Here are some strategies for using BTC on Cardano that can potentially help users navigate different market conditions.
Lending
cBTC can be used to passively earn interest for lending out your BTC. @Cherry_Lend is currently offering a 15% APR for cBTC loans and
@FluidTokens is also a nice option for P2P lending with cBTC. Would be cool to see cBTC integrated into other lending platforms such as
@LenfiOfficial @liqwidfinance @levvyfinance @Cerra_io so community members have a plethora of lending options when looking to earn interest on their BTC holdings.
Borrowing
cBTC can also be used as collateral to access loans. @Cherry_Lend and
@FluidTokens already have this support and typically a user can earn 70% LTV, meaning for each BTC they use as collateral they can have access to around 42,000 USD or 70,000 ADA at current prices. Of course, this must be managed properly to avoid potential liquidations that could occur. In the future, we could also see integrations of cBTC markets with pooled lending protocols such as
@liqwidfinance and
@LenfiOfficial pending successful governance votes on their platforms.
Swapping
cBTC can be traded across mostly all DEXs on Cardano such as
@MinswapDEX @TeddySwap @spectrumxnet @MuesliSwapTeam and can find some P2P trading on
@axotrade and
@GeniusyieldO. Liquidity is spread across these DEXs so
@DexHunterIO is also a nice option. Swapping BTC with other assets is especially potentially useful in times of volatility when users can possibly capitalize on large BTC swings while other assets remain relatively stable, as is the case now with the recent price action of BTC and ADA.
Everyday Transactions
cBTC is a nice alternative to normal BTC for simple everyday payments, this can be done on popular Cardano wallets such as
@vesprwallet @lace_io @NamiWallet @eternlwallet and more. BTC was originally envisioned as a P2P electronic cash system and inheriting the security of BTC's UTXO model combined with lower tx costs and much faster time settlement make global payments to family, friends, or businesses much simpler. There are blockchains with lower tx fees and faster settlement times, but those are the tradeoffs we are willing to take to prioritize security and reliability.
Perps and Options
Options and perps markets are developing and maturing via platforms like
@DexHunterIO and
@OptionFlowTeam where cBTC could be a widely used asset as BTC is already the most popular asset for leverage trading in our industry.
With these different strategies, cBTC can be used in a wide variety of ways to give users flexibility in managing their portfolios. Combining bitcoin with the native features of Cardano allows our community to effectively navigate and potentially capitalize on volatile market conditions.