Will the world and its population one day be governed by decentralized autonomous organizations?
Or is a world free of oppressive corruption just a pipe dream for hopeful young cryptographers?
Today, we’re going to review a cutting edge DAO that’s being built on blockchain designed by one of the largest and most well-known names in crypto.
Let’s get it.
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Pronounced ‘by-daw’, although I've heard some people call it about everything else,
Bidao is a new Ethereum-based proof-of-stake blockchain
that facilitates a decentralized stablecoin.
Very similar to the more commonly known MakerDAO,
Bidao was originally designed to launch on Binance Chain.
However, it now supports multi-chain interoperability
and has established itself as one of the leaders in the chain agnostic movement.
But who knows?
With Bidao,
users can take out collateralized debt positions,
or CDPs,
which is a fancy way of saying a loan backed by your deposited collateral in a smart contract.
This process provides a real asset and value,
which is referred to as over-collateralization
for receiving a loan in the form of a stablecoin.
The reason this kind of over-collateral is added is to protect your investment if the token price drops in value.
Bidao also allows built-in leveraged trading in a trustless setup.
Now, before we go into the Bidao token system,
let's briefly recap proof-of-stake
for the newer subscribers to the channel.
This means a token is stakeable, which allows its users to generate passive income.
The second piece,
typically with proof-of-stake,
is that the tokens provide voting power to address developments of the network.
Alright, so let's dive into the Bidao 3-token system.
The Bidao ecosystem uses 3 different tokens.
First is a governance token, BID.
Second, the stablecoin, BAI.
And finally, Binance Coin is collateral for loans and debt positions.
Users can also stake their BID tokens on the Bidao chain
to both participate in the network consensus
and receive passive income.
The stablecoin BAI is an algorithmic stablecoin
that is pegged one-to-one to the US dollar and follows code and logic of an elastic token supply,
similar to MakerDAO,
for maintaining that peg.
Now, let's look at the Bidao partnerships and collaborations.
One of the biggest and most impressive things Bidao has done to date is integrating with many different blockchains,
like Chainlink,
Cosmos,
Ontology,
Tron,
Bitcoin,
and even Ethereum.
The goal is for Bidao to become a one-stop shop for decentralized finance or DeFi applications.
Initially, Bidao will integrate with Ethereum and Cosmos chains.
In the future, they aim to be a blockchain agnostic DeFi application,
and therefore will continue to integrate other blockchains into the Bidao ecosystem.
This will now be accelerated via their integration with Chainlink.
When it comes to the Bidao team,
Brian C,
so I don't butcher the name,
is a Chief Technology Officer and also a University of Oxford alumni,
and Caroline Kurpiers, who is Bidao’s Chief Marketing Officer,
have extensive consulting and researching backgrounds.
Now, let's talk partnerships.
Chainlink is a big one.
Bidao will have an integration with Chainlink,
which, as most of you already know, is a decentralized oracle solution
that provides secure and reliable price feeds that will power this stablecoin.
To start, Bidao will support ETH/USD,
BTC/USD,
and LINK/USD price references,
which are already running live on their mainnet.
This will allow an expansion of the different types of collateral users can choose
from when taking out collateralized debt positions
via the Bidao protocol.
Ontology also is going to be implemented into Bidao as a collateral asset.
This means that ONT can be locked up in CDPs to generate the BAI stablecoin.
Using ONT as collateral is very easy.
Now, at first, the Ontology is locked up in the CDP.
In return, the appropriate amount of BAI is generated and can be used freely by the CDP creator.
To regain access to the locked ONT, the BAI has to be repaid to the system.
This is done by a simple function call and sending back the BAI to the CDP.
After that, the ONT is unlocked and can be transferred freely again by the CDP creator.
I felt like I just read the alphabet 7 times.
But Ontology’s unique infrastructure supports robust cross-chain collaboration,
layer two scalability, and includes a suite of decentralized identity and data sharing protocols.
It will be interesting to watch and see
how the collaboration between Ontology and Bidao develops further into the future.
So, what problem is Bidao trying to solve?
Currently, there is no trustless stablecoin that is blockchain agnostic
and allows different crypto assets as collateral.
The closest system is MakerDAO,
but it is completely dependent on the Ethereum blockchain,
and as a result,
it cannot interact with other crypto assets easily.
And it's somewhat isolated from the greater blockchain ecosystem.
This is where Bidao comes in.
At first, Bidao will be integrated with the Binance blockchain, and BNB will be used as the collateral,
as well as adding many other cryptocurrencies like BTC, ETH, Ontology, Link, and Cosmos.
The goal is to create a blockchain agnostic ecosystem for DeFi applications.
Binance Chain operates as a settlement layer.
Instead of using ETH as collateral and Ethereum as the settlement layer,
Bidao uses BNB, which is Binance Coin, as collateral
and the Binance Chain as settlement layer.
Using BNB instead of ETH as collateral has various advantages for users.
Now, let's look at the token architecture of Bidao.
Now, as we've mentioned, one of the tokens in the ecosystem is a stablecoin called BAI.
B-A-I
The target price of BAI is 1 USD.
This means that 1 BAI can be sold for 1 USD on exchanges.
As target price is reached through built-in code and logic,
that incentivizes participants to keep the value of 1 BAI to 1 USD.
The other token is the staking, governance, and paying fees token, BID.
BID holders play an important role in governing the Bidao system
and can make decisions around the direction of the network.
Moreover, BID can be staked and used for paying the fees within the Bidao ecosystem.
Lastly, Binance Coin was the original token used as the collateral for the network.
However, many more tokens will be supported to add as collateral over time,
as we mentioned with Ontology,
so you will be able to take your existing crypto assets,
like ETH, BNB, LINK, Ontology,
and use them as collateral within the Bidao system.
You will then be issued stablecoin BAI.
Once the BAI has been generated,
it can be used exactly like Bitcoin or Ethereum,
which means that it can be transferred between an account or simply held in the wallet.
The target price of 1 USD is pegged, of course, to the US dollar.
This value is guaranteed due to the fact that in the case of a price drop of the collateralized token,
the insufficiently backed contracts are liquidated.
And with this, the target price of the BAI can be maintained yet.
Confused yet?
Don't be.
In time, this project plans to make more of your cryptos able to be used
for not only earning passive income
but also supporting a blockchain agnostic project.
To learn more, check out bidaochain.org.
And as always,
thank you to Bidao for supporting the channel.
That's all I got.
Be blessed.
BitBoy out.