DeFi
Bitcoin’s OP_CAT Proposal Could Transform the Bitcoin Blockchain — TradingView News
History is littered with pivotal moments. Some pass unnoticed, only to be dusted off and illuminated by historians decades later, while others emerge with all the fanfare of a holiday parade. Judging by the clamor alone, the launch of the Rune Token Standard seems to fall into the latter category.
On April 19, the new protocol, designed to facilitate more efficient generation of native Bitcoin fungible tokens and coincided with that of Bitcoin. BTCUSD fourth planned halving – sparked a flurry of investment activity. Over 7,000 Runes tokens were created in the first two days after launch. At the time of writing, over 91,000 runes have been burned into Bitcoin, with $4.5 million in transaction fees paid to miners. At the height of the furor in mid-April, demand pushed transaction fees to an all-time high of $128.45.
At the time, many analysts wondered whether we were seeing a repeat of the “summer” of 2021 for decentralized finance (DeFi), when the launch of several decentralized applications and tokens led to frenzied activity and a sudden influx of liquidity into Ethereum. blockchain. But if so, autumn has arrived quite quickly; by mid-May, the number of Runes carvings had dropped by 99%.
Cointelegraph
So, was the launch of Runes really a historic moment for Bitcoin DeFi (BTCFi) or just an expression of momentary interest? Maybe it was a bit of both.
The Runes Protocol’s facilitation of efficient token generation could prove instrumental in enabling liquid staking and, by extension, investment activity, Layer 2 expansion, and DeFi innovation. But make no mistake: runes alone are just one advancement among many. For the past decade, a BTCFi revolution has been quietly in the works – and, pending the likely adoption of the Bitcoin Improvement Proposal (BIP) OP_CAT in 2025, it appears poised to unleash unprecedented growth for Bitcoin.
Related: Runes Protocol Will Spark a New Season for Bitcoin After Halving
But before we can speculate about what lies ahead, we need to think about our current situation. Mainstream adoption rests on three fundamental pillars: visibility, versatility and accessibility. As the first and leading cryptocurrency, Bitcoin commands attention and respect but (at least for now) falls short of the other two categories.
A Temporary Obstacle: Innovators Address BTCFi’s Capital Inefficiency and Limited Scalability
Bitcoin is capital efficient, but not capital efficient. Despite its high market capitalization, status as a leading store of value, and significant investor traction, BTC is severely underutilized as an investment asset. As of early April, around 65% of the BTC supply had not moved in over a year. That’s 10% less than in January, which coincided with the launch of several exchange-traded funds. While investors are starting to put their BTC to good use, more than half are still determined to pull back.
To be fair, BTC investors have had plenty of reasons to be cautious, given the lack of sustainable yield opportunities, the absence of institution-friendly yield products, and the unknown risks of moving or deploying ‘assets. Enter our slow undercurrent of revolution – a slow culmination spanning years of persistent determination to evolve Bitcoin from a store of value into a vibrant financial ecosystem in its own right.
Related: 3 Trends to Consider Before Bitcoin’s Bull Run Resumes
Efforts so far focus on two major priorities: making Bitcoin more programmable and improving capital efficiency. By design, the current Bitcoin network does not offer smart contract functionality. While this reduces complexity and the risk of security breaches, it also prevents the use of logical loops and conditions, thereby limiting dApp development and scaling. Blockchain’s high transaction fees and – until Runes – inefficient tokenization protocols have further hindered active, yield-generating investment activities.
Bitcoin’s DeFi ecosystem may be nascent, but it’s undeniably growing. In addition to core DeFi primitives such as DEXs, money markets, vaults, oracles, and stablecoins, BTCFi encompasses solutions intended to address the existing pitfalls of BTC, the asset, and Bitcoin, the network . General and purpose-built L2s such as Stacks, Merlin and B2 are developing their own BTCFi ecosystems. Projects like Babylon are propelling the development of DeFi by bridging the gap between proof-of-work and proof-of-stake models.
With all of this in context, the emergence of BTCFi and the subsequent “Bitcoin DeFi Summer” seems inevitable, albeit long overdue. But defenders will likely have to wait another year — or two, factoring in time for innovation — before the season kicks off.
