Comprehensive Interpretation of BTCFi: From Lending to Staking, Creating a Mobile Bitcoin Bank

As Bitcoin solidifies its position in the financial market, the BTCFi( Bitcoin financial) sector is becoming the forefront of cryptocurrency innovation. This article delves into several key tracks of BTCFi, including stablecoins, lending, staking, re-staking, and the combination of centralized and decentralized finance(CeDeFi).

BTCFi Track Overview

BTCFi is a series of financial activities centered around Bitcoin, including Bitcoin lending, staking, trading, futures, and derivatives. By 2023, the BTCFi market size has reached approximately $10 billion. It is expected that by 2030, the BTCFi market will reach a scale of $1.2 trillion. Over the past decade, the BTCFi market has shown significant growth potential, attracting an increasing number of institutional participants.

BTCFi Track Segmentation

1. Stablecoin track

Stablecoins are a type of cryptocurrency designed to maintain a stable value, typically pegged to fiat currencies or other valuable assets. Mainstream stablecoins can be divided into centralized stablecoins like USDT, USDC( and decentralized stablecoins like DAI, FRAX). In the BTC ecosystem, the decentralized stablecoin projects are the ones worth paying attention to.

Main projects include:

• Bitsmiley Protocol: The first native stablecoin project in the BTC ecosystem
• Bamk.fi(NUSD): Synthetic US Dollar on Bitcoin L1
• Yala Labs: Over-collateralized stablecoin $YU
• Satoshi Protocol: The first CDP stablecoin protocol of the BTC ecosystem
• BTU: The first decentralized stablecoin project in the Bitcoin ecosystem.

( 2. Lending track

Bitcoin Lending)BTC Lending### is a financial service that allows individuals to obtain loans by using Bitcoin as collateral or to earn interest by lending Bitcoin.

Main projects include:

• Liquidium: A P2P lending protocol running on Bitcoin
• Shell Finance: Stablecoin protocol based on BTC L1

( 3. Staking track

Staking ) is commonly recognized for its characteristics of safety and stable returns. The Bitcoin staking protocol allows Bitcoin to leverage its unique security and decentralization features to provide economic security for other PoS chains.

Project Representation: Babylon

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) 4. Restaking track

ReStaking is the process of using liquid-staked token assets to stake on validators in other networks and blockchains to earn additional rewards.

Main projects include:

• Chakra: Innovative Modular Settlement Infrastructure
• Bedrock: Multi-Asset Liquidity Re-Staking Protocol
• Lorenzo protocol: BTC liquidity financial layer based on Babylon

5. Decentralized Custody

With BitGO, the entity behind wBTC, announcing the transfer of control over wBTC, discussions about the security of WBTC have heated up. New decentralized custody solutions include tBTC, FBTC, dlcBTC, and more.

6. CeDeFi

CeDeFi combines the characteristics of centralized finance ( CeFi ) and decentralized finance ### DeFi (. Major projects include Solv Protocol, Bouncebit, Lorenzo protocol, etc.

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) 7. DEX AMM Swap

The development of DEX in the Bitcoin ecosystem is relatively lagging, but AMM, PSBT, and atomic swap technologies provide the technical foundation for the realization of DEX on Bitcoin.

Main projects include:

• Bitflow: Focused on sustainable BTC yields
• Dotswap: Native AMM DEX on the BTC mainnet
• Unisat AMM Swap: Implementing inscription market trading based on the order book

Comparison of Different Asset Classes

Compared ETHfi, SOLfi, and BTCfi from the three dimensions of security, yield, and ecological richness:

• Security: BTCFi's focus on "security" is much higher than that of other ecosystems.
• Yield: BTCFi has greater potential and higher yield expectations.
• Ecological Diversity: The BTCFi ecosystem is currently in a period of explosion, with a large number of projects continuously emerging.

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Conclusion

BTCFi, as an innovative engine in the crypto finance sector, will continue to drive the Bitcoin network towards higher levels of financial applications and global participation. With technological advancements and market expansion, BTCFi is expected to become a bridge connecting traditional finance with the world of cryptocurrencies, providing global users with richer, safer, and more efficient financial services.

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