I came from the world of real estate and construction. One of my favorite Dapp technologies is Liquity, a platform that allows people to borrow against ETH at zero percent in an over collateralized loan backed by ETH. The only cost to Liquity is an origination fee and the potential for liquidation on the underlying asset.

The issue is that most people don't have enough ETH to borrow from and though ETH is currently deflationary to attract investment through the greed of the 'number go up' mentality, it's inflationary by nature via proof of stake. I anticipate that sometime, they'll reduce or stop the burn mechanism which will again make it inflationary. This is only speculation with an understanding of tokenomics.

I'm a Bitcoiner but also appreciate the fintech innovations found in Decentralized Finance. I believe that Bitcoin will offer financial inclusion and a means to save and store value against currency debasement. WBTC is a derivative of Bitcoin minted by Bitgo whom requires institutions to transact in about $100K a week. Due to WBTC (Bitcoin) fixed limited supply, it makes sense to borrow against an appreciating asset as Michael Saylor has discussed. With this possibility, there would be incentive for corporations and institutions to mint WBTC in order to borrow at low rates within a high interest rate environment.

This would not be to replace the dollar but to provide an algorithmic dollar equivalent, a debt note, backed by Bitcoin as a collateralized asset which would further it's adoption and utility.

Some would argue that WBTC is centralized by Bitgo. This is true but it can't be censored on-chain and it's controlled by a DAO of multiple parties. The BTC is held in custody by Bitgo which is a risk vector but does have a public mint and burn which offers transparency. Many larger exchanges are already using it. The Government might also take comfort knowing there is some form of control, since Bitgo could be seen as similar to Circle who issues USDC.

Some Bitcoiners would argue that this should be built on Bitcoin. However, Bitcoin is a pristine asset, seen as a commodity or property, and some would argue that changing it's nature might result in turning it into a security.

Overall, the development of this Dapp would help drive adoption in crypto and benefit all. This would also likely create a strong stablecoin which in theory is backed by Bitcoin on the Ethereum network.

So why hasn't this been created? Are people waiting for a better on-chain version of Bitcoin in fear of centralization? Or are people afraid of what this might do to lending and big institutions?

I don't know but I'm personally looking forward to this innovation.

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