The first decentralized finance (DeFi) firm to launch a user-friendly suite of merchandise on Bitcoin will “win the entire market” of the blockchain’s 300 million customers, one crypto founder says.
Alexei Zamyatin, the co-founder of the Bitcoin layer 2 Build on Bitcoin, informed Cointelegraph at TOKEN2049 in Dubai that “the advantage of Bitcoin DeFi is that the market is much bigger, you have a much bigger retail user base that you can tap into.”
“It’s not easy to convert it, but if you manage to win in Bitcoin DeFi, you win the entire market.”
Zamyatin mentioned the 300 million Bitcoin customers would imply DeFi providers on the blockchain would “outgrow everything we’ve seen so far in Ethereum and Solana.”
Build on Bitcoin is likely one of the corporations seeking to win market share, providing a hybrid layer 2 resolution that mixes Bitcoin’s safety with Ethereum DeFi capabilities via BitVM, a platform that processes Turing-complete Bitcoin contracts.
Zamyatin argued that Bitcoin-native bridges are mandatory for DeFi on Bitcoin because the blockchain’s safety is powerful, nevertheless it lacks the human expertise, instruments and community results of Ethereum.
Zamyatin mentioned Bitcoin (BTC) yield and stablecoin merchandise are driving sturdy demand for Bitcoin-based DeFi.
“A lot of institutions that are buying Bitcoin now usually have to find yield on the assets they hold. So Bitcoin yield is becoming a very hot and highly sought-after thing.”
Demand for Bitcoin-backed stablecoins can also be skyrocketing as a result of Bitcoin is the “best collateral,” Zamyatin added.
What if we tokenized the Bitcoin ETF so establishments may get entry to DeFi yields? pic.twitter.com/2HCpwbCZDS
— alexei (@alexeiZamyatin) April 10, 2025
Bitcoin staking has change into the primary DeFi use case outdoors of funds, which entails Bitcoin holders locking their cash in self-custodial vaults or extractable one-time signatures to earn staking rewards on proof-of-stake blockchains like Ethereum.
The Babylon Protocol is presently main this market with $4.64 billion price of worth locked, representing almost 80% of all worth locked on Bitcoin, DefiLlama data reveals.
Bitcoin’s DeFi TVL remains to be a fraction of the $54.6 billion price of worth locked on Ethereum.
Bridging options a controversial matter
Zamyatin acknowledged the quite a few hacks on blockchain bridges, however argued most of these incidents resulted from groups failing to manage their private keys, reasonably than from smart contract vulnerabilities.
While competitors within the retail market is broad open, Zamyatin famous that many establishments nonetheless hesitate to make use of bridges, that enable customers to maneuver worth between incompatible blockchains.
Related: Bitcoin NFTs, layer-2 and restaking hype ‘completely gone’
Efforts have been made to extend the variety of bridge signers from 5 to 50 in some circumstances, Zamyatin famous.
However, establishments have been reluctant to undertake these options as a result of they usually don’t know who’s signing the transactions.
For instance, the Ren Protocol’s RenBTC operates by way of a decentralized community of nodes referred to as Darknodes, which signal transactions to lock BTC and mint RenBTC to make use of on different chains.
However, establishments proceed to keep away from these protocols as a result of diploma of anonymity concerned and as a substitute decide to make use of trusted custodians like BitGo and Coinbase Custody for such actions.
Magazine: ZK-proofs unlock trillions in Bitcoin for DeFi — BitcoinOS and Starknet
Additional reporting by Ezra Reguerra.
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