Binance Labs invests in Bitcoin recovery protocol BounceBit
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Binance Labs, the venture capital arm of the cryptocurrency exchange Binance, announced an investment in BounceBit, a Bitcoin-domestic reaking protocol that combines the features of centralized finance (CeFi) and decentralized finance (DeFi).
The investment comes as Bitcoin DeFi (BTCFi) protocols gain traction ahead of the expected Bitcoin halving event on April 19. However, the exact terms and figures behind the investment were not disclosed.
BounceBit is designed to expand Bitcoin's use case beyond being a store of value by turning it into a productive asset with higher capital efficiency. The protocol's Proof-of-Stake (PoS) layer-1 ecosystem encourages validators to share both Bitcoin and BounceBit ecosystem tokens, creating a dual-token economy designed to improve Bitcoin's utility.
“Our mission is to build the rebuilding infrastructure to drive the use of Bitcoin, and we want to do it in a secure and transparent way,” said Jack Lu, founder and CEO of BounceBit.
The recovery infrastructure provided by BounceBit seeks to drive the use of Bitcoin using managed protection and multi-party computation (MPC) solutions. The protocol uses Ceffu Mirror X and Out-of-Exchange (OES) solutions to reduce associated risks. According to Yi He, Binance co-founder and head of Binance Labs, the BounceBit protocol combines centralized finance with decentralized finance (CeFi and DeFi) and “opens up new ways of using Bitcoin.”
According to BounceBit, their protocol currently serves over 110,000 users, with over $782 million in total value locked (TVL). The platform's focus on integrating CeFi and DeFi features has attracted the attention of Binance Labs, which has been looking for projects ready to shape the industry with innovative solutions.
The investment in BounceBit is part of a trend of growing demand for BTCFi protocols, as seen recently with the success of Merlinswap's Initial DEX Offering (IDO). The decentralized exchange raised 6,599 BTC, approximately $480 million, from more than 52,000 investors on April 5, demonstrating interest in Bitcoin-native DeFi solutions.
While BTCFi protocols have been on the rise in recent months, it remains to be seen whether they can match the level of innovation and adoption seen in the Ethereum-native DeFi protocol. With Bitcoin halving in a few days, more projects are entering the BTCFi space, and the competition to develop secure, transparent and efficient DeFi solutions on the Bitcoin blockchain is expected to continue to intensify.
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