Bitcoin Decentralized Finance (DeFi)

[titular]

Bitcoin DeFi projects have been a huge focus for companies like Square. Jack Dorsey has been working with his team to create a DeFi business built on Bitcoin's rails.

It has been reported that there are around 26 active Bitcoin-related DeFi projects. That is just what Square is doing.

As we are all aware, DeFi projects have been primarily dominated by the likes of Ethereum & Binance Smart Chain. Projects like Aave, Uniswap, Compound, and PancakeSwap already have tens of billions of dollars locked up in their network. This will grow exponentially.

It seems rather clear these DeFi projects will take place on sidechain/layer-2 solutions. The on-chain network is currently not fit for these projects.

Regardless of the technical aspects, however, I am wondering if Bitcoin DeFi will be able to draw similar liquidity to what we are seeing in ETH & BSC. Will Bitcoin DeFi be able to compete?

Will we be able to offer the same yields?

Will it be as effective/efficient as DeFi on other networks?

Could Bitcoin DeFi be superior?

Assuming Bitcoin devs (not just Square's) are able to create a system that is both efficacious and secure, I believe that it could become the primary DeFi network.

This is much easier said than done, however, and is certainly an uphill battle.

Then again, maybe the goal isn't to be #1 in DeFi.  

What do you folks think a Bitcoin DeFi network would look like? Do you think we would see anything truly unique?

[pooya87]

There is a serious flaw with all token based contracts which is the fact that the token can be and will be traded. When that token is traded (more commonly pumped and dumped) it will overshadow the underlying contract and what the smart contract was meant to do.
The result is that all these contracts (DeFi, etc.) are only used to raise funds and then make profit from the pump and dumps. Which is why they all remain useless in real world and also why hyped up platforms such as ETH are dominating the scene because it is easier to sell garbage on something that is already hyped up compared to selling it on a new platform that is safer and cheaper but isn't hyped up.

[Oshosondy]

What I am still concerned about is how the fee (I mean the transaction fee) of bitcoin could be while making transactions (I mean the onchain fee), when BSC is already existing which people can make use of with very low fee, including ethereum which its fee is though high but bitcoin fee will be slightly higher. Both ERC20 and BSC20 are existing already and there will really be need to have a bitcoin smart contract that can be used to make use of low fee effectively. Although, people like bitcoin because it has the highest marketcap which will make it for large number of people to make use of its tokens.

[Bttzed03]

What I am still concerned about is how the fee (I mean the transaction fee) of bitcoin could be while making transactions (I mean the onchain fee), when BSC is already existing which people can make use of with very low fee, including ethereum which its fee is though high but bitcoin fee will be slightly higher.

OP already pointed that out and mentioned sidechains and/or layer 2 solutions. I also read an article about how Taproot will improve privacy, scalability, and even open the possibility for smart contracts.

Regardless of the technical aspects, however, I am wondering if Bitcoin DeFi will be able to draw similar liquidity to what we are seeing in ETH & BSC. Will Bitcoin DeFi be able to compete?

Maybe yes, maybe no. It all depends on how the greater crypto community thinks of it.

[Oshosondy]

OP already pointed that out and mentioned sidechains and/or layer 2 solutions.

If the lightning network will be supported, it will really be good, but will the lightning network be used with bitcoin DeFi tokens for making transactions also? This will really be nice because it can also help in lightning network adoption. But the issue of scaling solution is still the talk about bitcoin. If DeFi is introduced into bitcoin, that means more people will make bitcoin transaction when their is no effective scaling solution unlike the BSC except the lightning network. If people will make use of the bitcoin lightning network effectively, it will be a good solution for the scaling process.

[davis196]

We will have to wait and see what happens with these Bitcoin DeFi projects.
I'm pretty skeptical about this.So far,I have never seen a really successful DeFi project,that was based on ethereum or any other altcoin.I don't think that Bitcoin based DeFi projects will be any different.

Assuming Bitcoin devs (not just Square's) are able to create a system that is both efficacious and secure, I believe that it could become the primary DeFi network.

I don't think that the Bitcoin Core developers will bother with creating a DeFi network.
They have other things to do.If you want something secure and effective,just stick to Bitcoin Core and forget about second layer or third layer solutions.

[ethereumhunter]

Bitcoin DeFi can compete among the other DeFi projects but to compete with bitcoin itself, I am not sure because bitcoin is bitcoin, bitcoin DeFi is bitcoin DeFi and is running in a different way. But as of now, we know that bitcoin still leads the crypto market, maybe those DeFi projects are still behind bitcoin and only time will answer about that. But for sure, the trend will always change and if DeFi trend still shows good progress, that is because people still are interested in the DeFi projects.

