Utilizing a completely decentralized proof-of-stake blockchain, BiDao brings two cryptocurrencies to its decentralized finance (Defi) platform. While one happens to be BID (the governance token), the other is a 100% stablecoin BAI.
Primarily, BAI is an additional collateral-backed value token that has introduced the Ontology (ONT) token as a collateral asset. This means that using ONT, one can generate BAI, thereby making BiDao a multi-collateralized platform.
In contrast to other collateral-backed value tokens that use cryptocurrencies like Bitcoin or Ethereum for backing, it is the fiat currency USD that backs the BAI stablecoin. And this ensures the BiDao ecosystem is much less susceptible to crypto market volatility. BiDao’s system utilizes Binance Chain as the settlement layer. Thus the BiDao’s users can interact with any asset on Binance Chain.
How to use ONT as collateral?
To generate BAI using ONT, the holder must lock up ONT in the CDP (collateralized debt position). The creator can use ONT to generate an amount of BAI and can use it across the assets on Binance Chain. Generating BAI basically generates debt in the BiDao system. It is this debt that locks the collateral. And the only means to unlocking the debt is when the debtor pays back equivalent BAI. To ensure system security, the system always over-collateralizes the debt.
Will BAI catalyze market adoption?
Many crypto enthusiasts have questioned the need for BiDao as its modus operandi is quite similar to MakerDao. However, there is more to BiDao that could lead to the mass adoption of crypto assets like BNB and ONT.
Primarily, BAI is a completely decentralized stablecoin. And that sets BiDao apart from the rest. Unlike Tether, BAI is free of centralization and unlike MakerDAI, BiDao does not limit BAI to a single ETH platform. Thus using BAI, BiDao will become an open Defi ecosystem. And will be able to communicate with different blockchains and their native assets.
In the future, BiDao targets to integrate blockchains like Ethereum, Tezos, and EOS. This way BiDao will become a honey-comb for Defi applications. And this Ontology strategic partnership with BiDao will open the Defi world to ONT holders.
To remind, BiDao recently chalked up strategic collaboration
with Tron. Earlier this year, the infrastructure provider of Facebook’s Libra, Bison Trails had added Ontology nodes
to its platform.