At present, the Bitcoin ecosystem has become one of the most concerned topics in the crypto community. In addition to following FOMO’s inscription craze and various token protocols that are continuing to build, investors who are still on the sidelines are more concerned about the DeFi scene on the Bitcoin ecosystem.
With the sharp rise of various BRC tokens in the past month, the related assets in the Bitcoin ecosystem have accumulated to a considerable scale, and according to Coingecko data, the current market capitalization of the BRC-20 market has exceeded $600 million. With that comes the need for liquidity from investors in BRC-20 assets.
Recently, several DeFi protocols in the Bitcoin ecosystem have made new moves, which BlockBeats has compiled as follows:
Cross-chain bridges
A relatively efficient way to explore DeFi applications in the Bitcoin network without smart contracts is to bring BTC assets into public chains with smart contract functions such as Ethereum, and directly leverage its well-established DeFi infrastructure. Bridges are a critical infrastructure for Web3, and Bitcoin is no exception. Without a decentralized/composable bridge, dApps built on Bitcoin cannot integrate cross-chain liquidity, limiting their growth potential. This use case has given birth to some projects that focus on cross-chain Bitcoin assets.
MultiBit
Multibit is a bridging protocol that emerged in May of this year to connect BRC 20 assets to the EVM network, allowing users to seamlessly transfer tokens between ETH Chain, BNB Chain, and BTC networks. Multibit completed an IDO auction on Bounce Finance on November 12, raising 88 ETH. On November 4, he completed the IDO at the same unit price on the Bitcoin network donation platform TurtSat, raising 4.64 BTC. The two raised a total of about $350,000.
MultiBit simplifies the token transfer process between Bitcoin’s BRC 20 and EVM networks. First, users transfer BRC 20 tokens to a dedicated BRC 20 address. Once confirmed, the Multibit protocol comes into operation, minting an equal amount of tokens on Ethereum or BNB Chain. Multibit Protocol collects tokens from all distributed unique addresses. These tokens are securely transferred to a unified cold wallet. When a user needs to withdraw tokens, Multibit Protocol will burn the corresponding amount of tokens from the EVM chain. The equivalent tokens are then transferred from a secure cold wallet to the user.
Two weeks ago, MultiBit was highly watched by the community for the huge increase in its token MUBI. MUBI completed the Ethereum on-chain auction on the auction platform Bounce Finance on the 12th, with an IDO unit price of $0.00047 and raised 88 ETH. On the 14th, TurtSat, a donation platform on the Bitcoin network, completed the IDO at the same unit price, raising 4.64 BTC. The two raised a total of about $350,000. On November 14, MUBI opened up 1140%, and on the 16th, MUBI rose 122% in 24 hours, pulling up to $0.01385.
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On November 26, MultiBit launched a staking system. Users can stake $MUBI tokens to earn rewards in the form of ERC 20 or BRC 20 tokens on the Mutibit platform, and at present, users can stake NHUB and BSSB, and at the time of writing, more than 200 million MUBI have been staked on Mutibit.
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XLink
On November 24, Bitcoin DeFi platform ALEX announced that its cross-chain component, ALEX Bridge, will transform “XLink” into a unique entity.
In its announcement, XLink is positioned to “be the infrastructure that connects Bitcoin and its derivatives such as BRC 20, integrating Bitcoin Oracle, powered by ALEX, to enable a seamless and secure bridge between Bitcoin and Bitcoin L1 assets.” XLINK could provide Bitcoin with a “native-like” BRC 20 AMM or other DeFi applications.
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Before the spin-off of XLink, ALEX was an open-source DeFi protocol based on the Stacks public chain, and the current mainnet version features Swap, lending, staking, yield mining, and Launchpad.
LSD
Fairlight CDP
FairLight CDP is a collateralized debt position protocol that allows users to deposit BRC-20 tokens, borrow BRC-20 synthetic asset sats, and then deposit sats to earn a portion of the borrowing interest as rewards, and can use FCDP tokens to participate in protocol governance and share protocol fees. On November 28, Fairlight appeared on UniSat’s website as a partner.
