Bringing DeFi into the Bitcoin ecosystem

Hey everyone, the title pretty much says it all. What projects are currently making waves or have recently launched? I'm not just talking about those that focus on a single service like staking or loans, but more about those that offer a range of features like tokens and the associated smart contracts.

Your question is a bit technical but from what I understand so far, if you’re looking for real token logic on Bitcoin the most solid things to check out right now are RGB, Taproot Assets and the ongoing OP_CAT work. RGB keeps most of the data off-chain which avoids bloating the Bitcoin network. Taproot Assets aims to let tokens move over Lightning and OP_CAT could make Bitcoin’s native scripting more flexible if it ever gets activated. From everything I’ve learned about the Bitcoin ecosystem, these are the projects that are actually pushing Bitcoin’s programmability forward.

If you mean "Ethereum-style Lego DeFi but with BTC as the base asset", you kind of have three different families to look at, and they solve different problems. What Donneski listed is the "keep it on Bitcoin + Lightning" camp: RGB, Taproot Assets, and maybe OP_CAT down the road. That's where you'll see token issuance, simple business logic, and settlement staying very close to L1, but it's still early, tooling is rough, and composability is nowhere near what you're used to on EVM. Then you've got the "use another chain but anchor to BTC" crowd like Liquid, Rootstock, Stacks, BitVM experiments, etc. That's where you'll find more familiar DeFi primitives today, but you're trading off trust assumptions and moving away from pure Bitcoin script.

Since you don't mention your criteria, each member may give different answer. Anyway, Rootstock is probably what you're looking for. It has been around for years with merge mining with Bitcoin network, EVM (Ethereum virtual machine) support and DAO feature. You also may want to see https://www.bitcoinlayers.org/site that list Bitcoin sidechain, layer 2 and similar stuff.

Another option to consider is STX or stacks. It’s different from ethereum’s as it uses Proof of Transfer. A little less flexible but more secure as it is still anchored to bitcoin’s security. It’s just more on the safe and predictable side but still very much functional. The ecosystem is still a bit smaller compared to that of ethereum but it’s growing.