OP_CAT could help usher in a new BTCFi renaissance – if it passes in 2025
If the Runes arrived in a cacophony, the OP_CAT Bitcoin proposal arrived with a whisper. Expected to be revised in 2025, this landmark document would restore smart contract functionality that has not been available on Bitcoin since Satoshi Nakamoto himself disabled it in 2010. OP_CAT would enable logic loops and conditions, thus enabling the creation of rules or conditions on how Bitcoin can be spent – and opens the door to many development possibilities, including layer 2, smart contracts, etc.
If OP_CAT is adopted, it will fundamentally change the way people mine Bitcoin and usher in a new renaissance for projects seeking to make BTC more programmable or more capital efficient. Innovators will finally have a secure way to adapt Bitcoin’s programmability to critical use cases such as DeFi, scaling, and chain interoperability, leading to more abundant investment opportunities , more varied and more lucrative.
At this point, we will officially have our second pillar for mass adoption. Bitcoin will continue to attract attention as an area of DeFi expansion. This, coupled with the development of secure and robust infrastructure, could lead to a massive influx of capital into BTC yield-generating protocols. Obstacles exist, of course; for example, as individual L2 and DeFi ecosystems emerge and grow, they will form their own communities and mine their own version of BTC – which will inevitably lead to fragmentation of liquidity and returns.
Accessibility is also a concern. For all its appeal and potential, cryptocurrency can seem intimidating and inaccessible to individual investors. Even if institutional actors are committed to this cause, much remains to be done to educate and involve the general public. Many Bitcoin holders and potential users may be familiar with the use of DeFi or the key concepts (i.e. bridging). Education and the abstraction of concepts will be important priorities for ecosystem defenders who intend to encourage their adoption by the general public.
The real BTCFi summer may be a few years away, but if history tells us anything, it would be that we need to start enabling our future users to do so now. While these quiet moments of advancement and preparation don’t all grab headlines like Runes’ debut, they all matter. Much like how blockchain works, writing history is a collective effort; individuals must mobilize and contribute to the cause. The coins are in play, change is happening, and our collective advocacy for the cause is strong – the only question remaining is how soon we will see our vision for BTCFi come to fruition.
Mikhil Pandey is a guest columnist for Cointelegraph and co-founder and chief strategy officer of Persistence One, a layer 1 blockchain. He holds a bachelor’s degree in electronic engineering from the University of Mumbai.
This article is intended for general information purposes and is not intended to be and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
The memecoin launchpad saw the largest daily revenue in all of DeFi over the past 24 hours.
Memecoin launchpad Pump.Fun has recorded the highest gross revenue in all of decentralized finance (DeFi) in the last 24 hours, surpassing even Ethereum.
The platform has raised $867,429 in the past 24 hours, compared to $844,276 for Ethereum, according to DeFiLlama. Solana-based Telegram trading bot Trojan was the third-highest revenue generator of the day, as memecoin infrastructure continues to dominate in DeFi.
Pump.Fun generates $315 million in annualized revenue according to DeFiLlama, and has averaged $906,160 per day over the past week.
Income Ranking – Source: DeFiLlama
The memecoin frenzy of the past few months is behind Pump.fun’s dominance. Solana-based memecoins have been the main drug of choice for on-chain degenerates.
The app allows non-technical users to launch their own tokens in minutes. Users can spend as little as $2 to launch their token and are not required to provide liquidity up front. Pump.Fun allows new tokens to trade along a bonding curve until they reach a set market cap of around $75,000, after which the bonding curve will then be burned on Raydium to create a safe liquidity pool.
Pump.Fun generates revenue through accrued fees. The platform charges a 1% fee on transactions that take place on the platform. Once a token is bonded and burned on Raydium, Pump.fun is no longer able to charge the 1% fee.
Ethereum is the blockchain of the second-largest cryptocurrency, Ether, with a market cap of $395 billion. It powers hundreds of applications and thousands of digital assets, and backs over $60 billion in value in smart contracts.
Ethereum generates revenue when users pay fees, called gas and denominated in ETH, to execute transactions and smart contracts.
DeFi Technologies, a Canadian company financial technology companyis set to enhance its trading infrastructure through a new partnership with Zero Computing, according to a July 30 statement shared with CryptoSlate.
The collaboration aims to integrate zero-knowledge proof tools to boost operations on the Solana And Ethereum blockchains by optimizing its ability to identify and execute arbitrage opportunities.
