Grayscale has launched the Bitcoin Adopters ETF, which tracks companies with a corporate Bitcoin treasury strategy. 

Daily top performer — Curve Finance (CRV)

The S&P 500 rose 0.15% as investors shrugged off recession fears and reacted positively to strong tech earnings, with focus now shifting to upcoming Apple and Amazon results. Gold dropped to $3,245 on US-China trade optimism and a stronger dollar, with Fed rate cut hopes cushioning losses. The Coindesk Indices, which tracks the broader crypto market, fell 0.51%, with Bitcoin and Ether down 1.24% and 0.86%, respectively in the past 24 hours. Trade these markets and more with up to 500x leverage on Bybit MT5 using this 

Today's top performer is CRV, which surged 11.4% after Spark's integration of new Curve pools, enhancing stablecoin liquidity and improving DeFi infrastructure.

Curve Finance (CRV), launched in 2020, is a DEX on Ethereum for low-fee swaps between stablecoins and similar assets, with yield-earning pools and DAO governance via the CRV token. Spark has 

 sUSDS/USDT and USDC/USDT Curve pools to its Spark Liquidity Layer (SLL), boosting stablecoin liquidity, enabling easier swaps, and supporting future direct USDT deposits and withdrawals via Spark Savings.

Check out the latest prices, charts, and data of 

 the Bitcoin Adopters ETF, which tracks companies with a corporate Bitcoin treasury strategy. The ETF includes firms like Tesla, Blockstream, and MARA. It reflects the growing trend of companies acquiring Bitcoin as a hedge against inflation. Grayscale's fund aims to provide exposure to companies in sectors like mining, automotive, and energy. Institutional BTC adoption, including Michael Saylor's Strategy, is driving Bitcoin's scarcity, which may lead to a supply crunch and rising Bitcoin prices in the future.

Yesterday, BTC spot ETFs saw $323.3M in outflows, with $32M from GBTC and $291.3M from other ETFs.

 its largest Galxe points event, running from May 4–8, 2025, where users can complete tasks to earn points. They also introduced the AlphaWave competition, a 7-day AI trading contest featuring 25 crypto agents. Users can vote for the agent they think will win to earn rewards and complete Galxe quests. New tasks will be added throughout the week.

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Grayscale launches Bitcoin Adopters ETF, tracking companies with BTC treasury strategies

Discover how USDY, a yield-bearing stablecoin from Ondo Finance, offers secure, regulated returns backed by US Treasuries across multiple blockchains.

, which are crypto assets pegged to a major fiat asset, have gained tremendous popularity and are helping investors deal with the typical volatility of the market. For many years, stablecoin cryptocurrencies have been used for payments, principal value storage, B2B transactions and more. However, traditional stablecoins have always lacked the ability to generate yield. These assets are fixed at a certain rate (e.g., $1) and, due to inflation, they don’t protect against your funds’ value erosion. 

 have started to gain traction over the past several years. These "new generation" stablecoins, unlike their traditional counterparts, not only provide rate stability but also generate yields, growing your investment over time. One of the leading assets among yield-bearing stablecoins is US Dollar Yield (USDY), issued by Ondo USDY LLC, part of 

Backed by low-risk traditional finance (TradFi) reserves, USDY generates yields and is a fully composable asset that can be used throughout the DeFi ecosystems of multiple blockchains. The reserves and issuance of the stablecoin are also subject to high regulatory controls. In the world of yield-bearing stablecoins, USDY is among the top choices in terms of popularity, regulation and security.

What is the Ondo US Dollar Yield (USDY) Token?

 (USDY) is a yield-bearing stablecoin offered by Ondo USDY LLC, part of the Ondo Finance DeFi solutions provider. 

USDY’s value tracks that of the US dollar, and it’s backed by Treasury bills and demand deposit reserves. The coin issuer’s parent company, Ondo Finance, specializes in institutional-grade crypto solutions. Ondo aims to make on-chain institutional-grade finance tools and infrastructure accessible to anyone.

