As the landscape of decentralized finance (DeFi) continues to evolve, builders in the Bitcoin ecosystem are looking to roll out projects that let holders maximize the utility of their digital assets.
This cutting-edge approach is not just about holding assets like bitcoin; it’s about leveraging them in ways that generate additional yield, without relinquishing ownership.
David Mass, Co-founder of Hydrogen Labs, joined Roundtable anchor, Rob Nelson, to shed light on this burgeoning sector — and how projects like his are adding functionality that has helped Ethereum's ecosystem grow so quickly.
At the heart of their discussion was the Spiderchain, a new venture by Botanix Labs, to allow users to bridge their bitcoin into a sidechain to unlock yield. This process not only keeps the original bitcoin intact, but also allows for the creation of a derivative that can earn additional yield.
It's become one of the fastest-growing spaces in crypto as money continues to pour into Bitcoin ETFs. Projects like Mezo and Babylon and Stacks have also raised millions of dollars to build technology that seeks to emulate Ethereum's smart contract abilities to let users use their crypto in ways beyond just simply holding.
Nelson pressed for clarity, asking Mass to explain the practicality of this concept for everyday investors. Mass responded by highlighting how users can deposit their bitcoin into a smart contract on the Spiderchain, receive a derivative, and use that to earn yields. This opportunity, Mass noted, is a fresh approach in the bitcoin space, where DeFi has traditionally been limited or non-existent.
Nelson posed a unique question: Could this concept of liquid staking be applied to traditional assets like gold? While Mass acknowledged the theoretical possibility, he expressed skepticism about its practical application, pointing out that bitcoin, with its finite supply and growing adoption, might eventually supplant gold as a hedge.