Disclaimer: There's a flipstarter in here for a native interest bearing futures instrument, and another app I've been working on for a while.

This primer is to explain the current DeFi landscape and where the functions of apps fit in comparison to each other.

TL;DR: Seven short primers on how BCH apps work, ELI5ed as their traditional finance correlates.

Since 2022, more advanced rules for contract scripting have expanded the realm of possibilities on Bitcoin Cash well beyond Alice just paying Bob.

Bitcoin Cash is now well suited to handle a range of slightly more complex financial instruments like swaps, forwards and locks. The advent of CashTokens is causing a Cambrian explosion of possibility with tradable instruments and transferable contracts (and states).

It's all very exciting and a little confusing. Let's go through what has been made, and how it can be expressed in traditional finance lingo.

AnyHedge: Leveraged Swaps.

A swap is an agreement between to parties to exchange assets, or a stream of revenue, based on a defined set of logic or rules. The agreement can be anything, often very exotic or bespoke contracts can lead to some swaps that are somewhat risky.

In the case of BCH Bull, the swap contracts pair leverage (multiplied price movement) against hedging (a stable price) to offer an instrument that balances the two sides of price instability.

The "Bull" gets exposure to more gains, but also risks the position may be liquidated resulting in nothing. A "Hedger" gets a stable contract (in fiat terms), and also may get some small rate of return based on the fiat value being hedged.

The return for the "hedging" side of the swap is a prebate, or "up front" coupon, for holding a position in a fiat amount. However, since the return requires locking funds to a non-BCH price, the rate of return is effectively on the non-BCH thing. So if a position pays about $1 to lock $100 for 30 days, it effectively acts as an interest bearing instrument on the $100 position, not the bitcoin side.

Cauldron: Automated Market.

A market is a place with established rules for people to trade goods with each other. A market can be a patch of dirt or a columned affair with damask curtains. Markets usually have minimal infrastructure to facilitate trade between parties―when everyone is done trading, the market should be an empty husk.

Cauldron is a micro market. The Caultron contract uses introspection to force a balance between tokens and coins held by the contract instance. Anyone may make a token market by funding both balances of the contract with some liquidity. Once created, anyone may exchange that token for coins or coins for tokens using the assets placed in the contract. When the market maker decides to end the market, they can simply withdraw their assets and the accrued fees.

The prices are set by the rule that: the amount of Bitcoin Cash times the amount of Tokens must always equal some constant or (bch_value * token_value = C). If a buyer knows the constant (C), and the balance of the contract, they may easily calculate how much it would be to trade for any assets on the contract.

Emerald DAO: Certificate of Deposit.

A certificate of deposit (CD) is a note showing the holder has some amount of cash on deposit. A CD is an interest bearing savings instrument for the holder; but for the writer (the bank) CDs can be a useful instrument to raise liquidity in the bank and reduce liquidity in the surrounding economy.

Bitcoin Cash doesn't have a bank, nor are there a lot of middle-men collecting transaction and overdraft fees. Since we saved so much money not having banks, it's easy for anyone to just be the bank and offer an incentive to lock coins.

EmeraldDao is a set of three contracts to 1) mint keys, for 2) lock boxes coins in 3) a one year timed "vault". The deposit window closed on June 15th 2023, and NFT box keys may be exchanged after May 15th 2024 for original deposits―along with a share of crowd-funded incentives.

The bonus reward paid beyond the principal are effectively an interest bearing instrument, but denominated in bitcoin.

Emerald DAO was the first on-chain UTXO instrument to effectively bear interest on coin denominated principal.

Future Bitcoin: Futures.

A futures contract is a standard agreement to buy or sell something at a predetermined price for delivery at a specified time in the future. While a swap (or forward) may be a one time unique custom contract between two parties, futures follow regular patterns and rules and are therefore more commodified for trading.

Futures don't yet exist on Bitcoin Cash. But if the future "thing" is to be delivered in the future. A trustless on-chain future would require an asset to be locked up-front and held for the duration of the contract.

The most popular asset on Bitcoin Cash is Bitcoin Cash, so Bitcoin Cash Futures Tokens is a flipstarter to develop software that makes it trivial for anyone to make a spread of futures contracts at regular intervals.

In addition to the Vault, there will be a "Coupon" contract to allow incentives for locking coins. So like Emerald DAO, but unlike AnyHedge, the reward is essentially fronted interest on the native coin denominated principal. And once coins are exchanged for fungible futures tokens, they can be traded on a DEX like Cauldron (unlike an AnyHedge position).

Gurus: Binary Swaps.

Tired of boring leverage swaps? Looking for something exotic? BCH Gurus got you covered.

BCH Gurus is a game to pair users in binary swaps. One user can postulate a future price, and another user may make another prediction to see which party is closer to the oracle reported price at settlement.

The second user may always have more information about the market than the first user, as they know more about the market (later in time) and the first user's guess.

Assuming price movement is random, the odds of "winning" the swap may be about even, with the second user having slightly better odds based on more available data.

Tapswap: Open Ask Market.

A market may be as simple as putting a price tag on something and letting others see it. It's an extremely effective way to sell almost anything, although not always at the best price.

Tapswap, the first CashTokens DEX, allows anyone to lock NFTs or Fungible Tokens (FTs) into a contract for purchase by anyone. Any CashToken can be sold simply by locking it listed for a price. There's a lot more involved with hosting a reliable app in a growing ecosystem and tapswap plays a really vital role in the Bitcoin Cash economy.

Unspent: Bitcoinized bitcoin or bitcoin squared.

Bitcoin still exists because of the "magic". Much like a Chinese cruise missile class called "aircraft carrier", bitcoin wins by engaging with prevailing monetary policy differently, through old math and new technology. There is nothing in traditional finance like Bitcoin Cash today.

The "magic" of bitcoin is just compound rates. It's the four year half-life schedule of inflation.

Unspent.cash lets anyone effortlessly take a number of coins and pay themselves on a 5.5 year half-life schedule of emission―as their own personal blockchain reward. It brings the superpower of bitcoin from the network level to the user level. The default Unspent dividends decay slower than the bitcoin half-life schedule, which, mathematically, would mean value goes up verses the overall chain.

Unspent dot cash is a unique opportunity in time. Much like trading one's birth right for a bowl of soup, the person trading away what was theirs forever will be on the losing side 100% of the time with absolute certainty.

There may be fake copies of unspent that allow people to spend, or undo, what was going to be theirs forever, but, like bitcoin itself, Unspent was designed to be irrevocable and one-way unstoppable for a very good reason. Spendable BCH is great, but the idea of Unspent is to stick to the plan.

Unspent is not incomprehensible, it's just using compound rates like bitcoin did.