Additionally, it will improve the performance of its DeFi Alpha trading desk by enhancing its use of ZK-enabled maximum extractable value (MEV Strategies).
Zero knowledge Proof of concept (ZKP) technology provides an additional layer of encryption to ensure transaction confidentiality and has recently been widely adopted in cryptographic applications.
Optimization of trading strategies
DeFi Technologies plans to use these tools to refine DeFi Alpha’s ability to spot low-risk arbitrage opportunities. The trading desk has already generated nearly $100 million in revenue this year, and this new partnership is expected to further enhance its algorithmic strategies and market analysis capabilities.
Zero Computing technology will integrate ZKP’s advanced features into DeFi Alpha’s infrastructure. This upgrade will streamline trading processes, improve transaction privacy, and increase operational efficiency.
According to DeFi Technologies, these improvements will increase the security and sophistication of DeFi Alpha’s trading strategies.
The collaboration will also advance commercial approaches for ZK-enabled MEVs, a new concept in Motor vehicles which focuses on maximizing value through transaction fees and arbitrage opportunities within block production.
Additionally, DeFi Technologies plans to leverage Zero Computing technology to develop new financial products, such as zero-knowledge index exchange-traded products (ETPs).
Olivier Roussy Newton, CEO of DeFi Technologies, said:
“By integrating their cutting-edge zero-knowledge technology, we not only improve the efficiency and privacy of our transactions, but we also pave the way for innovative trading strategies.”
Extending Verifiable Computing to Solana
According to the release, Zero Computing has created a versatile, chain-agnostic platform for generating zero-knowledge proofs. The platform currently supports Ethereum and Solana, and the company plans to expand compatibility with other blockchains in the future.
The company added that it is at the forefront of introducing verifiable computation to the Solana blockchain, enabling complex computations to be executed off-chain with on-chain verification. This development represents a significant step in the expansion of ZKPs across various blockchain ecosystems.
Mentioned in this article
Latest Alpha Market Report
Singapore, Asia, July 29, 2024, Chainwire
- Elastos BeL2 to Partner with StarkWare to Integrate Starknet’s ZKPs and Cairo Programming Language with BeL2 for Native DeFi Applications
- Starknet integration allows BeL2 to provide smart contracts and dapps without moving Bitcoin assets off the mainnet
- Starknet Exchange Validates the Strength of BeL2’s Innovation and Leadership in the Native Bitcoin Ecosystem
Elastos BeL2 (Bitcoin Elastos Layer2) has secured a $25,000 grant from Starknet, a technology leader in the field of zero-knowledge proofs (ZKPs). This significant approval highlights the Elastos BeL2 infrastructure and its critical role in advancing Bitcoin-native DeFi, particularly Bitcoin-native lending. By integrating Starknet’s ZKPs and the Cairo programming language, Elastos’ BeL2 will enhance its ability to deliver smart contracts and decentralized applications (dapps) without moving Bitcoin (BTC) assets off the mainnet. This strategic partnership with Starknet demonstrates the growing acceptance and maturity of the BeL2 infrastructure, reinforcing Elastos’ commitment to market leadership in the evolving Bitcoin DeFi market.
Starknet, developed by StarkWare, is known for its advancements in ZKP technology, which improves the privacy and security of blockchain transactions. ZKPs allow one party to prove to another that a statement is true without revealing any information beyond the validity of the statement itself. This technology is fundamental to the evolution of blockchain networks, which will improve BeL2’s ability to integrate complex smart contracts while preserving the integrity and security of Bitcoin.
“We are thrilled to receive this grant from Starknet and announce our partnership to build tighter integrations with its ZKP technology and the Cairo programming language,” said Sasha Mitchell, Head of Bitcoin Layer 2 at Elastos. “This is a major milestone for BeL2 and a true recognition of the maturity and capabilities of our core technology. This support will allow us to further develop our innovation in native Bitcoin lending as we look to capitalize on the growing acceptance of Bitcoin as a viable alternative financial system.”
