Topic: Can bitcoin be brought into DeFi’s orbit (Read 311 times)

Bitcoin can be use as DeFi in Bitcoin Wrap? This is already possible.

Wrapping Bitcoin is a solution and bringing bitcoin into DEFI is what happened. The value of WBTC is equivalent to Bitcoin and can be easily converted to traditional Bitcoin. I find the inclusion of Bitcoin in DEFI based on Bitcoin encapsulation quite interesting. WBTC is still seen by everyone as an IOU asset, and it stores the value for Bitcoin very well.

The most popular currencies in the crypto market are Bitcoin and Ethereum Defi is usually the name of a project and these are based on tokens so Bitcoin cannot be brought into the orbit of defi. There is a difference between Bitcoin currency and Defi token. Currencies are more profitable and much more reliable than tokens Defi is easy to make a profit when investing. after Bitcoin, Ethereum is a much better currency these two currencies are more reliable for investing in the crypto market.

I know ethereum is quite interesting, utility installations but bringing in more scam projects luring people's investment and capital, because it gives them more opportunity to do whatever they want in the name of decentralisation, there are numerous uncountable number of scam DeFi projects listed on Uniswap everyday all operating on ethereum smart contract. So which one is more better, boring blockchain with less scam or high utility blockchain with more scam.

You certainly have a point here, Ethereum does bring utility into the cryptocurrency ecosystem. Being centralized (or at least, less decentralized than Bitcoin), innovations in Ethereum are happening more frequently, and different features are being embedded faster than it is in bitcoin. Ethereum platform allows developers to test their ideas and build apps and financial products. In a nutshell, due to Etereum's centralized nature, changes in the platform don't require overwhelming consensus to be added, and consequently, it became the perfect solution to the DeFi problem. However, there is a small issue, and that issue will likely prevent Ethereum from being the leading platform for DeFis.

DeFi products are meant to replace (or to become an alternative to) the current centralized banking products, traditional services that are based on fiat system with many drawbacks. To build truly decentralized financial products and get rid of the disadvantages of government-issued money, I believe that we must use time-honored decentralized blockchain and bitcoin, which has proved it has credible monetary properties.

Ethereum, on the other hand, has neither of these important properties. It is so centralized, it has so few full nodes, that governments can easily shut it down if they suddenly decide they don't like alternative financial products. Ethereum itself, as you said, is not a currency but a platform. Its monetary properties are not credible, the total supply is unknown and hardly verifiable. Neither can be credible the tokens built on this platform.

We can test features and try to innovate on centralized blockchains, but we can't rely on them when it comes to our money.

Bitcoin already is the best example of Decentralized Finance. Lending and borrowing bitcoin with better returns than banks is already possible, though not so widespread or automated. There have been attempts to make lending/ borrowing tools for bitcoin but I haven't checked how these work (custodial or non-custodial) so cannot comment.

The current wave of DeFi is mostly stablecoins and the ability to earn interest on it. A lot of centralized players have established themselves and they are almost like banks themselves. The "governance token" mechanism is little more than "vote by wallet". The hype about DeFi is due to the insane gains being made by anonymous twitter shillers and anonymous developers (with anonymous airdrops). Its the small retail buyers who FOMO into these and lose. There are some good attempts but decentralized, they are not.

You should join the discussion here and answer those questions. IMO, PoS will ultimately lead to centralization.

Umm. Whales make a living off of noobs everywhere. In traditional stocks, DeFi and of course, bitcoin. But then if you don't have a truly decentralized PoW ledger like bitcoin, this whole other "platform" shit will mean nothing. The future though is not perfectly secured like maximalists believe. Bitcoin needs to be more agile in terms of development as it cannot be denied that Ethereum has a lot of money backing it alongwith an army of developers. (including everyone's favorite scam devs which, like, 90% of those who know solidity are..LOL)

Obviously yes and Ethereum is a perfect example. The bitcoin maximalist don't give Ethereum enough credit for its contribution to the ecosystem. I strongly believe in bitcoin and believe it should be the first and go to coin when cryptocurrency or decentralized finance is concerned but that doesn't mean I should hates on other platform especially those bringing utility into the Industry.

If I may ask what does make Ethereum centralized, I know you'll immediately reference the influence the founder has on the blockchain and the number of nodes plus who controls it. I won't disagree with you that the nodes currently in existence aren't that ok for a decentralized project but still that doesn't mean you should discredit the effort Ethereum in putting into giving us rhe best decentralized experience so far in the industry.

All that happens on the bitcoin network is just making the blockchain boring and been overshadowed by whales making a living off noobs. For now bitcoin is a currency while ethereum is a platform. The sooner the platform developers starts working more on its platform features the best it'll be for the blockchain.

Be it coins or tokens, so far they are not bitcoin, they are regarded as alternative currencies, while alternative currencies are referred to as altcoins. Any cryptocurrency existing that is not bitcoin is simply an altcoin.

If you really want decentralized finance to flourish you should focus on the first part "decentralized" not on "finance" part.

How could a centralized blockchain such as Ethereum be used to build decentralized financial projects upon it? I don't understand. Could experts in DeFi explain to me such a contradiction?

In my opinion, a financial system can't function as intended if it is built on complex smart contracts, which neither are smart nor contracts.They are a complex piece of code, which nobody understands. Due to their complexity, they cannot be easily interpreted and verified by ordinary people, but there is always a high possibility of bugs, hacks, and abuses of such contracts. We can't sign contracts, conditions of which are hidden in obscurity and can be altered or abused. No system can be considered decentralized if built on a centralized base, uses centralized means, and has a small group of decision-makers and profit gainers behind it. Bitcoin is the only representative of DeFi (at least, for now) that has no aforementioned flaws. It is fully decentralized, its monetary base is understandable and verifiable, contracts used in Bitcoin are both easy to understand and impossible to hack.

