The Bitcoin -based DEFI carries tremendous potential

For years, Defi He was synonymous with Ethereum and other smart contract platforms. But Bitcoin, the largest and most secure, now appears as an important player. This carries tremendous potential for the entire encryption space.

according to DeviliaThe total value that was secured in BTCFI protocols increased from $ 307 million in January 2024 to $ 6.6 billion in February 2025 – an amazing increase of 2050 %.

BTCFI allows users to win the return and trade and benefit from their coins without relying on central intermediaries. Many BTCFI protocols already allow recovery, borrowing lending, and bitcoin assets. The latter includes stablecoins, and LifeBlood of Defi. Last news about Usdt integration with lightning network It represents a great teacher, which is likely to open the huge liquidity of the sector.

How BTCFI works

The main way to bring Bitcoin to Defi has long been through BTC wrapped. This method includes BTC lock on Bitcoin, version of an ethereum and other chains. However, this approach carries the risks. The assets are wrapped on the bridges that are prepared or semi -central, which are vulnerable to penetrations and the failure of governance.

The alternative approach is the signing scheme. The method of encryption allows this multilateral control over the Bitcoin portfolio without exposing special keys. TSS allows the original BTC nursery without a single failure point, which makes it a reliable solution to the applications of the non -will chain and the return protocols.

Besides TSS, Bitcoin Layer-2 solutions such as Lightning, Liquid or RootStock provide additional ways for BTCFI applications. These networks allow the features of the advanced smart nodes on Bitcoin.

Earn the return on bitcoin

Bitcoin has long been proud of hunting. With the appearance of BTCFI, they can place their inactive metal currencies, while maintaining control.

The promising promising strategies are recovery and borrowing lending.

Bitcoin Restking is a new concept that allows BTC holders to lock their origins in smart contracts that secure other networks or specialized protocols. By doing this, users provide a safety or a Blockchain additional and DAPS. On the other hand, they receive rewards for their participation. Babylon, the largest BTCFI protocol with $ 5.4 billion in TVL, TSS and multi -signature portfolios to facilitate recovery via Blockchain layers.

Borrowing protocols that lend users allows the benefit of BTC lending. They can also borrow BTC against a warranty, usually exceeding the loan amount. Traditional borrowing protocols for Defi lending, such as AAVE, Makerdao or Curve, are used, bitcoin wrapped. BTCFI lending protocols using the original Bitcoin mainly on Sidchains Bitcoin, such as Sovryn, based on Rootstock (RSK).

Bitcoin trading on Dexs

Currently, most of the decentralized stock exchanges are used with a wrapped bitcoin. However, there are some Dexs that enabled the use of the original BTC, allowing users to maintain control of their coins.

The most popular is Thorchain (run), which uses TSS method, allowing the original BTC bodies without a central bridge. Thorchain is designed on the Cosmos software development group and supports eight panels.

Another BTCFI Dexs includes Stackswap, which is designed on Bitcoin Layer-2 and BISQ chimneys, DEX outside the chain that uses a multi-signature guarantee.

Bitcoin assets code

While Bitcoin was not originally designed to issue a distinctive symbol, new technologies and standards made it possible.

The command protocol, which was launched in January 2023, has quickly gained popularity by enabling the creation of distinctive symbols on the chain. As of today, the Bitcoin network is registered with an average of 117,000 delegated transactions (BTC-20) and 5,000 non-transitional transactions (NFT) daily, according to Sandin dune analyzes. However, orders may not be the best way to a bitcoin -based symbol. They are intense for space and can barely be combined into Defi protocols.

The Bitcoin-2 layer such as RGB, liquid and Lightning (with TAPROOT assets) provides a more effective and effective way in the distinctive symbol on Bitcoin.

On January 30, Tether, The Stablecoin Leader, and Lightning Labs, released the team behind Taproot Assets, an important advertisement. Tether will integrate with the Lightning Network, with both transactions on the chain and support for the lightning network. This represents the transformation of a model. To date, StableCoin Supply focused on Ethereum ($ 138 billion, or 59 %) and TON ($ 63 billion, or 27 %), according to Sandin dune analyzes. This is due to the previously advanced Defi sector and low fees for the latter. With USDT to Bitcoin, BTCFI can capture a large share or create an additional stablecoin supplies.

This can open new liquidity flows and create a large activity on bitcoin. As of now, $ 150 billion of USDT generates more than one trillion dollars in the monthly trading volume Coingecko. The current monthly Bitcoin size on the series is about $ 2.1 trillion. If you can demand 59 % market share in the USDT size, this means an increase of 28 % in Blockchain’s activity. Thus, this can also change the dynamic fees for miners.

BTCFI acquires the land. Although some Bitcoiners are concerned about a possible rise in fees (whether on communication or on the lightning network), the bullish trend of BTCFI is massive. With the BTC investment funds gaining, BTCFI offers an uncontricane and unclear method for actively using Bitcoin, and staying loyal to the old saying: “Not your keys, not your coins.”