The creation of BTCFi in the future related to Ethereum DeFi – Merlinswap co-founder
Bitcoin Decentralized Finance (DeFi) or BTCFi is a recent example that seeks to bring DeFi capabilities to the world's first blockchain network. If current adoption rates continue, BTCFi could match Ethereum-based DeFi innovation in the future.
This is what Merlinswap co-founder Nash Lee told Cointelegraph:
“[Market appetite] It requires broad platforms that can handle increasing volumes and expectations. DeFi stands out as the only sector with the potential to leverage this narrative, providing a sustainable ecosystem for Bitcoin's evolving use cases. This dynamic sets the stage for the innovation and sophistication of Bitcoin DeFi to match the innovation and sophistication seen in the Ethereum DeFi ecosystem.
Demonstrating investor interest in Bitcoin-native DeFi applications, decentralized exchange (DEX) MerlinSwap added 6,599 Bitcoin (BTC) worth $480 million.
The record IDO is a testament to the market's interest and confidence in Bitcoin-native DeFi applications, Lee says.
“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.
MerlinSwap is built on the Bitcoin Layer-2 network Merlin Chain. It surpassed the $100 million (TVL) mark on April 4, according to Merlinswap.
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Bitcoin Ordinals was the first step to BTCFi
BTCFi emerged following the introduction of the BRC-20 token standard, which enabled the creation of non-fungible tokens (NFTs) on the Bitcoin blockchain for the first time.
Bitcoin-native NFTs, also known as Ordinals, are mapped directly onto satoshis (sats), giving them a permanent home on the Bitcoin network, unlike most NFT collections, where images and metadata are stored on central servers, creating potential vulnerabilities.
Demonstrating interest in Bitcoin-native NFTs, Dunn said that less than a year and a half after the first ordinal was written in December 2022, the network surpassed 64.1 million ordinal inscriptions.
Outside of the norm, the emergence of Bitcoin Layer-2s is another significant aspect of BTCFi, which ultimately gives Bitcoin more use cases. Lee said:
“Prior to the advent of Layer-2 solutions, Bitcoin's native assets lacked practical applications, limiting BTC's role to digital gold. The emergence of Bitcoin Layer-2 technologies is a game-changer, opening up enormous possibilities for BTC assets.
Related: Historical data suggests that the 2028 Bitcoin halving price target is $435,000
