Bitcoin
Web3 teams compete to bring restoration to the $1.2 trillion Bitcoin ecosystem
Developers are rushing to leverage BTC to replicate Ethereum’s growing re-establishment ecosystem.
DeFi developers are competing to replicate the explosive growth generated by the Ethereum resettlement sector within the Bitcoin ecosystem.
On May 20, BounceBit, a “CeDeFi’ Layer 1 network backed by Binance, the popular centralized exchange, Published its roadmap to 2024. In the document, BounceBit said it plans to develop a “shared security client module” allowing third-party projects to utilize liquidity deposited on the “BounceBit BTC reset chain.”
BounceBit celebrated its mainnet launch on May 13, claiming to have accumulated a total value locked (TVL) of over US$ 1 billion after launching an incentivized early access Internship on January 30th.
The BounceBit chain is secured by users staking both its native BB token and Bitcoin (BTC). BounceBit’s new roadmap seeks to expand on this with the introduction of restake, allowing third-party protocols to leverage its staking mechanism for security.
BounceBit’s roadmap also includes improving the execution of BounceBit’s Ethereum Virtual Machine (EVM), bolstering transaction throughput, and upgrading communication between its EVM and the Cosmos software development kit.
Reestablishment boom
Restaking was pioneered on Ethereum by EigenLayer. EigenLayer allows Ethereum stakers to earn additional yield while simultaneously pledging their stake to secure actively validated third-party services (AVS) while protecting the Ethereum network. However, restokers incur additional downsizing risks, which means their participation will be diminished if the delegated AVS behave badly.
EigenLayer has grown to become the second largest DeFi protocol with a TVL of over $15.3. The protocol’s growth has recently been driven by explosive rise of liquid reset token (LRT) protocols, which reduce technical barriers to participating in reset and enable additional yield generation, allowing users to remain liquid.
Projects use Babylon as middleware for reestablishing Bitcoin
BounceBit is not the first project that aims to bring restaking to Bitcoin, with several projects leveraging Babylon, a Cosmos-based Bitcoin staking network, to develop BTC-based restaking products.
Babylon is a Cosmos-based network that allows Bitcoin holders to “stake” their BTC to secure Proof of Stake (PoS) networks in exchange for yield.
On May 16, Mind Network, a Tier 1 network focused on restaking, announced a strategic alliance with Babylon. Under the agreement, users will be able to secure Mind-based subnets by staking Babylon-based LRTs.
On May 2, Bedrock, an LRT protocol, released uniBTC, a Bitcoin liquid reset token based on Babylon. UniBTC allows BTC holders to participate in Babylon staking without locking their assets, meaning holders can remain liquid while securing PoS chains.
On April 1, Lorenzo similarly filed revealed stBTC, a Babylon-based Bitcoin LRT.