Before we get started, this is not a recommendation or endorsement to buy any token(s) mentioned.
This week, we return to Season 2 for a Bitcoin L2 points program called BOB, including how to get started with a DeFi lending and borrowing app called Shoebill.
Launched in May 2024, BOB, which stands for Build on Bitcoin, is a hybrid L2 solution that aims to improve the security and interoperability of Bitcoin and Ethereum platforms. BOB is powered by the Optimism OP Stack, which allows it to use the Ethereum Virtual Machine (EVM) to create and execute smart contracts while offering users new benefits they’ve come to expect as DeFi users on Ethereum and L2s including: account abstraction, smart contract wallets, social recovery, and gasless transactions.
BOB unites the best of Bitcoin and Ethereum in three key ways.
- EVM Smart Contracts: First, it enables developers familiar with Ethereum’s EVM to build on Bitcoin seamlessly, leveraging industry-leading tools, wallets, analytics, and a custom Bitcoin developer suite for faster market entry.
- Bitcoin Alignment: Second, BOB aligns with Bitcoin’s core principles by inheriting its Proof-of-Work security, contributing to its economy, and offering decentralization solutions without the need for hard forks.
- Dual Liquidity: Finally, BOB taps into dual liquidity of both the Bitcoin and Ethereum ecosystems, positioning itself as a solution for driving DeFi mass adoption.
By providing BTC holders easier access to a best-in-class EVM and Bitcoin infrastructure, along with fast on-ramps for BTC, stablecoins and ERC20s, BOB hopes to onboard a new segment of DeFi users.
Since launching Mainnet in May, the BOB ecosystem has grown to over $82M TVL. Part of the story behind this traction is their efforts to make access to BOB so seamless. For example, the BOB Gateway lets you stake, swap, or lend BTC from a single unified interface so you can put your BTC to work earning yield faster. It’s built on a trustless, RFQ-based cross-chain protocol that connects professional market makers with users via a seamless swapping UX. These market makers handle the complexities of bridging and staking on behalf of users in exchange for a small fee.
BOB Fusion is the official points program of BOB, where users can harvest Spice (points) based on:
- TVL
- Using dApps
- Referrals
- Quests and special events
BOB Season 1 started on March 27, 2024 and ran through BOB Mainnet Launch on May 1, 2024. Since May 1st, BOB Season 2 has been in effect with more ways to harvest Spice based on on-chain activity. Spice represents a user or project’s support of the growth of the BOB ecosystem. Supplying TVL to dApps generates the most Spice, along with clever gamified metrics like multipliers and “effort.” TVL Spice points are allocated to dApps that redistribute them to users, but distribution may vary from project to project.
Be sure to follow BOB on X and join their Discord to participate in BOB Fusion and get updates and more!
Today, I’ll cover how I can participate in BOB Season 2 by lending and borrowing with one of the top DeFi apps on BOB called Shoebill.
How to Bridge, Lend, and Borrow with Shoebill on BOB
Before we get started, please be aware of these risks.
- Smart contract risk in any related apps including Shoebill or BOB Gateway
- Front-end spoof attack on any app frontend
- Withdrawal delays if assets lent to Shoebill are 100% utilized
- An economic design exploit
- Colluding signers on any multisig
- Stablecoins such as USDC or USDT could depeg
- Systemic risk across DeFi
Here’s how I get started!
- First, I need to examine which assets I’ll lend or borrow on Shoebill here. I’ll examine the 3 different markets: BOB ETH Market, BOB BTC Market, and BOB Stable Market. For this example, I’ll choose the BOB BTC Market so I can just bridge wBTC and plan to pay gas in wBTC as well.
- I connect my Ethereum Mainnet wallet to the BOB Gateway here, and specify which token (ie wBTC) and how much to bridge to BOB, which will require 2 transactions.
- Once my wBTC has arrived on BOB L2, using the same wallet, I go there to the Shoebill app for BOB BTC Market here, and I should be prompted to switch my wallet network to BOB.
- Lastly, I just click on the appropriate asset to lend (ie wBTC), specify how much to lend, and follow the prompts to Approve and Deposit/Supply.
That’s it! I can passively earn Spice towards an anticipated future airdrop by BOB. I also can opt to borrow even more wBTC, then deposit/supply it, and repeat the process (see steps below) to earn even more Spice and Shoebill Points with a leveraged position. Due to an oversupply of wBTC and lack of borrowing, there’s a positive borrowing interest rate where users get paid to borrow WBTC.
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DeFi Dad is one of the earliest power users of DeFi, having worked with early Ethereum startups going back to 2018, including Zapper.
