Badger Finance, a prominent player in the DeFi space, has made waves with its latest offering: the eBTC Bitcoin lending protocol. Launched on March 26, 2024, this protocol breaks new ground by offering Bitcoin lending at a 0% interest rate, setting itself apart from traditional DeFi lending platforms.

Operating with a unique mechanism, eBTC allows users to borrow a yield-bearing Bitcoin-pegged stablecoin using ETH as collateral, utilizing stETH by Lido. What sets eBTC apart is its 0% interest rate, eliminating initiation and repayment fees for borrowers. However, users must maintain a collateralization level of at least 110% to prevent liquidation of their positions.

In an official announcement, Badger highlighted the innovative nature of this mechanism, designed to encourage participation by enabling users to deposit Ethereum and borrow eBTC seamlessly. As an added incentive for early adopters, Lido's Liquidity Observation Lab announced the provision of 15 stETH over one month, which will be airdropped to users within the specified timeframe.

DeFiYaco, the Business Development Lead at LidoDAO, commended this initiative, emphasizing the new use cases it brings for stETH by Lido and the capital efficiency it offers for borrowing Bitcoin on Ethereum. Lido was chosen as a partner due to its substantial Total Value Locked (TVL) of $35.5 billion, solidifying its position as a leading liquid staking provider and DeFi protocol.

For Badger, this development marks a significant milestone, following a period of challenges, including a front-end attack in December 2021, which resulted in a drastic reduction in TVL. Despite these setbacks, Badger is now focused on promoting the new protocol with enhanced security measures, including partnerships with security firms and rigorous audits.

The introduction of a 0% interest Bitcoin lending protocol has attracted attention for its innovative approach, offering eBTC protocol users the opportunity to earn staking yield while bypassing the conventional fee structures of DeFi lending platforms. As Badger continues to drive innovation in the DeFi space, eBTC represents a promising step towards a more accessible and efficient decentralized financial ecosystem.