Dfinity is behind the Internet Computer (ICP) smart contract platform. In a press release, the development team announced that they finally want to incorporate DeFi into bitcoin.
Integrating bitcoin’s core network into the Internet Computer ecosystem should allow smart contracts with BTC without tying the coin to another network on which it is synthetically mapped.
Internet Computer can now serve as a second layer for bitcoin
The oldest cryptocurrency (in the form of Wrapped Bitcoin) is already a popular element in the world of decentralized finance on the Ethereum blockchain.
Dfinity Chief Engineer Manu Dravers considers ICP integration to be much more secure than previous models based, for example, on blockchain bridges. They are often the target of attacks that often result in the loss of millions of dollars.
What does bitcoin bring to DeFi?
Bitcoin remains the largest cryptocurrency. With a market capitalization of about $320 billion, it is more than twice that of its chaser, Ethereum. Unlike ETH, BTC has not yet found widespread use in the DeFi sector.
This means: passive income from the largest cryptocurrency can only be achieved with a number of things in mind. Thanks to ICP, for example, secure bitcoin lending is now possible.
Bitcoin could also be exchanged decentrally for other cryptocurrencies. There might even be potential for decentralized cryptomixers, which until now have only worked centrally in the bitcoin network due to the lack of smart contracts.
The idea of introducing DeFi into bitcoin is nothing new. Lightning Labs, the developer studio of the Lightning Network, is already pursuing a similar goal with Taro. Thanks to Taro, Stablecoin can now be moved to Bitcoin Level 2.
A comprehensive DeFi integration is still a long way off. The protocol is a work in progress.