This project aims to revolutionize DeFi on Bitcoin
Bitcoin (BTC), the unique cryptocurrency with the most important market cap, continues to guide the crypto market — to each the inexperienced and crimson. Although the crypto area gave delivery to fairly just a few tasks, the remainder of the herd is not any match for the brainchild of Satoshi Nakamoto for monetary transactions.
The distinctive unspent transaction output (UTXO) mannequin used for the Bitcoin blockchain allows BTC to behave very like a paper forex, leading to superior safety and robustness as a peer-to-peer forex. Particularly in comparison with the bank-account-like mannequin that Ethereum-based DeFi options usually undertake. Because the pioneering cryptocurrency, Bitcoin presents huge liquidity, however Ethereum-based DeFi options have but to develop a safe and efficient technique to faucet into that.
DeFi already met Bitcoin, however there was a catch
With the introduction of the Taproot improve, which enabled the implementation of good contracts, DeFi discovered its path to the Bitcoin base layer for the primary time. Nevertheless, it began on the flawed foot: Because the Taproot improve allowed folks to bypass the preliminary 80-byte restrict on the Bitcoin blockchain, folks wasted no time in importing all kinds of digital properties, together with photographs, NFT-like inscribed belongings and extra, clogging up the bottom layer with pointless digital junk and presumably making Satoshi Nakamoto cringe.
Bitcoin wants its personal layer-2 DeFi ecosystem that expands the usage of BTC placing no extra stress on the bottom layer, and that’s the place Mintlayer is available in. Mintlayer is an L2 resolution rooted within the established community of the Bitcoin blockchain. Just like how the Lightning Community solved Bitcoin funds at scale, Mintlayer is poised to convey decentralized finance to Bitcoin’s toolkit, with out compromising the Bitcoin neighborhood’s rules.
Improved safety via atomic swaps
Because the massively damaging DeFi hacks and exploits from final yr proved, attempting to make use of Bitcoin in a non-native blockchain through wrapped tokens or cross-chain bridges was a foul thought. After years of assaults and greater than $2.5 billion in person funds misplaced, it’s clear that the danger of turning into an assault floor is simply too excessive for any token bridges to develop reliably.
Mintlayer, however, makes use of atomic swaps to permit a 1:1 transaction from native Bitcoin to tokens on the Mintlayer blockchain, successfully eradicating the necessity for any wrapped tokens or token bridges. This fashion, Bitcoin homeowners can use their BTC to offer totally different DeFi use circumstances a go.
Enrico Rubboli, co-creator of Mintlayer, defined why DeFi needs to be within the vizors of conventional monetary establishments:
“DeFi is a trust-minimizing know-how. When code replaces people, it’s incorruptible, taking human error out of the equation as a lot as attainable. We’re nonetheless early for that, each when it comes to regulation and know-how, however this is the reason Mintlayer exists.”
To facilitate fast adoption, Mintlayer spent 2022 creating a cellular pockets and an extension for web browsers in addition to integrating with Lightning Community. Following the launch of its native token MLT, Mintlayer goals to have its mainnet prepared by the third quarter of 2023. Mintlayer’s mission is to construct a protocol with the least quantity of friction for Bitcoin customers to create the purposes they want and use platforms constructed by others.
The crew additionally introduced the Mintlayer ecosystem fund to speed up the expansion of a DeFi ecosystem centered round Bitcoin. Tasks bringing worth to the Mintlayer ecosystem may profit from numerous grants the ecosystem fund offers. The fund helps tasks and startups in several phases of growth to seek out blockchain traders and like-minded stakeholders to push the area to new horizons.
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