as a consequence far,” stated BiFi in a weblog post.

The platform additionally uses fraud proofs to confirm that the movements of the relayer are correct. It does this through developing cryptographic proofs and verifying them on-chain.
A DeFi destiny with out fragmented liquidity

Since its release in January 2021, BiFi’s Total Value Locked throughout staking, lending and pooling offerings has crossed $219 million. The platform additionally has a flash loan-primarily based totally leveraged yield farming and buying and selling service — BiFi X.

“Connecting Bitcoin and Ethereum community is a big step forward. Yet BIFROST will join extra networks and BiFi will provide lending and monetary offerings to amplify the DeFi surroundings to show DeFi into destiny finance,” commented Dohyun Pak, the CEO of BiFi and BIFROST.

The undertaking’s subsequent release can be a multichain pockets, which it expects to launch in Q3 2021. Users can be capable of keep BTC, ETH, BNB, ERC-20 tokens and BEP-20 tokens.

In 2022, BiFi targets to amplify to extra networks for multichain DeFi lending from EVM to non-EVM. Through a “Multichain Dev Suite,” builders can be capable of function DApps amongst all cross-EVM and non-EVM networks, increasing the multichain DeFi surroundings.

Ultimately, BIFROST envisions a destiny with out remoted capital markets on severa chains. To make this appear with the primary purpose of fixing one in every of DeFi’s largest challenges – interoperability – the undertaking permits capital to float freely among blockchains with none wrapping, bridging or custodians. Built upon its “Universal Multichain Middleware,” BiFi is the multichain DeFi platform with a purpose to now no longer isolate capital markets on severa chains.