Charles Hoskinson Launches First Bitcoin DeFi Protocol on Cardano
Cardano founder Charles Hoskinson has introduced a groundbreaking Bitcoin DeFi solution called the Cardinal Protocol. This marks the first time Bitcoin can be used in decentralized finance on Cardano without relying on third-party custodians.
Created by InputOutput HK, Cardinal allows people to use any Bitcoin UTXO to get DeFi yield. Now, users can take part in lending, borrowing, staking, or farming Bitcoin on Cardano. Wrapped UTXO is the key part of this innovation and can be burned to get Bitcoin or Ordinals.
Rather than having to rely on custodians, Cardinal uses the MuSig2 multi-signature method. It makes peg-in and peg-out transactions possible, ensuring everything is clear and verifiable, and it is compatible with Ethereum, Solana, and Avalanche networks.
BitVMX is used by Cardinal for off-chain verification, and it works with Cardano’s smart contracts. People can use MinswapDEX, SundaeSwap, or Fluid Tokens to farm and trade Bitcoin-based assets, or to lend their funds. Now, Ordinals can be used as security for loans and exchanged or auctioned on other blockchains without losing their history.
According to CTO Romain Pellerin, this is a good step, but adding zero-knowledge proofs, wallet connections, and better liquidity would make it even better.
With this step, Bitcoin owners can now take advantage of DeFi and Robert Kiyosaki’s opinion that Bitcoin is “people’s money” is further supported. Cardinal gives Bitcoin a place in the expanding DeFi sector of Cardano.
Also Read: Cardano is at the Nexus of Bitcoin DeFi: Charles Hoskinson