A closer integration with Cairo will allow BeL2 to leverage this powerful programming language to enhance Bitcoin’s capabilities and deliver secure, efficient, and scalable decentralized finance (DeFi) applications. Specifically, the relationship with Cairo reinforces BeL2’s core technical innovations, including:
- ZKPs ensure secure and private verification of transactions
- Decentralized Arbitrage Using Collateralized Nodes to Supervise and Enforce Fairness in Native Bitcoin DeFi
- BTC Oracle (NYSE:) facilitates cross-chain interactions where information, not assets, is exchanged while Bitcoin remains on the main infrastructure
BeL2’s vision goes beyond technical innovation and aims to innovate by creating a new financial system. The goal is to build a Bitcoin-backed Bretton Woods system, address global debt crises, and strengthen Bitcoin’s role as a global hard currency. This new system will be anchored in the integrity and security of Bitcoin, providing a stable foundation for decentralized financial applications.
As integration with Starknet and the Cairo programming language continues, BeL2 will deliver further advancements in smart contract capabilities, decentralized arbitration, and innovative financial products. At Token 2049, BeL2 will showcase further innovations in its core technologies, including arbitrators, that will underscore Elastos’ vision for a fairer decentralized financial system rooted in Bitcoin.
About Elastos
Elastos is a public blockchain project that integrates blockchain technology with a suite of redesigned platform components to produce a modern Internet infrastructure that provides intrinsic privacy and ownership protection for digital assets. The mission is to create open source services that are accessible to the world, so developers can create an Internet where individuals own and control their data.
The Elastos SmartWeb platform enables organizations to recalibrate how the Internet operates to better control their own data.
https://www.linkedin.com/company/elastosinfo/
ContactPublic Relations ManagerRoger DarashahElastosroger.darashah@elastoselavation.org
DeFi
Compound Agrees to Distribute 30% of Reserves to COMP Shareholders to End Alleged Attack on Its Governance
Compound will introduce the staking program in exchange for Humpy, a notorious whale accused of launching a governance attack on the protocol, negating a recently adopted governance proposal.
Compound is launching a new staking program for COMP holders as a compromise with Humpy, a notorious DeFi whale accused of launching a governance attack against the veteran DeFi protocol.
On July 29, Bryan Colligan, head of business development at Compound, published a governance proposal outlining plans for a new compound participation product that would pay 30% of the project’s current and future reserves to COMP participants.
Colligan noted that the program was requested by Humpy in exchange for his agreement Proposition 289 — which sought to invest 499,000 COMP worth approximately $24 million into a DeFi vault controlled by Humpy, and which appears to have been forced by Humpy and his associates over the weekend.
“We propose the following staking product that meets Humpy’s stated interests as a recent new delegate and holder of COMP in exchange for the repeal of Proposition 289 due to the governance risks it poses to the protocol,” Colligan said. “The Compound Growth Program…will execute the above commitments, given the immediate repeal of Proposition 289.”
Colligan added that the proposal would expire at 11:59 p.m. EST on July 29. Had Humpy not rescinded Proposition 289, Compound would move forward with it. Proposition 290 — block Humpy using the Compound team’s multi-sig to deploy a new governor contract removing the delegate’s governance power behind Proposition 289.
Hunchback tweeted that Proposition 289 had been repealed a few hours ago. “Glad to have brought Compound Finance back into the spotlight,” they said. added. “StakedComp… finally becomes a yield-generating asset!
Markets reacted favorably to the resolution, with the price of COMP increasing by 6.2% over the past 24 hours, according to CoinGecko.
Attack on governance
Proposition 289 proposed investing 499,000 COMP from the Compound treasury into goldCOMP, a yield-generating vault of the Humpy-linked Golden Boys team.
The proposal passed with nearly 52 percent of the vote on July 28, despite two previous iterations of the proposal being defeated by strong opposition. Can And JulyThe proposals notably asked for only 92,000 COMP, with security researchers warning that any deposit of tokens into the goldCOMP vault would cede their governance power.
In May, Michael Lewellen of Web3 security firm OpenZeppelin, note The first proposal was submitted by a new governance delegate who was suddenly awarded 228,000 COMP by five wallets that got their tokens from the Bybit exchange. Combined with his own tokens, the delegate got 325,333 COMP, which is over 81% of the 400,000 tokens required for a governance proposal to reach quorum.
“We have been alerting the community to the risk that these delegates could support a potential attack on governance,” Lewellen said. “The timing of the new proposal and these recent delegations are suspect.”
Read more: Compound community accuses famous whale of attacking engineering governance
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