It has become one of the latest crypto platforms to become disenchanted with Ethereum and its escalating costs of operation. Atomic Loans had the vision of bringing Bitcoin to decentralized finance (DeFi) and this was achieved through allowing users to lock their BTC in a non-custodial escrow in exchange for an ERC-20 stablecoin loan.
On Oct 8, the company announced that it will be dropping its previous cross-chain approach and working only with Bitcoin and its scaling solutions.
Ethereum a ‘Jenga Tower’
The company blog announcing the move repeatedly refers to Ethereum as a ‘Jenga tower’ as its justification for moving off the world’s most popular smart chain network.
It blames the rise of DeFi, the subsequent demands on the Ethereum network, and the ‘degens’ and whales that have, in its opinion, brought the whole industry into disrepute;
“Degenerate finance was not the kind of DeFi we signed up for. And ETH/stablecoin whales shifting capital from one opportunity to the next is certainly not where we intend to focus as our addressable market in the long run.”
In essence, these DeFi clones and yield farms are built on top of Ethereum’s infrastructure, so blaming Ethereum itself for their failings is a little presumptuous.
The ETH bashing continued with criticism of rising gas fees and what it termed as a ‘dubious transition’ to ETH 2.0. The blog post added that it wanted to build a sound financial infrastructure for sound money over the long run and for this it wants only Bitcoin.
Building on Bitcoin
In April 2020, Atomic Loans raised $2.45 million in a seed round led by Initialized Capital with follow up support from ConsenSys and Morgan Creek Digital.
The company has since been researching Bitcoin solutions such as DLC’s (Discreet Log Contracts), Bitcoin oracle contracts, RGB which is a layer on top of the Lightning Network that will enable asset issuance and smart contracts, and Bitcoin Escrow Contracts. The Lightning Network itself has recently been improved with the addition of larger ‘Wumbo’ channels.
Atomic Finance, as it has now been named, is researching what it terms as Bitcoin-Native and Lightning financial tools, or LiFi, to bring about a new ecosystem of Bitcoin-based DeFi.
Atomic Odds is the firm’s first product which is a Bitcoin settled prediction market using DLC oracle infrastructure.