Bitcoin DeFi Predicted to Surpass Ethereum, Solana with 300 Million Users

Bitcoin's decentralized finance (DeFi) ecosystem is on the cusp of substantial growth, according to a recent statement by Alexei Zamyatin, co-founder of Build on Bitcoin. Zamyatin predicts that Bitcoin DeFi will surpass both Ethereum and Solana in terms of user adoption, with an estimated 300 million users. This projection suggests that defi services on the Bitcoin blockchain will outgrow the current offerings on Ethereum and Solana, which are currently leading platforms in the DeFi space.

The prediction highlights the potential for Bitcoin to expand beyond its traditional role as a store of value and a medium of exchange. DeFi services, which include lending, borrowing, and trading platforms, have been primarily associated with Ethereum and Solana. However, the growing interest in Bitcoin DeFi indicates a shift in the market dynamics, with users and developers increasingly exploring the possibilities offered by the Bitcoin network.

Ask Aime: Could Bitcoin DeFi eventually overtake Ethereum and Solana?

Zamyatin's statement underscores the competitive nature of the DeFi landscape, where platforms are constantly vying for user adoption and market share. The prediction of 300 million users for Bitcoin DeFi suggests a significant leap in user engagement, which could be driven by various factors such as improved scalability, enhanced security, and innovative financial products. The growth of Bitcoin DeFi could also be influenced by the increasing acceptance of cryptocurrencies in mainstream finance and the growing interest in decentralized financial services.

The potential for Bitcoin DeFi to outgrow Ethereum and Solana is a testament to the versatility and resilience of the Bitcoin network. Despite being the oldest and most well-known cryptocurrency, Bitcoin continues to evolve and adapt to the changing needs of the market. The prediction of 300 million users for Bitcoin DeFi reflects the growing confidence in the network's ability to support a wide range of financial services and applications.

Zamyatin emphasized that the advantage of Bitcoin DeFi lies in its larger market and retail user base. He noted that while it is challenging to convert these users, winning in Bitcoin DeFi would mean capturing the entire market. The demand for Bitcoin yield and stablecoin products is driving strong interest in Bitcoin-based DeFi, as institutions seek yield on their Bitcoin holdings and recognize Bitcoin as the best collateral for stablecoins.

Bitcoin staking has emerged as a main DeFi use case outside of payments, involving Bitcoin holders locking their coins in self-custodial vaults or extractable one-time signatures to earn staking rewards on proof-of-stake blockchains like Ethereum. The Babylon Protocol is currently leading this market with a significant portion of the value locked on Bitcoin. However, Bitcoin’s DeFi TVL is still a fraction of the value locked on Ethereum.

Zamyatin acknowledged the controversies surrounding bridging solutions, which allow users to move value between incompatible blockchains. He argued that most hacks on blockchain bridges result from teams failing to manage their private keys rather than from smart contract vulnerabilities. Despite efforts to increase the number of bridge signers, institutions remain hesitant to use these solutions due to the anonymity involved and prefer trusted custodians like BitGo and coinbase Custody.