TON Foundation recently announced a groundbreaking development for TON DeFi – TON Teleport BTC.
Set to launch later in 2024, this new system will create a secure and trustless bridge, allowing easy Bitcoin transfers to and from the TON blockchain. This innovation will significantly enhance Bitcoin’s utility within TON ecosystem, creating numerous opportunities in DeFi.
This article explores how TON Teleport BTC will boost DeFi on TON, focusing on key areas like liquidity staking, yield farming, restaking, and lending. We will also draw an analogy to Babylon to highlight the potential impact of this cross-chain innovation.
Details of TON Teleport BTC
- Direct Transactions: TON Teleport BTC operates without intermediaries, ensuring direct, transparent, and secure transactions. This eliminates the risks and inefficiencies associated with centralized entities.
- Smart Contracts and Validators: All transactions are executed via smart contracts and validated by TON blockchain validators, providing a trustless environment that enhances security and reliability.
- Guaranteed Value: Each Teleport BTC is backed 1:1 by native Bitcoin, maintaining the value and security of the original asset. This assurance is crucial for building user trust and encouraging participation.
Supercharging DeFi Activities on TON: Benefits for Investors
Liquidity Staking:
Staking is the process of locking up your cryptocurrency to support the operations of a blockchain network. Traditional staking is typically illiquid, meaning they cannot be accessed or used until the staking period ends. Liquid Staking Tokens (LSTs), however, represent these staked assets in a liquid form. This means that even though the assets are staked and earning rewards, they remain accessible and usable.
- Boosted Liquidity: The introduction of Bitcoin into TON ecosystem through TON Teleport BTC platform significantly enhances the liquidity available for staking activities.
- Earn While You Stake: Bitcoin holders can stake their Bitcoin as a “staking” assets to secure TON blockchain and to earn rewards, generating passive income from their assets while contributing to network security.
Yield Farming:
Yield farming involves providing liquidity to decentralized finance (DeFi) protocols. You deposit your cryptocurrency into liquidity pools, which are used for various DeFi services like trading, borrowing, or lending. Then you earn rewards, often in the form of additional tokens, for providing liquidity. The rewards come from transaction fees and token incentives given by the DeFi protocols.
- Maximized Returns: Using TON Teleport BTC, you can use your Bitcoin to get even higher returns in yield farming on TON network. The extra liquidity from your staked Bitcoin can be used in various yield farming strategies to maximize your returns.
- Integrated DeFi Opportunities: By using Teleport BTC, users can participate in multiple liquidity pools, earning returns from transaction fees and additional token incentives.
Restaking:
Restaking is a process where users can re-stake their earned rewards into the network to compound their earnings.
- Earn More by Restaking: With TON Teleport BTC, users can restake their Bitcoin (Teleport BTC or LSTs) in specialized protocols, earning additional rewards by providing security services to third-party protocols.
- Enhanced Rewards: Restaking provides a way to compound earnings, leveraging the initial staking rewards to secure more services and earn even more. This involves staking rewards earned from initial staking activities back into the network to increase total returns.
Lending and Borrowing:
Lending in DeFi involves lending assets to others in exchange for interest payments, while borrowing involves using assets as collateral to obtain loans.
- Collateralized Loans: Teleport BTC can be used as collateral in lending and borrowing protocols within TON ecosystem. This enables users to access liquidity without sell their Bitcoin.
- Efficient Capital Use: With TON Teleport BTC, borrowers can use their Bitcoin as collateral to obtain loans on TON, providing flexibility and liquidity. Conversely, lending platforms allow users to lend their Bitcoin (teleported to TON) in exchange for interest payments.
Bridge between TON and Bitcoin
Similar to how Babylon bridges Bitcoin and Ethereum’s Web3 ecosystem, enabling Bitcoin holders to participate in validating transactions on proof-of-stake networks while earning yields on their otherwise idle Bitcoin, TON Teleport BTC acts as a bridge between TON and Bitcoin. This creates a massive, combined ecosystem that enhances the utility and value of both networks. This integration can unlock new potential for Bitcoin within TON ecosystem, providing more opportunities for yield generation and participation in DeFi activities.
Importance of the TON Teleport BTC Platform
TON Teleport BTC system is set to revolutionize DeFi on TON by expanding Bitcoin’s applications within the ecosystem. By providing a trustless, secure bridge for Bitcoin transfers, TON Teleport BTC enhances liquidity, yield opportunities, and overall DeFi utility. In an era where Bitcoin’s dormant supply has reached unprecedented levels, with approximately 46.5% of the supply last active over three years ago, suggesting that long-term holders are not selling despite market fluctuations, and skepticism towards centralized solutions prevails, TON Teleport BTC emerges as a beacon of innovation.
Bitcoin: Percent of Supply Last Active 3+ years ago: (Source: Glassnode)
By providing Bitcoin holders with opportunities to generate yield and participate in various DeFi activities, TON Teleport BTC enhances the overall utility and appeal of the TON network. As TON Teleport BTC continues to develop, it is set to drive the growth and innovation of the DeFi landscape on TON, offering new opportunities for users and solidifying TON’s position as a leading DeFi platform.