Bitcoin -based financial decentralized (DEFI), often referred to as BTCFI, experiences significant growth but still faces challenges.
According to Defillma DataBased on Bitcoin (Btc) The total cost of the Defi Protocol locked (TVL) came from $ 304.66 million on January 1, 2024, up to $ 6.5 billion on December 31, 2024. As publication, Defillrama data shows that BTCFI has a TVL of $ 7.05 billion.
It translates to an increase of more than 22 times. A report shared by the Bitcoin Smart Contract Layer Arch Network suggests that “this progress is fueled by new protocol launch, emerging token standards, institutional flow, a major price rally that drives BTC to a high time, and the rise of liquid restoration.”
The results of the survey released in the report show that despite some of the solutions on the market, 36% of respondents did not interact with BTCFI due to a lack of confidence. One-quarter avoids interactions with BTCFI because of the risk and fear of losses. Most (60%) View the wise contract exploits as the leading security risk.
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The survey consists of relatively small sample sample of 125 respondents. It includes builders, investors and early users, with participation from Voltfi, DPI capital, Arkova, Ordbit and other Bitcoin -based teams.
The difficulties of BTCFI Development
Bitcoin formation is still seen as more difficult than developing altcoins such as Ethereum. According to survey results, 44% of users who choose BTCFI are encouraged by purported security and decentralization.
However, 43% argued that Bitcoin’s limited smart-contract support was the biggest challenge of developing the protocol. Approximately 45% of respondents said the better infrastructure was required to measure BTCFI, 43% directed at the broader adoption of Layer-2 for scalability and 34% aforementioned liquidity.
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How BTCFI Experts use Bitcoin
Among the respondents, 36% were holding their bitcoin in cold storage. Additionally, 33% of people trade in centralized exchanges and 31% use Bitcoin for payments.
About 29% of users use bitcoin as collateral in defi protocols, and their Bitcoin bridge to other blockchains as wrapped tokens. Bitcoin wrapped is a tokenized version of BTC that represents a native Bitcoin deposit in caution.
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