BendDAO embraces the BTC ecology, can old trees blossom?

Original | Odaily

Author | 0xAyA

Finally, BendDAO also began to issue inscriptions - this protocol that previously focused on the NFTFi space and was committed to providing more liquidity to blue chips could not escape the wave of BTC ecology and inscriptions. As early as two weeks ago, BendDAO said that the team plans to come up with solutions to embrace the Bitcoin Non-fungible Token ecosystem, and the new solution will allow seamless interaction between Bitcoin Non-fungible Token and BendDAO and support WBTC Liquidity pools as loanable assets.

Then BendDAO announced that it will connect BRC 20 and ERC 20 liquidity, and will soon launch BendDAO BRC-20 to provide lending and cross-chain interaction services for the Bitcoin ecosystem. Just yesterday, it was officially announced that the BRC-20 Token BDIN will be launched, which will provide priority benefits to borrowers, lenders, stakers and veBEND holders.

BRC 20 is a format standard for issuing fungible tokens on the Bitcoin network, which is to configure the Token contract, mint and transfer Token by using the Ordinal protocol to set the inscription to JSON data format, we can understand it as a mutated ordinal Non-fungible Token, the inscription on the Non-fungible Token is burned as a picture, and the inscription identified on the BRC 20 is text data (text) in uniform JSON format. In BRC 20, the inscription is also the ledger of BRC 20 Token and can be used to track every Token movement. ERC 20 is based on EVM Tokens that rely on Smart Contracts, and Tokens issued on BRC 20 have fewer functions due to the lack of Smart Contract support for BTC.

Although both are Token standards, ERC 20 and BRC 20 have little in common in nature. BendDAO’s Cross-Chain Interaction service will undoubtedly greatly reduce the gap between the two, and this Cross-Chain Interaction support can also improve liquidity between the two most important ecosystems, which is potentially important for both improving asset utilization and the overall development of the Bitcoin ecosystem in the future.

This isn’t the first time BendDAO has done this kind of Liquidity-enhancing layout - as early as the Ethereum Non-fungible Token narrative was in its infancy, BendDAO set its sights on the most important piece of the pie in the entire ecosystem, the blue-chip Non-fungible Token market. Through a “peer-to-pool” design and two-way mining incentives, BendDAO quickly attracted blue-chip Non-fungible Token Holders who are extremely sensitive to capital efficiency, and one BAYC after another has been put into staking pools.

However, the design of BendDAO itself and the continuous thunderstorms in the market have caused liquidation events to occur one after another, although the project team quickly adjusted the liquidation mechanism after the liquidation event in August, gradually drop the liquidation threshold from 90% to 70%, adjusted the auction period from 48 hours to 4 hours, and removed the restriction that “the first bid must be higher than Floor Price 95%”. But there is still no way to avoid a liquidity crisis.

As the market’s frenzy for Non-fungible Token gradually subsided, blue-chip Non-fungible Token also fell into a gloomy predicament this year, with the Floor Price of the top projects 50% Slump more than half from their peaks, and the originally buzzing NFTFi narrative became less popular.

BendDAO’s attempt this time is not so much an active change, but a helpless move driven by the general trend of the market - under the inscription and Launchpad boom, HOOK, LEVER and other projects have transformed, and BendDAO has also chosen this path, can their attempt succeed? Time will tell.