We are likely to see Bitcoin evolve from "digital gold" into the most important foundational asset in a multi-chain DeFi ecosystem.

Written by: 0xResearcher

Imagine holding the world's most valuable digital asset—Bitcoin—but it feels like a gold bar locked in a safe, doing nothing but appreciating in value. It's like driving a Ferrari but only being able to spin in the parking lot, leaving one both excited and frustrated.

But this situation is changing dramatically. In the third quarter of 2025, when we see a community sale for a project oversubscribed by 1400%, attracting 21,340 participants from 132 countries, it’s not just a successful fundraising event—it's a microcosm of the entire Bitcoin DeFi ecosystem explosion. The data is even more striking: the BTCFi market experienced over 22 times growth in 2025, with total locked value surging over 2000%. Behind these numbers is the comprehensive awakening of a sleeping giant.

From the phenomenal performance of Pump Fun to the announcement of TGE plans by star projects like Linea, Monad, and Berachain, the entire crypto market is buzzing with activity. Among this wave, the most interesting story is that Bitcoin has finally "learned" to do DeFi.

For a long time, Bitcoin has been like the esteemed elder in the crypto world—everyone respects it, but it always sits in the corner, quietly observing, not participating much in the games of the youth. Ethereum has been playing DeFi vigorously, with various protocols emerging, while Bitcoin maintained its aloof stance of "I am digital gold, and I do nothing else." But now, the situation is completely different. Technological breakthroughs have finally allowed Bitcoin to "join the game" of DeFi, and it’s making a grand entrance.

Staking Track: A Glamorous Transformation from "Lying Flat" to "Lying Earn"

The success of the Babylon protocol is simply breathtaking. Who would have thought that during an open event in October 2024, 24,000 Bitcoins (approximately $1.5 billion) would flood into staking in just 1 hour and 40 minutes, with the first round of 1,000 Bitcoins being snapped up in just 74 minutes? This scene is reminiscent of concert ticket sales, except this time everyone is scrambling for the opportunity to invest in Bitcoin infrastructure.

The core innovation of Babylon lies in achieving native staking for Bitcoin, meaning Bitcoin holders can finally earn returns without losing control of their assets. In simple terms, it allows your Bitcoin to "work for you" while remaining secure. This technological breakthrough is akin to equipping a gold bar with a perpetual motion machine—both preserving and increasing its value.

Following closely, Core DAO also launched its Bitcoin staking program, introducing Bitcoin's security into its network through the Satoshi Plus consensus mechanism. Their strategy is more aggressive, directly airdropping CORE tokens to stakers, attracting a large number of Bitcoin miners. This "mining + staking" dual revenue model has provided miners, who previously could only earn through mining, with a new source of income.

Even more interesting is the flourishing of liquid staking tokens (LST). This field is like the "arsenal" of Bitcoin DeFi, with various tools available. Lombard's LBTC reached a locked value of $1 billion in just 92 days, becoming the first Bitcoin LST recognized by blue-chip protocols like Aave, Spark, and EigenLayer, equivalent to obtaining a "pass" in the DeFi world.

pumpBTC has taken a different approach, focusing on cross-chain liquidity solutions, allowing users to use staked Bitcoin across multiple chains. Lorenzo Protocol aims to create a unified liquidity layer for the Bitcoin ecosystem, attempting to become the central hub for all Bitcoin DeFi activities. Allo Protocol is even more ambitious, seeking to establish a decentralized Bitcoin asset management platform that allows professional investors to manage Bitcoin portfolios for retail investors.

All these protocols are trying to solve the same core problem: how to allow Bitcoin to "earn while lying down" while maintaining liquidity. It's like equipping a gold bar with wheels and an engine, enabling it to move and run on its own.

Infrastructure Battle: Equipping Bitcoin with an "Intelligent Brain"

If staking has taught Bitcoin how to "make money," then innovations at the infrastructure level are equipping Bitcoin with an "intelligent brain." The intensity of this technological race is comparable to the "browser wars" of the past.

BOB (Build on Bitcoin) may be one of the most ambitious projects in this field. They have achieved what seems impossible through BitVM technology: perfectly combining Bitcoin's security with Ethereum's DeFi capabilities. BOB's solution is like equipping Bitcoin with a "translator," allowing it to understand and execute complex smart contracts while maintaining its original security features. Currently, BOB has attracted over 30,000 Bitcoins in bridging funds, becoming an important entry point for Bitcoin DeFi.

Arch Labs has chosen a more direct route. They are developing ArchVM, attempting to implement Turing-complete smart contract capabilities directly on the Bitcoin base layer. This is akin to performing a "brain transplant" on Bitcoin, transforming it from a simple value storage tool into a smart platform capable of running complex applications. Although the technical difficulty is extremely high, if successful, it will completely change Bitcoin's positioning.

Hemi Network's solution is even more ingenious. They have directly embedded Bitcoin nodes into the Ethereum Virtual Machine, creating a hybrid architecture. This design allows developers to leverage both Bitcoin's security and Ethereum's programmability, like building a bridge connecting two worlds. Hemi claims to be "the largest programmable layer on Bitcoin," which may sound boastful, but they have indeed achieved significant breakthroughs technically.