[Xinarae*]

Bitcoin is decentralized and cannot rise to the top by competing with this currency. Bitcoin is on top of everything in the crypto market same situation for defi projects although these defi schemes are well positioned in the market they cannot compete with bitcoin is still the king of the field of cryptocurrency the dominance index and the recently updated ETH are obvious. By investing in any asset and using it in the defi ecosystem it is now possible to make money in cryptocurrency realm.

[Scarlett7777]

Bitcoin DeFi projects have been a huge focus for companies like Square. Jack Dorsey has been working with his team to create a DeFi business built on Bitcoin's rails.

It has been reported that there are around 26 active Bitcoin-related DeFi projects. That is just what Square is doing.

As we are all aware, DeFi projects have been primarily dominated by the likes of Ethereum & Binance Smart Chain. Projects like Aave, Uniswap, Compound, and PancakeSwap already have tens of billions of dollars locked up in their network. This will grow exponentially.

It seems rather clear these DeFi projects will take place on sidechain/layer-2 solutions. The on-chain network is currently not fit for these projects.

Regardless of the technical aspects, however, I am wondering if Bitcoin DeFi will be able to draw similar liquidity to what we are seeing in ETH & BSC. Will Bitcoin DeFi be able to compete?

Will we be able to offer the same yields?

Will it be as effective/efficient as DeFi on other networks?

Could Bitcoin DeFi be superior?

Assuming Bitcoin devs (not just Square's) are able to create a system that is both efficacious and secure, I believe that it could become the primary DeFi network.

This is much easier said than done, however, and is certainly an uphill battle.

Then again, maybe the goal isn't to be #1 in DeFi.  

What do you folks think a Bitcoin DeFi network would look like? Do you think we would see anything truly unique?

I think the era of DeFi has just begun, and there is still a long way to go. The functions and applications are only used by a small group of people. A large part of the population has not really understood DeFi. In addition, I think the reason why Ethereum DeFi is popular now is Because he has a center to promote forward development, and Bitcoin DEFI has almost no one or more influential people to push forward. I still look forward to the launch of Bitcoin DeFi, because it will be able to leverage more funds, I look forward to it. I will also do my best to do something for it.

[leea-1334]

Then again, maybe the goal isn't to be #1 in DeFi.  

What do you folks think a Bitcoin DeFi network would look like? Do you think we would see anything truly unique?

He probably has not experienced how defi actually looks. If crypto is a terrible, scammy space,,, full of speculators and wannabes,,, defi is where the worst of them go to. Nobody cares about adoption or utility or whatever nice things decentralized finance is supposed to do. It is just pure profit and who gets out first.

[Jontokhan65]

What I am still concerned about is how the fee (I mean the transaction fee) of bitcoin could be while making transactions (I mean the onchain fee), when BSC is already existing which people can make use of with very low fee, including ethereum which its fee is though high but bitcoin fee will be slightly higher. Both ERC20 and BSC20 are existing already and there will really be need to have a bitcoin smart contract that can be used to make use of low fee effectively. Although, people like bitcoin because it has the highest marketcap which will make it for large number of people to make use of its tokens.

Many people today are concerned about Bitcoin free. BSc already exists because there is less free in current BSc. Ethereum may have been less free in the past but now Ethereum takes more free so everyone uses BSc and what is paid for BSc in most bounties. It is true that both ERC20 and BSC already exist. Bitcoin needs to be a smart deal, if it is, it will be less free. Bitcoin is currently used in most countries.

[dkbit98]

I would not trust big tech and Jack Dorsey with anything he is working on including his hardware wallet and so called BitcoinDefi, as we know he is great in censoring people and following orders.
Even if he creates some defi on Bitcoin second layer or side chain, this will most likely be with mandatory ID verification and all information will be sent to BigBrother.
I won't compared this with defi on eth or bsc because they are not truly decentralized, especially BSC chain that is operated by CZ and his friends.

[electronicash]

there aren't so many of them since they are only 26. i'm not very familiar with the project if you mean those Square, BLockFi and the likes, then it's very centralized. there are yields to earn it's the trust that you will worry about because they are going to ask KYC but its true that they are getting attention to investors.

if there is one Bitcoin DEFI i would suggest it's the Sovrign. it's not very popular despite its marketing in the forum but it's working great. it's working on RSK platform.

[titular]

We will have to wait and see what happens with these Bitcoin DeFi projects.
I'm pretty skeptical about this.So far,I have never seen a really successful DeFi project,that was based on ethereum or any other altcoin.I don't think that Bitcoin based DeFi projects will be any different.

Assuming Bitcoin devs (not just Square's) are able to create a system that is both efficacious and secure, I believe that it could become the primary DeFi network.

I don't think that the Bitcoin Core developers will bother with creating a DeFi network.
They have other things to do.If you want something secure and effective,just stick to Bitcoin Core and forget about second layer or third layer solutions.

I think it is quite evident that L2's will have a major role to play in the adoption of Bitcoin. The base layer can only handle so much.

I can't see a way we can reach global adoption without L2's.