USDY was launched in August 2023. As of April 2025, the stablecoin has become available on 

 — a level of multichain coverage that few other stablecoins can match.

While USDY’s price tracks the US dollar’s, its rate is typically somewhat higher than $1 because yields earned by each unit of the stablecoin are added to it, increasing its nominal value.

 (RWAs), primarily Treasury bills, although some portion of the reserves may also be represented by bank demand deposits. Both of these financial asset types are considered cash equivalents.

To ensure the Ondo ecosystem's security, Ondo backs each $100 equivalent of USDY with reserves worth $104, maintaining a 4% overcollateralization rate at all times.

Ondo Finance takes the transparency of USDY seriously. The company has established a bankruptcy-remote mechanism, with a separate corporate entity controlling the issuance and oversight of the stablecoin in various ways, including a board of directors with an independent director, and segregation of assets and reporting from Ondo.

USDY is a fully composable asset that can be used in the DeFi ecosystems of its host blockchains for various purposes, such as collateral, 

USDY provides several significant benefits for its holders. First, it allows eligible individual and institutional investors to earn dollar-denominated yield. This is in contrast to traditional stablecoins, which provide no yield opportunities at all. While other yield-bearing stablecoins also generate returns for holders, some of these pay the yields in volatile cryptocurrencies, rather than high-quality assets.

Thanks to its dollar peg, USDY offers both yield and relative stability. Additionally, it’s fully composable, creating opportunities for use across various DeFi protocols. USDY is available on seven blockchains, providing access to more DeFi opportunities than most yield-bearing stablecoins.

The coin may also be used for passive holding, growing in value over time as yields accrue. In this capacity, USDY represents a good low-risk, on-chain investment opportunity.

Finally, USDY’s overcollateralization and backing by high-quality TradFi assets, Treasury bills and demand deposits make it one of the most secure yield-bearing stablecoins on the market.

How does Ondo US Dollar Yield (USDY) work?

Individuals and institutional entities need to undergo an onboarding process to acquire USDY, during which they submit relevant identity, legal and tax documents. Ondo diligently applies 

 (AML) checks in order to adhere to US securities laws, the Investment Company Act of 1940 and other relevant regulations.

US and UK residents cannot apply to buy USDY, although you may be eligible if you’re a US or UK citizen and reside abroad.

If your application is approved, you can be issued USDY 40 to 50 days after your initial deposit date, although you’ll start earning yield from the first day of your investment. The minimum amount for investment or redemption is $500. You can buy USDY from Ondo using the 

 stablecoin. US dollar wire transfers are also supported for amounts over $100,000.

Redemptions are only transferred in US dollars to bank accounts outside the US. You can redeem your USDY investment at any time, and the typical timeline to receive your funds is about 2–3 business days from the date of your request.

USDY accrues yield daily. The stablecoin’s yields are structured not to incur any US federal tax obligations. Ondo doesn’t charge any performance or management fees for USDY yields. However, the company earns income from a portion of yields generated by the underlying assets backing USDY.

As noted earlier, USDY’s yields accrue to each unit of the token. Therefore, the value of one USDY is usually above $1. For instance, the average value of USDY as of the time of this writing (Apr 30, 2025) is $1.11.

For investors who prefer a fixed $1 rate for the stablecoin, Ondo offers the rebasing version, called rUSDY. Yields for rUSDY are paid to your wallet in the form of additional tokens by increasing the supply of the crypto, while the principal remains at (or very close to) $1. This is known as rebasing. USDY and rUSDY are freely convertible between each other.

The rebased version of the coin might be useful to those who need to ensure rate stability (for example, for B2B payments of agreed-upon contractual amounts) while also earning yields from their investments.

 as a swap pair with the USDT stablecoin.

USDY boasts numerous benefits for investors — low-risk yields from high-quality traditional assets, wide multichain coverage, regulatory compliance, transparency, composability and rate stability. The combination of all these benefits is quite rare in the crypto market, and the investor community is definitely taking note: USDY is already the third-highest-ranked yield-bearing stablecoin by market cap as of late April 2025. 

