Key Points
- Bitcoin DeFi could surpass Ethereum’s DeFi total value locked (TVL) in two years, according to DAO contributor Branden Sedo.
- Sedo believes the trillion-dollar capital in the Bitcoin ecosystem will soon move on-chain, flipping Ethereum’s capital.
Branden Sedo, a Bitcoin DeFi developer and initial contributor to the Bitcoin sidechain Core DAO, recently predicted a significant shift in the decentralized finance (DeFi) landscape.
During Korea Blockchain Week, Sedo suggested that the total value locked (TVL) in Bitcoin-based DeFi protocols could surpass Ethereum’s DeFi TVL within two years.
Bitcoin’s Potential to Overtake Ethereum
Sedo believes that the trillion-dollar capital currently held in the Bitcoin ecosystem will soon move on-chain. This shift would eventually flip the capital on the Ethereum network.
As Bitcoin continues to grow in value, it’s expected to attract more institutional capital. This is particularly true through Bitcoin ETF products.
Sedo anticipates that much of this institutional capital would be invested in Bitcoin sidechains and other Bitcoin-based DeFi applications.
The approval of spot Bitcoin ETFs earlier this year highlighted Bitcoin’s scalability. This sparked a surge in development and market enthusiasm for Bitcoin sidechains including Bitlayer, Core, and Stacks.
Bitcoiners’ Role in the Flippening
For Bitcoin DeFi TVL to surpass Ethereum’s, a significant number of Bitcoiners need to be comfortable putting their Bitcoin to work on-chain.
However, the collapse of crypto lenders like BlockFi and Celsius during the 2022 crypto winter has made investors cautious. Many moved their BTC to cold storage, and some have become skeptical of yield-bearing opportunities for Bitcoin.
Despite this, Sedo noted a positive trend. Bitcoiners are gradually getting comfortable with using their BTC for non-custodial DeFi applications.
At the Bitcoin 2024 conference in Nashville, the prevailing sentiment was the “explosion of possibilities” on the Bitcoin network.
Sedo expressed confidence in Core’s staking approach, which is entirely non-custodial. Core’s bridge allows users to bridge stablecoins and native CORE tokens, powered by LayerZero.
This is the only bridging protocol in the crypto space that hasn’t fallen victim to DeFi bridge attacks.
With Core Chain, Bitcoin users can timelock their BTC without worrying about custody or handing over private keys. They also receive a 3% yield payout in CORE tokens, which can be used for gas and governance on the network.
