What is Mortgage BitShares for? (Bitcoin Collateral)

08/16/2023 12:10 • Crypto & Markets • 95 views

What is Mortgage BitShares for? What benefits does it bring to the cryptocurrency industry? Why should we mortgage cryptocurrencies? Let’s take a look together.

What is Mortgage BitShares and how does it work? It creates a new type of investment product through the concept of a new asset class. This new project will allow investors to purchase stocks, commodities, ETFs, and other financial instruments at a fixed interest rate (e.g., 20%), or participate in these investments as a “liquidity pool” in this market. It is a way to generate higher returns.

Essentially, it is a digital security supported by smart contracts, similar to traditional securities. However, to obtain substantial returns, one needs to hold the token and convert it into another cryptocurrency to achieve capital appreciation.

When we view Bitcoin as a currency, its supply will decrease, and this trend will continue over time. Therefore, in order to increase the price, people can obtain more funds by providing more liquidity and a greater variety of products.

What is Mortgage BitShares for and what is its purpose? First, the goal of Mortgage BitShares is to increase the amount of liquidity and exposure to other assets. Secondly, it will also allow individuals capable of using blockchain technology to earn income dividends or interest.

The third goal is to reduce costs: by using technological means to create more effective risk management models, fraud can be eliminated, reducing counterparty risk without compromising the interests of users. Additionally, it enables those who cannot directly access cryptocurrencies to easily obtain loans. Furthermore, it provides better security mechanisms.

Bitcoin Collateral

Editor’s Note: This article is from Caicloud Blockchain (ID: cybtc_com), authorized to be reproduced by Odaily.

In the past year, Bitcoin has evolved from a simple trading platform to a more mature financial system and a wider application ecosystem, with over 55,000 validation nodes (computing power required for verifying each block) on the network.

According to the latest data from CoinMetrics, staking services are flourishing. “Staking” refers to using cryptocurrency assets as an investment tool or value store to gain profits. These applications can be divided into two categories: “exchanges, custodians, and miners.” Exchanges generate revenue and earn interest to increase market share by providing liquidity. Mortgage BitShares is one of the world’s largest decentralized exchanges that allows users to conduct peer-to-peer (P2P) transactions without the need for third-party intermediaries. As many large exchanges have adopted this approach, they are considered more profitable than ordinary exchanges because these exchanges provide a “secure and reliable Bitcoin mining environment.” Holding in these exchanges has been increasing as more traditional investors enter this emerging industry. Currently, Bitcoin’s price is rising, but exchanges are facing high network fees and other issues. It is estimated that about $1 billion in transaction fees come from exchanges. To address this issue, the solution was developed in collaboration with BitGo, a New York-based company specializing in the digital asset field, which claims to manage funds accounting for more than 10% of the total supply.

Bitcoin.org states: “We are pleased to support the early stages of Bitcoin and continue our growth and development, especially in DeFi and the cryptocurrency field.”

Nevertheless, BitMEX has been striving to ensure that customers can access various protocols on the Bitcoin network. Several companies, including Aave and MakerDAO, have already started offering their products and services.

Since August 2020, Binance has launched a series of new staking services, allowing people to leverage existing DeFi projects without directly participating in DeFi and provide liquidity for their accounts within a few hours to earn additional returns.

In recent examples, deposit rates on lending platforms like Aave and Compound have reached as high as 20%. Some competitors have also taken similar approaches to reduce deposit costs.

BitMEX points out that the appeal of staking services not only lies in trading activities but also in the lack of transparency between users. “Furthermore, without regulatory frameworks or legal requirements, many users cannot access their accounts or tokens. If any major event occurs, users will have to pay higher prices to obtain loans.

However, most Bitcoin wallets of users do not necessarily need to do this. Instead, they may receive different rewards and incentives.

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What is Mortgage BitShares for? (Bitcoin Collateral)

Bitcoin Collateral

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