Can bitcoin be brought into DeFi’s orbit?

Can anything besides Bitcoin be considered DeFi?

I'm sure DeFi is just an experiment.  This experiment is very important - new financial technologies are being tested.  

The modern financial system is in deep crisis.  For example, negative rates on bank deposits ... This is crazy!  

However, will a new financial system based on Ethereum be created?  Ethereum has an advanced smart contract system.  

However, Bitcoin also has smart contracts.  

https://www.coindesk.com/bitcoin-smart-contracts-minsc-easier-new-coding-language

Ethereum is still the leader in this technology.  However, the first cryptocurrency has a very important property - people trust it.  Everyone knows that Bitcoin is a valuable deflationary and decentralized asset.  Bitcoin is 21 million coins.  Bitcoin is the power of the algorithm, not the arbitrariness of individuals.  

Therefore, in the future, DeFi will be based on Bitcoin, not Ethereum.  This is a very likely scenario.

Even the bitcoin forks are called altcoins so if it's an ERCtoken like the WBTC, it's definitely an altcoin.  I just can't imagine BTC to have a smart contract on its chain, its going to weaken its security once it's going to have.  It's sure that Defi is going to be developed way better than what it is today and this would also means the platforms like ETH will also mature.

It is called a token, not an altcoin.
Altcoin is the name given to coins that run on their own platform.
token is a name for projects that run on the foundation of another project.
Therefore, all Defi projects running on Bitcoin's platform are considered tokens. in addition, the foundation of Bitcoin also can not meet the large transaction demand for traders. Bitcoin's foundation is SHA-256 and the speed of processing blocks is very slow, adding that the cost will also be very high. so I don't see this as a good option

Bitcoin is the game changer in the world with its decentralized network and its protocol. It is the most healthy network (from very huge hashrates and its decentralization).

Bitcoin is decentralized.
Altcoins are centralized
DeFi tokens are centralized.

I am not happy if bitcoin join the orbit of centralized DeFi party. Luckily as per bitcoin protocol, it won't happen.

There are already token on Bitcoin blockchain, isn't it? Counterparty and its tokens are on Bitcoin blockchain. They are already regarded as altcoins.
Do you honestly think that if DeFi pollution comes over those tokens will be seen as something ... better... just because they'd be on Bitcoin blockchain?!

Just leave all DeFi stuff in Ethereum, no need to bring it to bitcoin just for the sake of it.

Consider any hype you hear about DeFi coming to bitcoin’s core protocol as clickbait. Core developers are very reluctant to merge new features into bitcoin, so the only real possibility I can think of that lets people use at least a crude form of DeFi here is if it’s implemented on some company's sidechain such as Liquid.

Even that is a distant dream because big sidechain projects aren’t interested in adding DeFi to them.

Wbtc is clearly an altcoin. But what surprise me is the actual conversion of it into bitcoin. As you can see, they have different network and wbtc is an erc20 token whilw btc have his own. Curious to know what is the sole purpose of wbtc aside form tradinh it naturally on dex and easily unwrapping it as bitcoin or exchange like binance convert it 1:1 without much hassle.

Technically yes. Whatever they said its bitcoin still, the fact that they uses the token smart contract of ethereum to mint those then its an altcoin.

250 billion in Bitcoin capital?WTF?The Bitcoin marketcap is NOT Bitcoin "capital".There's a huge difference.
I can't imagine 250 billion dollars in Bitcoin capital.If the mainstream investors buy BTC worth 250 billion dollars,the price of Bitcoin would be above 1 million dollars for sure.
Anyway,I'm not a fan of DeFi projects,so let's see how the DeFi technology will develop and grow over the next few years.If DeFi projects turn out to be successful,then it's OK to combine the powers of DeFi and Bitcoin Core.

They surely be called altcoins. N.B any coin not regarded as Bitcoin itself directly is automatically an altcoin irrespective of the blockchain it is built upon. I don't think anyone would want to build Defi tokens on the Bitcoin blockchain, people are even getting tired of congested and slow rate the Ethereum network is.  Defi hypes are going down like the old IEO and ICO. So, it would be time wasting and energy wasting to consider building Defi tokens on Bitcoin blockchain what do the creators consider to aim at the long run? To alternative reposition Bitcoin?

I read a funny news today and I was surprised by the news, and I just think to bring it here for discussion. It is about Bitcoin DeFi projects, as we all know that bitcoin and ethereum community share different philosophies, although there are some DeFi projects that are ethereum tokens but are still reflecting their marketcap and prices in bitcoin but bitcoin community do not recognize them as bitcoin, example is Wrapped BTC. Although I saw it on the news like that but truly in our opinion and it is very clear that they are actually not bitcoin but altcoins.

Also I saw this and I quoted it below
Even if no DeFi token is built on bitcoin blockchain, it is obvious that bitcoin will still have the strongest blockchain, and it will be the strongest cryptocurrency. It is the coin that is becoming the currency of the world that will surely go mainstream.

https://cointelegraph.com/news/defi-won-t-last-long-without-unlocking-bitcoin-s-250b-treasure-chest

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If DeFi projects are basically built on bitcoin blockchian, will the bitcoin tokens still be regarded as altcoins? In my opinion, although they will be called bitcoin tokens and they will be bitcoin DeFI projects but such tokens will still be regarded as altcoins.