The decentralized finance (DEFI) landscape continues to evolve, and Bitcoin-centric solutions are developing momentum. BTCFI is an emerging field that changes Bitcoin (BTC) From the value store of passive storage to the active utilization in defi.
A new report Cointelegraph Research Elastos delves into how Bitcoin’s security can help create a trustless, scalable financial ecosystem.
Bitcoin’s Extended Role in Defi
Traditionally, Defi is dominated by Ethereum, which account The industry’s total value locks over 50% of the total value (TVL). However, Bitcoin’s strong security and liquidity make it an attractive foundation for Defi Innovation.
Despite its advantages, Bitcoin’s lack of local smart contract capabilities has historically limited its role in decentralized financing. Appear Bitcoin-centric DEFI solution Designed to bridge this gap and enable Bitcoin holders to participate in loans, stable issuance and cross-chain interoperability without underwriting risks.
Elastos: Leverage Bitcoin’s security to decentralize applications
Elastos has become one of the main players in this evolution by merging merged mining, an approach that allows secondary blockchains to inherit the security of Bitcoin.
Because Bitcoin totals about 50% of 800 EH/s Hash The platform fixes Elastos as one of the most robust Bitcoin-connected networks. This ensures that financial applications built on Elastos maintain a similar level of security as Bitcoin itself.
The core of Elastos’ infrastructure is Elastic consensus Model, a hybrid mechanism that integrates auxiliary proof, bond proof and fusion proof.
This multi-layer approach allows Elastos to provide secure, scalable financial services and enhance its appeal to DEFI applications. this Elastos Smart Chaina sidechain compatible with Ethereum virtual machine, facilitates the development of decentralized applications (DAPPs) to ensure seamless integration with the wider offset ecosystem.
BEL2: BTCFI’s breakthrough
The main highlight of the report is the BEL2 grocery network, which aims to bring trustless bitcoin transactions to DEFI. BEL2 uses Zero Knowledge Proof (ZKP) to verify Bitcoin transactions on Elastos and Ethereum networks without relying on centralized custodians.
This mechanism allows Bitcoin to be used without Synthetic assets or intermediary agencies, addressing the long-term challenges of BTCFI.
The model has attracted institutional interest. one initiative Led by Harvard students and alumni, BTC-backed Stablecoin was developed using BEL2. The platform also supports decentralized loans that allow Bitcoin holders to mortgage stable loans while retaining the appreciation of BTC’s price.
Elastos’ market position and future potential
Elastos’ BTCFI approach competes with established Bitcoin Defi solutions such as stacks and rootstocks. The stack mainly benefits from Bitcoin endurance, while Rootstock focuses on EVM compatibility, while Elastos distinguishes itself by combining high security (via merged mining) and cross-chain interoperability. This positioned Elastos as a powerful player in the BTCFI landscape.
However, the report also identified some challenges such as regulatory uncertainty, ecosystem awareness and some technical complexity. Despite these obstacles, Elastos’s Bitcoin security combination, trustless smart contract execution and Organizational support Position it as potential growth in the growing BTCFI sector.
Challenges and Opportunities for Bitcoin Defi Adoption
As the blockchain industry shifts to cross-chain interoperability and decentralized governance, it is expected that the assets deducted by Bitcoin will play an important role in reshaping traditions and decentralized finances.
Elastos’ innovations, especially through BEL2 and its decentralized identity (DID) framework, aim to enhance Bitcoin’s security, scalability, and institutional adoption in DEFI.
Have Bitcoin Secure Finance projection To significantly expand, Elastos’ infrastructure provides a strong foundation for the next wave of decentralized financial applications.
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