So with the BTC supply about to run low soon, some interesting questions are starting to surface:
1. What if every single BTC gets bought up?
2. How do we keep an eye on liquidity after that?
3. Are we at risk of price manipulation?
The way to answer these concerns is to give Bitcoin some real utility. The way to get there might be through "defi" essentially making Bitcoin L1 programmable and unlock that $4 trillion in liquidity.
Babylon has opened the door for DeFi on the Bitcoin network by allowing native BTC staking with the cosmos SDK, though it’s not on Bitcoin L1, which causes liquidity fragmentation. Now, Bitcoin developers are starting to create a real "defi" Bitcoin network, and one of the first protocols is Portal to Bitcoin. This will allow for native swaps between ETH, SOL, and BTC using PTB as the network fee.
As someone who's played around with this protocol using a native wallet, I feel pretty optimistic that DeFi can happen on Bitcoin L1. Who knows, the upcoming launch of PTB, which is supposed to hit major exchanges like BG soon, could be just the boost we need to bring DeFi to Bitcoin.
DeFi on Bitcoin L1 will never be a good idea to me. Bitcoins strength has always been its simplicity and security. Adding extensibility risks turning it into the same playground weve seen on other chains. If people want DeFi, there are already ecosystems built for that. Bitcoin doesnt need to copy them, it just needs to remain the most secure, permissionless money.
Early days for portal, let's see if the momentum can be sustained for a longer period. For PTB since it's a utility token for portal & with the potential the project has, I've gone hard to farm it on Bitget launchpool.
few hours now and here's my allocation, hopefully I get a considerably amount from this and beging my holding joining ahah.
That's unlikely to happen because Bitcoin wasn't designed for that purpose. Those are just speculations or guesses from people like you, OP.
Do you really think Nakamoto created Bitcoin for DeFi? You know that's not true. Besides, no one knows what will happen in the future.
Have you already been to the future?
BTC will reach max supply of 21 million in 2140 therefore no more block reward, by then we'd be turned to dust already.
The BTC that haven't been minted aren't drying up anytime soon.
Bitcoin already have utility through RGB + lightning and some L2. It already gone defi if really care about it.
1. Nothing happen.
2. As long as there will always be demand for Bitcoin. Liquidity will remain there forever.
3. We're not gonna be vulnerable to the price manipulation. As you can see how some insitutional bought billions of BTC and it drives the price up. Otherwise, the price can also down of those insitutional sell their Bitcoin.
Imo, Defi for Bitcoin means nothing as it's only working for wrapped BTC, not native BTC. Just ignore it as it's only giving small yield and not worthy to try. All of these BTC defi did were just selling name of Bitcoin, raised funds from VC, issue their own tokens, and run away with money.
Nakamoto's primary vision was for BTC to be the currency of web3 and enable financial freedom. How can that be if tha Bitcoin economy is not universally accessible?
Blockchain technology evolves everyday to make it better; defi will definitely make Bitcoin better and more accessible.