Bitcoin Defi to Reach 300M Users, Surpass Ethereum and Solana
Bitcoin DeFi Set to Overtake Ethereum, Solana, Founder Claims
DUBAI, United Arab Emirates (AP) — Teh first decentralized finance (DeFi) company to launch user-amiable products on the Bitcoin blockchain stands to “win the entire market” of its 300 million users, according to a crypto founder.
Bitcoin’s DeFi Advantage: A Larger User Base
Alexei Zamyatin, co-founder of Build on Bitcoin, said at Token2049 in Dubai that Bitcoin’s DeFi sector possesses a important advantage: a substantially larger retail user base compared to other blockchains.
“It is not easy to convert it, but if you manage to win in Bitcoin, you want the whole market.”
Zamyatin believes that tapping into Bitcoin’s extensive user base would allow DeFi services on the blockchain to surpass the growth seen on Ethereum and Solana.
Build On Bitcoin’s Hybrid Approach
Build On Bitcoin aims to capture market share by offering a hybrid layer 2 solution. This approach combines Bitcoin’s security with Ethereum’s DeFi capabilities through Bitvm, a platform designed to process Bitcoin Turing-complete contracts.
Zamyatin emphasized the necessity of native Bitcoin bridges for DeFi,citing Bitcoin’s robust security. However, he noted the blockchain currently lacks the developer talent, tools, and network effects present within the Ethereum ecosystem.
Institutional Demand and Bitcoin-Backed Stablecoins
According to Zamyatin, the performance of bitcoin (BTC) and the emergence of Bitcoin-backed stablecoins are driving strong demand for Bitcoin-based DeFi products.
“Many institutions that are buying Bitcoin now have to find performance in the assets of those who do holding. So Bitcoin’s performance is becoming something very sought after.”
He added that the demand for stablecoins backed by Bitcoin is increasing because Bitcoin is considered the “best guarantee.”
What if we tokenized the Bitcoin ETF so institutions could get access to DeFi yields? pic.twitter.com/2HCpwbCZDS
— Alexei (@alexeizamyatin) April 10, 2025
Bitcoin Staking and DeFi Use Cases
Bitcoin staking, where holders lock their coins in vaults to earn rewards, has emerged as a primary DeFi use case beyond simple payments. This involves holders securing their coins in self-custody vaults or entrusting them to firms to gain staking rewards in Proof-of-Stake blockchains like Ethereum.
Data from Defillama indicates the Babylon protocol is currently tracking this activity.
Despite this growth, the total value locked (TVL) in Bitcoin DeFi remains a fraction of the $54.6 billion locked in Ethereum, according to Defillama.
Bridge Solutions: A Point of Contention
Zamyatin addressed the security concerns surrounding blockchain bridges, acknowledging the numerous past hacks. However, he argued that these incidents primarily stemmed from mismanagement of private keys rather than inherent vulnerabilities in smart contracts.
While the retail market presents open competition, Zamyatin noted that many institutions remain hesitant to utilize bridges that facilitate value transfer between incompatible blockchains.
He stated that while efforts have increased the number of available bridges, institutions are frequently enough wary due to a lack of transparency regarding transaction signers.
As an example, Renbtc, operating through the REN protocol, utilizes a decentralized network of nodes called Darknodes to sign transactions, locking BTC and minting RENBTC for use on other chains.
Though, institutions frequently enough avoid these protocols due to the anonymity they offer, preferring trusted custodians like Bitgo and Coinbase Custody for such activities.
Additional reporting by Ezra Reguerra.
Bitcoin DeFi: Your Top Questions Answered
Q: What’s the buzz about Bitcoin DeFi, and why is everyone talking about it now?
A: The buzz centers around the potential for Bitcoin to become a major player in decentralized finance (DeFi). This is as of the first defi company to launch user-pleasant products on bitcoin’s blockchain claims it could “win the entire market” of its 300 million users, as reported by the Associated Press.This is according to Alexei Zamyatin, co-founder of Build on Bitcoin, who spoke at the Token2049 conference in Dubai. The excitement stems from Bitcoin’s huge user base, which could fuel defi’s growth.
