Collateral Through Chains with BounceBit ($BB)⬅️
Although the lending market through chains exceeds a total locked value of $30 billion, it faces a fundamental challenge of a lack of high-quality collateral that provides returns on Bitcoin. For example, traditional wrapped Bitcoin offers a zero return (0%), making it an inefficient asset in terms of capital for both borrowers and lenders.
Unlocking Billions of Lending Opportunities Thanks to BounceBit
This is where the Liquidity Staking Token (LST) created by @BounceBit comes into play, providing superior collateral thanks to its underlying yield ranging from 7% to 9%. This feature allows money market protocols like Aave to raise the loan-to-value (LTV) ratios more flexibly.
While the LTV for volatile assets is typically set at 65%, it can be adjusted to 75% for the BounceBit LST token, meaning an effective increase of 10%. This slight increase opens the door to billions of dollars in additional lending capacity while enhancing capital efficiency across the decentralized finance (DeFi) ecosystem.