Core

Evolution

Bitcoin

DeFi

April

<h2 id="key-points">Key Points</h2>
<ul>
 <li>Bitcoin-native decentralized finance (DeFi) is evolving with the introduction of Bitcoin Runes and BRC-20 tokens.</li>
 <li>Bitcoin is beginning to become a yield-generating asset for the first time with the launch of noncustodial Bitcoin staking.</li>
</ul>
<p>The development of Bitcoin Runes and BRC-20 tokens represents a significant step in the progression of <a href="https://crypto.ro/en/cryptocurrencies/bitcoin/" rel="noopener noreferrer nofollow">Bitcoin</a>-based decentralized finance (DeFi).</p>
<h2 id="bitcoin-defi-s-evolution">Bitcoin DeFi’s Evolution</h2>
<p>These innovations stem from an aspiration to enhance the utility of the world’s most secure blockchain network, says Rich Rines, a key contributor to Core DAO, a group focused on Bitcoin DeFi solutions. He explains that Bitcoin began as a peer-to-peer electronic cash system, then evolved into a store of value, and now safeguards $1.5 trillion in wealth. Over the past year and a half, there has been a growing interest in expanding Bitcoin’s utility through the development of Ordinals, token protocols like BRC-20s, and now Runes.</p>
<p>Runes, a new protocol for issuing fungible tokens on the Bitcoin network, was launched on April 20, coinciding with the Bitcoin halving. This protocol is part of a broader developer movement known as Bitcoin DeFi, or BTCFi, which aims to add more utility to the Bitcoin network.</p>
<h2 id="bitcoin-as-a-yield-generating-asset">Bitcoin as a Yield-Generating Asset</h2>
<p>Despite the enthusiasm Runes has generated among Bitcoin holders, it may just be a stepping stone in the evolution of BTCFi due to the decentralized nature of the network, Rines suggests. He believes the market demand and people’s preference will ultimately determine the standards that prevail.</p>
<p>On April 20, Runes-related transactions accounted for the majority of Bitcoin transactions, representing 81.3% of daily BTC transactions.</p>
<p>In an effort to further BTCFi innovation, Core Chain launched the first noncustodial <a href="https://crypto.ro/en/cryptocurrencies/bitcoin/" rel="noopener noreferrer nofollow">Bitcoin (BTC)</a> staking product on April 23. This allows for Bitcoin staking without compromising the security of the Bitcoin network. Rines believes this introduces a risk-free yield opportunity for Bitcoin holders, marking the first time Bitcoin has become a yield-generating asset.</p>
<p>Other protocols are also striving to create more utility for Bitcoin. On May 6, Hermetica announced the launch of the first-ever Bitcoin-backed synthetic United States dollar with yield-generating capabilities. The USDh, set to be released in June, will offer yields of up to 25%, aiming to bring more liquidity and use cases to BTCFi.</p>

Bitcoin DeFi Leverages Runes and BRC-20s as Pivotal Assets

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