Binance Labs shifts investment focus to Bitcoin DeFi

Binance Labs, the venture capital (VC) arm of the world's largest cryptocurrency exchange, has announced an investment in the Bitcoin-domestic reaking protocol BounceBit.

BounceBit combines the features of centralized finance (CeFi) and decentralized finance (DeFi) in an effort to create an additional utility for Bitcoin (BTC), Binance co-founder and head of Binance Labs Yi He wrote in an April 11 announcement:

“BounceBit opens up new ways to use Bitcoin through the integration of CeFi and DeFi. At Binance Labs, we're always looking for innovators who are shaping the industry, and we look forward to watching their progress as they achieve their mission of empowering Bitcoin through secure and transparent CeDeFi solutions.”

BounceBit is one of a new wave of protocols that aim to bring DeFi capabilities to Bitcoin in a new style of technology known as Bitcoin DeFi (BTCFi).

BounceBit aims to expand Bitcoin's use case from a store of value to a productive asset for greater capital efficiency.

The Proof-of-Stake (PoS) layer-1 ecosystem encourages validators to share both Bitcoin and BounceBit ecosystem tokens as part of the dual-token economy.

According to Jack Lu, founder and CEO of Bouncebit, the Bitcoin-native bounce infrastructure aims to create more utility for Bitcoin.

“Our mission is to build a staking infrastructure to advance the use of Bitcoin and we want to do it in a secure and transparent way. Our focus on CeDeFi and developing a strong staking ecosystem is just the beginning. We are grateful to have Binance Labs' support in this effort.”

Binance Labs became an independent venture capital arm after breaking ties with the Binance exchange in March, where its portfolio exceeded $10 billion. It has covered more than 250 projects from 25 countries and has returned more than 14 times the amount of investment.

BounceBit currently serves more than 110,000 users and has more than $782 million in total value locked (TVL), according to its homepage.

Related: Within 10 days of halving, analysts predict $150K Bitcoin peak

BTCFi is rising before Bitcoin halving.

While a Bitcoin-native DeFi was thought impossible a few years ago, BTCFi protocols are already pulling ahead of the Bitcoin halving scheduled for April 19th.

Demonstrating interest in BTCFi, decentralized exchange (DEX) Merlinswap raised $480 million in its initial DEX offering (IDO) of 6,599 bitcoins to more than 52,000 investors on April 5.

The IDO of the record was a proof of market demand for BTCFi, which could become similar to Ethereum in the future of DeFi innovation. Merlinswap co-founder Nash Lee told Cointelegraph:

“This shows the community's eagerness to participate and move the DeFi revolution forward on the Bitcoin platform. There is a huge shift in the DeFi space towards realizing the untapped potential of Bitcoin, demonstrating the widespread demand for innovative decentralized financial solutions built on the world's first cryptocurrency.

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