- DeFi on Bitcoin is gaining momentum despite extreme market conditions that caused Bitcoin’s market dominance to dwindle.
- The growth of DeFi on Bitcoin has made the network much more competitive.
- With options from Rootstock and Stacks to DeFiChain and Portal, some believe that there is a bright future for DeFi on the Bitcoin Network.
Decentralized finance (DeFi) on the Bitcoin network is gaining momentum despite extreme market conditions that caused Bitcoin’s market dominance to dwindle, sources say.
According to the source, the growth of DeFi on Bitcoin has made the network much more competitive. The network has seen Layer-2 and Layer-3 DeFi projects, such as Portal and DeFiChain, gathering traction. This is despite Bitcoin’s (BTC’s) dip in market dominance below 50% for several months.
Notably, DeFi is a technology based on secure distributed ledgers similar to those used by cryptocurrencies, leveraging the blockchain to provide users access to financial tools without relying on middlemen.
Portal is a self-hosted Layer 2 wallet and DEX on the Bitcoin network. As a DeFi building on top of the Bitcoin blockchain, it promises to offer asset issuance, swaps, and staking, among others. Furthermore, it assures complete anonymity within open, transparent markets.
On the other hand, DeFiChain is a hard fork of the Bitcoin network that enables users access to DeFi services paired with Bitcoin’s security and provenance. This allows more advanced DeFi applications through custom transactions.
Also, DeFiChain offers decentralized assets (dAssets) on Bitcoin, including dTSLA, which can be minted by any user on the DeFiChain blockchain. The asset gives holders price exposure of actual assets like stocks without leaving the DeFi space.
Compared to networks such as Ethereum, Cardano, and Solana, Bitcoin is considered by some fairly new when it comes to DeFi. Since Bitcoin’s core network does not support smart contracts, it taps networks Rootstock (RSK) and Stacks to provide such functionality. Rootstock, in particular, is a Bitcoin sidechain that acts as a smart contract network for instant payments and higher scalability of dapps.
With options from Rootstock and Stacks to DeFiChain and Portal, some believe that there is a bright future for DeFi on the Bitcoin Network, enabling long-term BTC holders to tap into passive revenue streams.