The landscape of decentralized finances (DEFI) continues to evolve and the solutions centered on Bitcoin are gaining momentum. BTCFI is an emerging sector that transforms Bitcoin (BTC) of a passive value reserve into an active asset used in DEFI.
A new Cointelegraph Research and Elastos report explores how Bitcoin safety helps create evolving and unconfroductive financial ecosystems.
The growing role of Bitcoin in Defi
DEFI is traditionally dominated by Ethereum, which represents more than 50% of the total of $ 175 billion of total locked value (TVL). However, the strong safety and liquidity of Bitcoin make it an attractive base for the DEFI innovation.
Despite its forces, the lack of feature of an intelligent Bitcoin contract has historically limited its role in decentralized finance. The emergence of Bitcoin Centric DEFI solutions aims to fill this gap and allow Bitcoin holders to participate in loans, the issue of Stablecoin and cross -risk interoperability.
Elastos: taking advantage of Bitcoin security for decentralized applications
Elastos stands out as one of the main players in this evolution by incorporating the merged mining, a method that allows secondary blockchains to inherit Bitcoin safety.
Since around 50% of the total Bitcoin 800 EH / S hashrate secures elastos, the platform is positioned as one of the most robust Bitcoin networks. This ensures that financial applications based on elastos maintain a level of security similar to that of Bitcoin itself.
At the heart of Elastos’ infrastructure is its elastic consensus model, a hybrid mechanism which incorporates proof of auxiliary work, proof of appearance and proof of integrity.
This multilayer approach allows Elastos to provide secure and scalable financial services and improves its call for DEFI applications. The Smart Elastos chain, a Sidechain chain compatible with the Ethereum virtual machine, facilitates the development of decentralized applications (DAPP) to ensure transparent integration with the wider challenge ecosystem.
Bel2: a breakthrough for btcfi
A major highlight of the report is the network of referee Bel2, designed to trust Bitcoin transactions without confidence. Bel2 uses zero knowledge evidence (ZKPS) to check Bitcoin transactions on Elastos and Ethereum networks without counting on centralized goalkeepers.
This mechanism allows Bitcoin to be used in DEFI protocols without synthetic or intermediate active ingredients and takes up a long -standing challenge in BTCFI.
This model has already aroused institutional interest. An initiative led by students and former students of Harvard University is developing a stablecoin to support BTC using Bel2. The platform also supports decentralized loans which allows Bitcoin holders to collateralize loans in the stablescoins while retaining an exhibition in the appreciation of the BTC prices.
Elastos market position and future potential
Elastos’ BTCFI approach is competing with established bitcoin solutions such as batteries and rootstock. The batteries benefit mainly from the finality of Bitcoin, and Rootstock focuses on EVM compatibility, while elastos are distinguished by combining high security (via merged mining) and cross interoperability. This positions Elastos as a great player in the BTCFI landscape.
However, the report also identifies certain challenges, such as regulatory uncertainties, awareness of ecosystems and certain technical complexities. Despite these obstacles, the combination of Bitcoin safety elastos, execution of intelligent contracts without confidence and institutional support positions it for potential growth in the evolutionary sector of the BTCFI.
Challenges and opportunities in the adoption of Bitcoin Defi
While the blockchain industry moves to cross interoperability and decentralized governance, the assets guaranteed by Bitcoin should play an important role in the reshaping of traditional and decentralized finances.
The innovations of Elastos, in particular through Bel2 and its decentralized identity framework (DID), aim to improve the security, scalability and institutional adoption of Bitcoin in Defi.
With the secure finance by Bitcoin which should develop considerably, the infrastructure of Elastos provides a robust base for the next wave of decentralized financial applications.
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