Since the yield-bearing stablecoin niche is expanding, the advantages of the USDY are likely to attract further interest, both among the institutional crowd and with individuals keen to access high-quality, institutional-grade crypto products.

Intermediate

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What is Ondo US Dollar Yield (USDY) and how does it work?

Discover the 7 top Sui meme coins in 2025, from MIU to HIPPO, as they gain traction with fast growth, strong communities, and unique use cases.

 blockchains, have continued to rally as investors make bold moves with renewed risk appetites. As a 

 blockchain, Sui has continued to attract crypto enthusiasts — especially meme coin lovers, who appreciate the platform's speed and affordability.

Recent surges in trading volumes and market caps of SUI meme coins — such as MIU, LOFI and BLUB — highlight growing investor interest. For instance, BLUB experienced an 88% increase in just 24 hours from Apr 22–23, 2025, contributing to the broader rally of SUI as its price surged over 63% in April 2025.

These coins often incorporate unique themes and philanthropic efforts, such as HIPPO's wildlife conservation donations, that foster strong community support.

Let's look at the top Sui meme coins making waves in the crypto market.

​Sui-based meme coins are rapidly gaining traction due to a combination of technological advantages and vibrant community engagement. The 

 parallel transaction execution and unique gas pricing mechanism enable ultrafast transaction speeds and minimal fees. This makes Sui an ideal platform for the high-volume, speculative trading that meme coins often entail. Sui’s scalability and secure Move programming language attract developers seeking efficient and safe environments for launching their new tokens.​

 (DeFi) further supports meme coin growth, providing avenues for increased utility beyond mere speculation. Following are the top ​Sui meme coins based on market cap, as of Apr 30, 2025.

 is currently the leading ​Sui-based “cat meme coin,” with a market cap of $70.6 million. It draws in investors with its fun, energetic branding and community-driven spirit. MIU also features expanded utility beyond its cute cat hype, allowing users to access DeFi and 

 (NFT) opportunities on its platform. It also promotes long-term commitment via its 

 process, as stakers can earn up to 15% APR with 12 months of staking.

The project frequently launches community events and contests, strengthening its dedicated holder base. MIU’s success highlights the growing appetite for meme tokens on scalable blockchains like Sui. Its playful appeal and strong tokenomics have positioned it at the top of the ​Sui meme sector. MIU is a 

 coin: its total supply is 9 trillion tokens, of which 55% are dedicated to a 

, 15% allocated to staking rewards, 15% to ecosystem development, 10% to community and 5% reserved for the team.

MIU continues to ride the wave of growing meme adoption, aiming to become a lasting force within the Sui ecosystem and beyond.

With a market cap of $35.86 million and over 50 million app users, 

 (MEMEFI) is an ambitious Telegram project that blends the world of memes with SocialFi utilities. Unlike typical meme coins that rely solely on hype, MemeFi aims to engage Telegram users with an interactive web3 meme-themed clicker game that offers daily giveaways and incentivizes ad creations for enterprises.

Its native token, MEMEFI, is more than just a mere meme coin, and has use cases for 

You can trade MEMEFI on Bybit’s Spot trading platform (

 is a rising ​Sui meme coin known for its chill "lofi vibes" branding that resonates with a younger, internet-native audience. Beyond its fun appearance, LOFI has demonstrated solid growth by tapping into communities through music, lifestyle and crypto.

The project also ties in eco-conscious initiatives, focusing on providing clean water sources for global communities and addressing the impact of ocean waste and plastic on marine health, giving it a mission-driven angle not typically seen in meme coins. Besides direct donating, minting LOFI Mystic Yetis NFTs also helps contribute to the cause, with 20% of the proceeds going to the LOFI Foundation.

Lofi’s accessible vibe and shrewd marketing strategy continue to attract new supporters, helping LOFI to stand out in the increasingly crowded ​Sui meme scene. 