The developers have deployed a BRC-20 token called “FCDP” with a total supply of 16, 180 (commemorating the birth of the natural logarithmic Dioler number e in 1618), with a limit of 1 per inscription. The developers minted 207 at the deployment address, which is 1.27% of the total supply, and now all the inscriptions have been minted.
Fairlight’s economic model aims to create a sustainable and growth-oriented DeFi ecosystem. The model revolves around the strategic use of SATS tokens and integration with the UniSat Swap module to create a stable and thriving environment for all participants.
In DeFi, a variety of financial operations such as lending, leveraged shorting, and arbitrage can be realized through CDP, so FairLight CDP is expected to bring more trading volume and liquidity to BTC-20. Its token, FCDP, has also been popular with the community, with UniSat data showing that its price has more than tripled since its launch less than 1 month ago. At the time of writing, its floor price is 0.01 BTC, and the total trading volume has exceeded 22 BTC.
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CEX
Orders Exchange
Orders Exchange is the first decentralized exchange (DEX) with an order book fully operational on the Bitcoin network, combining the Ordinals protocol, PSBT technology, Bitcoin Script, and the revolutionary Nostr protocol to create an interconnected full-chain trading marketplace. Last week, Orders Exchange launched a liquidity mining campaign.
PSBT (Partially Signed Bitcoin Transaction) is a standard format designed to simplify the processing of Bitcoin transactions that have not yet been finalized. PSBT was originally introduced in the Bitcoin Improvement Proposal (BIP) 174, and its core value lies in its ability to provide an efficient and secure collaborative process for transaction building, especially where multiple signatures are required. By using PSBT, entities involved in a transaction can independently sign incrementally without disclosing sensitive data to each other.
By leveraging PSBT and multisig technology, Orders Exchange can implement a completely trustless BRC 20 liquidity pool. The liquidity provided by the user is actually a PSBT single-signature asset pair, and its output points to a multi-signature address shared by the user and the exchange. This design ensures that exchanges cannot directly cash out PSBT and take away users’ assets, protecting the liquidity provider’s assets.
On November 24, Orders Exchange launched a 10-day “First Liquidity Mining on the Bitcoin Network” campaign, which aims to reward users for providing liquidity and executing transactions, and processing service fees for BID orders through buyback and burn. Users can be rewarded with $RDEX tokens for participating in the event. Currently, Orders Exchange holds more than 2.6 million RDEX in its liquidity pool, which is worth about 11 BTC.
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Stablecoins
BitStable
BitStable is a decentralized asset protocol based on the Bitcoin network, through which anyone can generate $DAII stablecoins collateralized against assets in the Bitcoin ecosystem anywhere. On November 29th, BitStable completed its IDO on the Bounce Finance platform, but due to a DDOS attack, there was an uneven distribution of tokens.
Related reading: “$BSSB was attacked when it was launched, BitStable was questioned by the community as “Rug””
BitStable has a dual-token system and a cross-chain compatible structure, with its tokens being $DAII and $BSSB. According to the official website, DAII is a stablecoin whose value and stability come from the robustness of the assets of the Bitcoin ecosystem, including BRC 20, RSK, and the Lightning Network, among others. In addition, with BitStable’s vision for cross-chain capabilities, DAII could also bring the Ethereum community into the Bitcoin ecosystem. The total supply of $DAII is 1 billion.
BSSB is the governance token of the platform that is used by the community to maintain the system and manage DAII, and BitStable also incentivizes holders of $BSSB through dividends and other measures.
Conclusion
In addition to the DeFi protocols listed above, there are also some early-stage DeFi protocols in the Bitcoin ecosystem, such as ALEX, an open-source Bitcoin DeFi platform based on the Stacks ecosystem, whose tokens have risen by more than 40% in the past two weeks. In addition, MoneyOnChain, a lending protocol on the Bitcoin sidechain RSK, and Sovryn, a DeFi platform, have also amassed some liquidity.
BlockBeats reminds that the development of DeFi applications in the Bitcoin ecosystem is still in its infancy, and the risk of uncertainty is high, so investors are advised to fully understand the protocols involved, assess their own risk tolerance, and make prudent decisions before making any investment decisions.
