May 23, 2023
Borrowing USDC against Bitcoin in Arcade.xyz
Our Integration with Arcade enables non-custodial borrowing of USDC on Bitcoin
We've partnered with Arcade.xyz to offer a unique opportunity for users to utilize their Bitcoin holdings in a non-custodial and decentralized way. By integrating DLC.Link's Bitcoin-backed NFT technology with Arcade's DeFi lending platform, users can now lock their Bitcoin in on-chain escrow and borrow against it.
Integration Process
The process begins with users locking their Bitcoin in a DLC on the Xverse Bitcoin wallet, which acts as an on-chain escrow. Once the Bitcoin is secured in escrow, DLC.Link mints a Bitcoin-backed NFT in the user's Ethereum wallet. This NFT represents the locked Bitcoin and allows users to interact with Ethereum-based DeFi applications.
With the Bitcoin-backed NFT in their Ethereum wallet, users can list it on the Arcade.xyz platform to borrow against it. They can choose from a range of assets, including ETH, USDC, DAI, and other cryptocurrencies. After repaying the loan, users can burn the NFT and reclaim their locked Bitcoin.
Video Demo
In this video demo, Robert from DLC.Link walks through the process of using native Bitcoin as collateral for a stablecoin loan using Arcade.xyz and DLC.Link's NFT broker site. He demonstrates creating a vault on Ethereum using MetaMask, locking the Bitcoin, minting the NFT, and listing the NFT on Arcade.xyz to borrow against it. The demo also explains closing the vault and getting the Bitcoin back, as well as transferring or liquidating a loan on Arcade.
Benefits to Users
The collaboration between DLC.Link and Arcade.xyz offers several benefits to users:
- Control: Users maintain control over their Bitcoin, as it is locked in on-chain escrow.
- Liquidity: Bitcoin holders can access Ethereum-based DeFi platforms for liquidity without selling their Bitcoin.
- Flexibility: Bitcoin-backed NFTs can be traded or borrowed against, providing users with more options for their Bitcoin holdings.
- Cost Efficiency: Representing Bitcoin as an NFT on Ethereum allows users to save on transaction fees.
- Security: The partnership ensures that the Bitcoin remains securely locked in escrow until the loan is repaid.
Impacts on the DeFi Ecosystem
By bridging the gap between Bitcoin and Ethereum, the partnership between DLC.Link and Arcade.xyz has the potential to:
- Increase DeFi Adoption: Allowing Bitcoin holders to access Ethereum-based DeFi platforms can attract a larger user base.
- Enhance DeFi Liquidity: More Bitcoin in the DeFi ecosystem as collateral can improve overall liquidity.
- Drive Innovation: Bitcoin-backed NFTs can inspire new use cases and applications within the DeFi ecosystem.
Conclusion
The partnership between DLC.Link and Arcade.xyz has successfully integrated a Bitcoin-backed NFT solution with a DeFi lending platform, allowing users to access loans in a non-custodial and decentralized manner. The integration demonstrates the potential of connecting Bitcoin and Ethereum, as shown in the video demo walkthrough. With the public beta release upcoming, the potential impact on the DeFi ecosystem is significant, with the potential to increase adoption, enhance liquidity, and drive innovation.
