Bitcoin DeFi Could Surpass Ethereum Within Two Years

According to Cointelegraph, the total capital in Bitcoin-based decentralized finance (DeFi) protocols could surpass that of the Ethereum network within the next two years, as stated by Branden Sedo, an initial contributor at Bitcoin sidechain Core DAO. Speaking at Korea Blockchain Week, Sedo highlighted that the trillion dollars currently held in the Bitcoin ecosystem will gradually move on-chain, potentially overtaking Ethereum's network. He emphasized that Bitcoin's increasing value and the influx of institutional capital through exchange-traded products (ETPs) could drive this shift. Sedo noted that solutions like trustless bridges and roll-ups could facilitate the movement of capital on-chain, creating more opportunities for Bitcoin. The approval of spot Bitcoin ETFs earlier this year has spurred development activity and market enthusiasm for Bitcoin sidechains, including Core, Bitlayer, and Stacks. However, Sedo acknowledged that for Bitcoin’s DeFi total value locked (TVL) to surpass Ethereum’s, more Bitcoin holders need to become comfortable with using their Bitcoin in DeFi applications. The collapse of platforms like BlockFi and Celsius in 2022 has made many Bitcoiners wary of yield-bearing avenues, preferring to hold their Bitcoin in cold wallets. Despite this skepticism, Sedo has observed a shift in attitude among Bitcoiners, particularly towards non-custodial DeFi applications. After attending the Bitcoin 2024 conference in Nashville, Sedo noted a builder-centric vibe and excitement about the potential of the Bitcoin network. Sedo expressed confidence in Core’s non-custodial staking approach and its bridge powered by LayerZero, a major bridging protocol that has not experienced significant exploits. Core Chain allows users to time lock their Bitcoin, earning a 3% yield paid in CORE tokens, which are used for gas and governance on the network. Core recently surpassed Bitlayer to become the largest Bitcoin sidechain, with $314.4 million in TVL and 5,541 BTC staked on its network. At the time of publication, Core accounts for 26.4% of the total TVL across all Bitcoin sidechains, according to DeFiLlama data.