In this infrastructure battle, Lombard has chosen a relatively pragmatic yet innovative route. As a protocol focused on releasing Bitcoin liquidity, Lombard provides Bitcoin holders with a "best balance point" through its LBTC token—allowing them to earn staking rewards while freely using it across major DeFi protocols. The success of this strategy is evident from its community sale data: originally planning to raise $6.75 million, it ultimately received subscription requests totaling $94.7 million, with an oversubscription rate of 1400%. Participants from 132 countries, totaling 21,340, flooded in, making it feel like a large gathering of the global Bitcoin community.

Interestingly, Lombard's success is reflected not only in fundraising data but also in the precision of its strategic positioning. They did not attempt to reinvent the wheel but focused on being a "connector"—enabling Bitcoin to seamlessly integrate into the existing DeFi ecosystem. LBTC has already been recognized by blue-chip protocols like Aave, Spark, and EigenLayer, equivalent to obtaining a "VIP pass" in the DeFi world.

Stacks has taken a different route, borrowing Bitcoin's security to its smart contract platform through its unique "Proof of Transfer" consensus mechanism. DeFi protocols on Stacks, such as ALEX and Arkadiko, have already accumulated a significant number of users, proving the feasibility of this technical path. Recently, Stacks also launched sBTC, attempting to provide a better cross-chain experience for Bitcoin while maintaining decentralization.

The most interesting project is Rootstock (RSK), which has been running for several years, providing smart contract functionality for Bitcoin through sidechain technology. Although not the newest project, RSK's position in the Bitcoin DeFi space is like that of an "elder," offering valuable experiences and lessons for newcomers. They recently launched a new scaling solution, aiming to improve transaction efficiency while maintaining compatibility with the Bitcoin mainnet.

These infrastructure projects are like equipping Bitcoin with various "add-ons" and "plugins," allowing this elder to finally showcase its capabilities in the DeFi arena. Each project has its own technical route and advantages, but the goal is the same: to unleash Bitcoin's immense potential in the DeFi space. And judging by the popularity of Lombard's community sale, the market is clearly full of expectations for this innovation.

When you see investors from 132 countries simultaneously saying "yes" to a BTCFi project, it’s no longer a regional small-scale event; it’s a global referendum on Bitcoin's future. From the auroras of the Nordic countries to the coconut groves of the equator, from coffee shops on Wall Street to late-night offices in Tokyo, investors around the world are focused on the same thing: this silent giant is finally about to speak.

The shift in Wall Street's attitude is particularly intriguing. When traditional financial giants begin to seriously consider Bitcoin allocation, they are not looking for simple buy-and-hold strategies but rather professional financial products that generate returns, possess liquidity, and meet compliance requirements. The interest of traditional financial giants like BlackRock and Fidelity in Bitcoin ETFs is just the first step; next, they are likely to seek more complex Bitcoin financial products. This is the value of BTCFi infrastructure—it upgrades "digital gold" to "yield-generating gold."

The behavioral changes of retail investors are also noteworthy. They have long grown tired of only being able to "pick up" in the secondary market and now want to stand on the same starting line as institutional investors. This demand has driven the need for fairer and more transparent token distribution mechanisms, explaining why community sales have been so popular. When ordinary investors discover they can also participate in the early stages of infrastructure development, their enthusiasm is ignited.

But what we see now may only be the tip of the iceberg. Compared to the maturity of the Ethereum DeFi ecosystem, Bitcoin DeFi still resembles a child just learning to walk. There is immense room for innovation in areas such as staking mechanisms, liquidity management, yield optimization, and risk management. Moreover, as the regulatory environment gradually clarifies, compliant BTCFi products will gain greater development space.

Most interestingly, the competitive landscape of this current track is far from being defined, much like the gold rush era in the American West—there are many opportunities, but the risks are also significant. The technical routes are still being explored, business models are still being validated, and user habits are still being cultivated. This uncertainty is both a challenge and an opportunity, providing new entrants with the possibility of overtaking on the curve.

Projects that can provide full-stack solutions, build strong community foundations, and gain recognition from mainstream protocols are likely to become the biggest winners in this "gold rush." The key lies in finding a balance between technological innovation, user experience, security, and compliance.

Conclusion

Looking ahead, we are likely to see Bitcoin evolve from "digital gold" into the most important foundational asset in a multi-chain DeFi ecosystem. Infrastructure will become increasingly sophisticated, and interoperability between different protocols will continue to enhance, ultimately forming a complete Bitcoin financial ecosystem. By then, BTCFi products may be accepted by the mainstream market just like today's traditional financial products.

When 21,340 individuals from 132 countries simultaneously cast their trust votes for a project, it is no longer just an investment action—it's a collective bet on the future of Bitcoin finance. And given the current momentum, this bet is likely to yield substantial returns. After all, when the world's most valuable digital asset finally learns to "work for a living" and is equipped with an "intelligent brain," who wouldn't want to be a part of this story?

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