bitcoin (BTC) has grown from a small project to a leading candidate for a potential world currency thanks to its unmatched market capitalization, unmatched liquidity pool, and reliable infrastructure. Bitcoin's long-term benefits have secured its place on the balance sheets of industry giants like Tesla and MicroStrategy, as well as some small nation-states, regardless of market conditions.
It's no wonder that all the big players in the decentralized finance (DeFi) space are eager to plunge into Bitcoin's massive pool of liquidity. However, since DeFi protocols were built on Ethereum or other blockchains, they lack native compatibility with the Bitcoin network, making it difficult to access BTC liquidity.
Various projects have devised solutions to access Bitcoin liquidity over the years, the most prominent being wrapped versions of BTC and token bridges. Numerous reports highlighted that token bridges are too vulnerable to act as a DeFi gateway to Bitcoin liquidity, with cross-chain bridges. accounts for half of all DeFi exploits.
DeFi in Bitcoin: a complicated task
As DeFi struggles to find an ideal way to access Bitcoin liquidity, BTC holders also want their long-term investment to reach its full potential without introducing additional vulnerabilities or relying on a centralized third party. Even without the Herculean task involved on the technical front, the idea of โโusing the base layer of the Bitcoin blockchain for more than just peer-to-peer funds transfers drew mixed reactions in the Bitcoin community.
Despite the misconception that Bitcoin is limited to simple transactions, the contracts have been published using the Bitcoin script. Users have posted the first NFTs, and some even managed to play a retro computer game in the Bitcoin base layer through the Ordinals protocol. Casey Rodarmor, the creator of ordinals, described as a way to "make Bitcoin fun again."
However, not everyone prefers to use the original blockchain in that way. The Bitcoin OGs did not take the time to weigh in on the matter, pointing out that the base layer is not optimized for uses other than P2P funds transfers. Adam Back, CEO of Blockstream argument in a tweet that unless ordinals were used for something efficient, "it's another proof of block space consumption."
A potential fix should address Bitcoin community concerns about blockchain congestion without introducing new vulnerabilities or relying on third-party custody. mintlayera layer 2 solution rooted in the established network of the Bitcoin blockchain, it aims to provide an acceptable and credible response to all parties.
Reliable DeFi? Bitcoin fixes this
The founders of Mintlayer designed the protocol to be as interoperable as possible with the Bitcoin base layer. uses a unspent transaction output (UTXO), much like the Bitcoin blockchain, for superior security and robustness. As a Layer 2 solution built on the Bitcoin network, Mintlayer eliminates the need for wrapped tokens or token bridging (the main attack vectors for DeFi hacks) and instead uses atomic swaps for 1:1 transactions. from native BTC to tokens on the Mintlayer blockchain. .
Mintlayer allows Bitcoin holders to access all kinds of DeFi instruments, as well as a vast ecosystem of decentralized applications with their native BTC.
Rather than compete with Bitcoin, Mintlayer aims to empower the original cryptocurrency by providing a robust infrastructure that expands the use of BTC to new horizons. Speaking about building a decentralized protocol to give people new development opportunities, Mintlayer CEO Enrico Rubboli said: โBitcoin is digital gold, and Mintlayer is built to work with the digital gold standard. We believe that a truly decentralized protocol that is easy to use and highly interoperable with the largest digital liquidity pool is the future of decentralized finance.โ
Expanding the reach of Bitcoin
Going into the details of the project, the developers explain that users are not required to hold ML, Mintlayer's native token, to pay transaction fees. Users can pay for transactions with any token that a block signer accepts. To achieve autonomy, privacy and self-custody, the key pillars of the Bitcoin philosophy, the Mintlayer software is optimized to the point that users will be able to run a full node on an average desktop computer.
In addition to removing the friction around using Bitcoin to conduct a financial transaction, Mintlayer also seeks to make using BTC for non-financial projects within DeFi simple, secure, and seamless. By providing a unifying solution to the highly fragmented state of decentralized finance, Mintlayer encourages developers and users to focus on growing a truly inclusive, fair and transparent financial ecosystem for the benefit of all.
The Token Generation Event (TGE) for Mintlayer's native ML token is scheduled for March 21, 2023. The testnet launch is expected in Q2 shortly thereafter, followed by the mainnet launch in the third trimester. The newly released mobile wallet and the browser extension for Mintlayer are also available for download.
Learn more about Mintlayer
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