Q: What gives Bitcoin DeFi an edge over Ethereum and Solana, the current DeFi leaders?
A: Bitcoin’s main advantage is its extensive retail user base. As Alexei Zamyatin pointed out,this provides a massive market to tap into. While converting this user base won’t be easy, success could lead to substantial growth, perhaps surpassing Ethereum and Solana.
Q: How does Build on Bitcoin (BOB) plan to bring DeFi to the Bitcoin blockchain?
A: Build on bitcoin (BOB) is using a hybrid layer 2 solution. It aims to marry Bitcoin’s rock-solid security with Ethereum’s DeFi capabilities through BitVM. BitVM is designed to run Bitcoin turing-complete contracts allowing for the functionality needed to build DeFi applications. Build on Bitcoin (BOB) plans to launch user-friendly products on Bitcoin that help Bitcoin become a major player in decentralized finance (DeFi).
Q: Why are native Bitcoin bridges so important for DeFi?
A: Native Bitcoin bridges are vital because they streamline the process of moving assets and data between the Bitcoin network and other blockchains,thus facilitating DeFi functionality.Security is paramount. Zamyatin emphasizes Bitcoin’s robust security as crucial but notes that Bitcoin currently lacks the extensive developer talent, tools, and established network effects of Ethereum.
Q: What role do Bitcoin-backed stablecoins play in this shift?
A: The emergence of Bitcoin-backed stablecoins is a major driver of demand for Bitcoin-based DeFi products. Bitcoin’s strong performance and its reputation as a reliable asset make it a great base for stablecoins. Institutions buying Bitcoin are looking for ways to generate returns, and stablecoins backed by Bitcoin offer a solution. Bitcoin is considered the “best guarantee,” increasing demand for these stablecoins.
Q: Tell me about the practical use cases for Bitcoin staking?
A: Bitcoin staking is becoming a prominent DeFi use case, going beyond just simple payments.It involves holders locking their Bitcoin in vaults to earn rewards. Holders can secure their coins in self-custody vaults or entrust them to firms, earning staking rewards in Proof-of-Stake blockchains.
Q: What’s the current state of Total Value Locked (TVL) in Bitcoin DeFi compared to Ethereum?
A: Despite growth, the total value locked (TVL) in Bitcoin DeFi is currently substantially less than Ethereum. data from defillama indicates that Ethereum holds approximately $54.6 billion in TVL, whereas Bitcoin DeFi is a fraction of that number. There is much prospect for Bitcoin DeFi to grow its TVL.
Q: What are the risks of using bridges moving value between blockchains, and what is being done to mitigate these risks?
A: Blockchain bridges have a history of security issues. Zamyatin acknowledges past hacks but clarifies that many problems stemmed from private key mismanagement rather than basic smart contract vulnerabilities, this is true. Zamyatin also notes hesitancy from many institutions when it comes to utilizing bridges for moving value. Efforts are increasing the number of bridges available.Transparency in transaction signers is a key issue, with institutions looking for more trust and reliability as a starting point.
Q: What are the current security concerns around blockchain bridges, and what has been done to address them?
A: Security concerns frequently enough center on the potential for hacks, which have occurred in the past. Zamyatin explained that issues often stem from mismanagement of private keys. Security is being addressed by increasing transparency in transaction signers.
Q: realistically, what are the main challenges ahead for bitcoin DeFi?
A: Building trust: Institutions are cautious about bridges. the lack of transparency around transaction signers, and anonymity are critical challenges to address.
developer Talent & Tooling: Bitcoin needs to catch up in developer talent, tools, and network effects compared to Ethereum.
Bridge Security: While improvements are being made, the history of bridge hacks remains a concern.
Q: Where can I find additional details on Bitcoin DeFi?
A: explore these resources:
DefiLlama: For up-to-date TVL data and tracking of protocols.
Token2049: For insights from industry events and founder interviews.
Twitter: Look for updates from Alexei Zamyatin (@alexeizamyatin).