What If DeFi Fully Migrated to Bitcoin Layer 1?

[HawkTrader]

With Bitcoin's immense dominance and unmatched market cap, imagine if DeFi was fully built on Bitcoin Layer 1, but with:

- Full composability (no bridges or wrappers needed)

- High scalability

- Full smart contract support

- Rollback options for critical events

If such a system became reality, would developers and builders flock back to Bitcoin, given its strong adoption and network effect?

And if that shift happens—what would become of Ethereum, Solana, and other DeFi-native chains that have long been the playground for innovation? Would they become obsolete, or would they evolve to remain relevant?

[pooya87]

What if apples tasted like oranges?

You can't have any kind of token creation inside Bitcoin protocol at all. That's simply because Bitcoin protocol does not have that capability and for good reasons. Bitcoin is a payment system not a token creation platform.
When you see some people on the internet refer to some garbage as "token on bitcoin blockchain" is a scam. None of them are real tokens, they are arbitrary messages injected into bitcoin's blockchain to scam people with.

Similarly you can't really call platforms like Ethereum, Solana, etc. payment systems because they are designed to be token creation platforms and their protocol is specifically designed to do that. This is why for example ether is called "fuel for smart contracts" instead of being a currency.

[TastyChillySauce00]

Bitcoin's L2 already exist for that, truth is if you migrate such thing to bitcoin blockchain, the blockchain will be spammed heavily like how ordinals played out.

On the other hand you got L2 that was created to handle such thing and help smart contract to integrate to bitcoin.
Bitcoin's blockchain is already perfect as it is. If you care to look around, you'd find there are actually tons and tons of L2 of bitcoin.

[HawkTrader]

What if apples tasted like oranges?

You can't have any kind of token creation inside Bitcoin protocol at all. That's simply because Bitcoin protocol does not have that capability and for good reasons. Bitcoin is a payment system not a token creation platform.
When you see some people on the internet refer to some garbage as "token on bitcoin blockchain" is a scam. None of them are real tokens, they are arbitrary messages injected into bitcoin's blockchain to scam people with.

Similarly you can't really call platforms like Ethereum, Solana, etc. payment systems because they are designed to be token creation platforms and their protocol is specifically designed to do that. This is why for example ether is called "fuel for smart contracts" instead of being a currency.

You're literally saying Bitcoin L1 doesn't welcome innovations. Well, blockchain exist for this same reason - innovation. If you've been attentive enough, there's a major shift ongoing behind the scenes already on making Bitcoin L1 programmable with the likes of Arch network and OpnetBTC. Arch network uses a VM based on Solana's eBPF tech to execute defi on Bitcoin L1.
Also, ordinals were meant to be token standards on Bitcoin L1 using the BRC model but sadly, that has not gone as planned.

I know a lot of maxis might not wanna hear this but it's a possibility that might soon become our reality. I'm not certain about but when it does happen, there will be a major shift in the ecosytem.

[HawkTrader]

Bitcoin's L2 already exist for that, truth is if you migrate such thing to bitcoin blockchain, the blockchain will be spammed heavily like how ordinals played out.

On the other hand you got L2 that was created to handle such thing and help smart contract to integrate to bitcoin.
Bitcoin's blockchain is already perfect as it is. If you care to look around, you'd find there are actually tons and tons of L2 of bitcoin.

Unfortunately, Bitcoin L2 presents another essential problem - fragmented liquidity. I don't really know how ordinals was engineered (prbably an open-souce tech) but having a VM that audits transaction before being executed on L1 might be the solution here. I still believe Bitcoin L1 has a lot to offer in curating the present defi space if programmability is achieved.

Using BTC as fees, collaterals and getting yield from their defi stakes will be more reliable and universally appealing than ETH.

[Alpen]

With Bitcoin's immense dominance and unmatched market cap, imagine if DeFi was fully built on Bitcoin Layer 1, but with:

- Full composability (no bridges or wrappers needed)

- High scalability

- Full smart contract support

- Rollback options for critical events

If such a system became reality, would developers and builders flock back to Bitcoin, given its strong adoption and network effect?

And if that shift happens—what would become of Ethereum, Solana, and other DeFi-native chains that have long been the playground for innovation? Would they become obsolete, or would they evolve to remain relevant?

I’m not sure how you picture this technically. Even if developers figure out how to scale Bitcoin to handle all that, would miners actually support it? They’re the ones who control network hard forks, after all.

And let’s not forget — many people, myself included, like Bitcoin because of its PoW model and lack of smart contracts. Just remember the controversies that popped up when the Ordinals protocol appeared — not everyone wants Bitcoin to turn into a playground for every experiment.

[NotATether]

That's not happening. Best we can do is Ordinals on layer 1. And even that is hamstrung by lack of approval of certain opcodes.