Bitcoin Joins the DeFi Ecosystem
Bitcoin L2 Labs, the core development team behind Stacks, announced the successful launch of the programmable 1:1 Bitcoin-backed asset sBTC on the mainnet. It marks a significant step towards establishing an on-chain Bitcoin economy and follows October’s Satoshi upgrade, which provided the Stacks network with faster transaction speeds and 100% Bitcoin finality.
This is more than just a milestone for the broader Bitcoin community – it marks the dawn of a new era of programmable Bitcoin. The world’s most secure blockchain can now actively participate in decentralized finance (Decentralized Finance).
sBTC debuts on Stacks mainnet
sBTC is designed to unlock Bitcoin (Bitcoin) liquidity, then Stacks launches Nakamoto upgrade Late August. It will allow BTC holders to access DeFi opportunities while retaining Bitcoin’s unparalleled advantages Safety in principle.
Specifically, users can participate in DeFi applications, such as lending on protocols such as Zest, Decentralized exchange (Decentralized exchange), such as Bitflow and ALEX, or even artificial intelligence-based tools such as aiBTC.
“Unlike locking BTC Proof of Stake system, sBTC has full expressive capabilities and supports the on-chain Bitcoin economy. It can power decentralized lending, DEX, artificial intelligence robots, etc., while inheriting 100% Bitcoin computing power security. ” Stacks founder Muneeb Ali said in a press release shared with BeInCrypto.
One of the key features of sBTC is 1:1 Bitcoin support, with the pioneer cryptocurrency fully collateralizing each sBTC token. Second, a network of institutional signers reduces reliance on a single entity, thereby enhancing trust.
Additionally, sBTC is 100% Bitcoin final, meaning it is protected by Bitcoin’s computing power, ensuring strong security. Additionally, the product has transparent open source code, providing transparency and verifiability to developers and users.
Nonetheless, the current mainnet phase introduces a deposit-only feature with a cap of 1,000 BTC. Notwithstanding this limitation, this cap will provide an initial Liquidity Provide assistance to developers and enable further integration with institutional custodians and ecosystem partners.
According to the press release, withdrawals will open in the first quarter of 2025 as the system transitions to a fully open, permissionless set of signers. Depositors who hold this asset will also receive annual rewards of up to 5% of sBTC, providing investors with a unique income opportunity Bitcoin holders.
Unleashing Bitcoin’s Full Potential
At the same time, the launch of sBTC will bring Bitcoin closer to Ethereum’s dominance in the DeFi space. Ethereum’s total value locked (TVL) is nearly $80 billion, according to DefiLlama dataBitcoin is rapidly approaching after flipping Binance Smart Chain (balanced scorecard).
The successful launch of sBTC has laid the foundation for a stronger Bitcoin Layer-2 ecosystem. The phasing out of Bitcoin caps, the introduction of withdrawals, and the transition to a permissionless signer network may drive further adoption. With sBTC, Bitcoin is no longer just a store of value, but a versatile asset for decentralized applications (dApps).
Andre Serrano, product director of Bitcoin L2 Labs, emphasized: “With sBTC, Bitcoin becomes more than a store of value, thereby unlocking BTC’s full potential in decentralized applications.”
This development also increases opportunities for DeFi builders. For example, Zest Protocol allows users to earn additional rewards while holding sBTC.
“Earn more Passion Points. Thanks to the Stacks rewards program, users can earn 5% just by holding sBTC. With Zest, users can significantly increase their earnings with sBTC,” the platform famous.
As Bitcoin capital flows into DeFi protocols, builders, developers, and users will benefit from enhanced liquidity and innovative financial tools.
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