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Bitcoin DeFi Poised to Dominate with 300M Users—Leaving Ethereum and Solana in the Dust

Bitcoin DeFi Poised to Dominate with 300M Users—Leaving Ethereum and Solana in the Dust

Published:
2025-05-01 06:11:46
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Move over, Ethereum—Bitcoin’s DeFi ecosystem is gunning for the throne. A top exec predicts 300 million users will flood Bitcoin’s decentralized finance protocols, eclipsing rivals. Here’s why the OG crypto might just pull it off.

The Scaling Breakthrough: With layer-2 solutions like Stacks and RSK hitting escape velocity, Bitcoin finally has the throughput to compete. No more ’digital gold’ jokes—it’s now a full-stack financial rail.

The Institutional Edge: Wall Street’s comfort with Bitcoin (and lingering skepticism of ’altcoins’) gives it a gravitational pull. Expect capital to follow the path of least resistance—straight into BTC-based yield plays.

The Cynical Kick: Of course, this assumes TradFi actually understands DeFi. Most still think ’liquidity mining’ involves hard hats and pickaxes.

One thing’s clear: The battle for DeFi supremacy just got spicy. Ethereum and Solana better check their rearview mirrors.

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Alexei Zamyatin speaking with Cointelegraph’s Ezra Reguerra at Token2049. Source: Cointelegraph

Zamyatin said Bitcoin yield and stablecoin products are driving strong demand for Bitcoin-based DeFi.

“A lot of institutions that are buying Bitcoin now usually have to find yield on the assets they hold. So Bitcoin yield is becoming a very hot and highly sought-after thing.”

Demand for Bitcoin-backed stablecoins is also skyrocketing because Bitcoin is the “best collateral,” Zamyatin added.

Bitcoin staking has become the main DeFi use case outside of payments, which involves Bitcoin holders locking their coins in self-custodial vaults or extractable one-time signatures to earn staking rewards on proof-of-stake blockchains like Ethereum.

The Babylon Protocol is currently leading this market with $4.64 billion worth of value locked, representing nearly 80% of all value locked on Bitcoin, DefiLlama data shows.

Bitcoin’s DeFi TVL is still a fraction of the $54.6 billion worth of value locked on Ethereum.

Bridging solutions a controversial topic

Zamyatin acknowledged the numerous hacks on blockchain bridges, but argued most of those incidents resulted from teams failing to manage their private keys, rather than from smart contract vulnerabilities.

While competition in the retail market is wide open, Zamyatin noted that many institutions still hesitate to use bridges, that allow users to move value between incompatible blockchains.

Efforts have been made to increase the number of bridge signers from five to 50 in some cases, Zamyatin noted.

However, institutions have been reluctant to adopt these solutions because they often don’t know who’s signing the transactions.

For example, the Ren Protocol’s RenBTC operates via a decentralized network of nodes called Darknodes, which sign transactions to lock BTC and mint RenBTC to use on other chains. 

However, institutions continue to avoid these protocols due to the degree of anonymity involved and instead opt to use trusted custodians like BitGo and Coinbase Custody for such activities.

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