 (commonly known as HIPPO) is a community favorite in the ​Sui meme world. The HIPPO token mixes humor with philanthropy, donating a portion of its revenues to wildlife conservation initiatives, starting with Thailand’s Khao Kheow Open Zoo that houses Moo Deng, the adorable pygmy hippopotamus that inspired this viral meme coin. This feel-good approach has helped build an extremely loyal community around the HIPPO token.

Sudeng’s dual focus on memes and real-world impact gives it staying power. The project’s growing community engagement ensures that HIPPO remains relevant in a fast-moving crypto space.

You can buy HIPPO as a USDT Perpetual contract on Bybit (

 is making waves in the ​Sui meme coin ecosystem with its aquatic-themed branding and integration of meme culture. Known for its friendly, community-first approach, BLUB frequently hosts giveaways, meme competitions and liquidity incentives to maximize engagement.

The coin’s fun branding and its steady increase in active users have helped BLUB climb the ranks quickly. Its strong online presence and viral meme campaigns have attracted crypto enthusiasts who are looking for the next breakout meme project. As it continues building partnerships and expanding its reach, BLUB demonstrates strong potential to become a staple in the Sui meme scene.

 (TOILET) is a rising meme coin on ​Sui that embraces humor and absurdity in a way that resonates with crypto culture. Its branding focuses on being intentionally ridiculous, tapping into the viral tone of meme coins that don't take themselves too seriously.

The project’s organic, community-driven growth has made it one of the most talked-about newer entrants in the ​Sui meme space. Frequent meme contests, community raids and spontaneous airdrops help fuel engagement. One of its biggest events is the distribution of Toilet Club Alpha Pass NFTs to the top 100 TOILET holders (as indicated by the Apr 21, 2025 screenshot), which gives holders access to all of Toilet Dust's projects and events and the right to vote on Toilet Dust's future development.

Despite its humorous façade, TOILET’s strong holder base and active marketing tactics suggest it may remain relevant as Sui’s meme coin ecosystem continues to expand.

 (FUD), another top project in the ​Sui meme coin category, is built around an adorable pug mascot battling FUD (fear, uncertainty and doubt) in the crypto world. With a humorous tone and clever marketing, FUD has built a vibrant community of holders who embrace both its memes and its mission.

FUD leverages trending memes, contests and airdrop rewards to keep its community marketing fresh and viral, helping it steadily grow in popularity. Its deep integration of ​Sui apps like 

 — as well as its deflationary tokenomics, whereby 20% is dedicated to token burning — makes FUD a strong contender for future growth in the meme space.

Buying ​Sui meme coins on Bybit can be exciting. Nevertheless, it's important to recognize the risks and rewards involved. 

, and their prices can swing wildly and quickly, offering chances for sizeable gains as well as sudden losses.

Always approach these investments with caution, never risking more than you can afford to lose. That said, the fast-growing ​Sui ecosystem and meme culture can create rewarding opportunities for traders who stay informed and manage their risk properly.

Currently, you can buy MEMEFI as a Spot pair and Perpetual contract on Bybit. HIPPO is also available as a Perpetual contract. This gives traders the flexibility to choose the type of exposure they want — simple buying and holding with Spot, or leveraged trading with Perpetual contracts.

Spot trading is the most straightforward way to buy ​Sui meme coins, as you directly purchase the coin and own it outright. On Bybit, the process is simple. After choosing the Spot pair, such as MEMEFI/USDT, select your preferred order type — e.g., 

(you set the price you're willing to pay) — and confirm the trade to make your purchase.

Spot trading is ideal for beginning traders, as well as anyone who prefers a more straightforward, lower-risk approach as compared to 

Buying Sui meme coins as Perpetual contracts

Bybit offers MEMEFI and HIPPO as USDT Perpetual contracts for those seeking more advanced trading options. With Perpetual trading, you don’t own the actual coins; instead, you speculate on their price movement. Key points to understand include the following:

Perpetual contracts can offer significant rewards, but require a strong understanding of 

. Always start with lower leverage and practice solid trading discipline.

Whether you prefer the simplicity of Spot or the strategy of Perps, Bybit provides flexible ways to explore the booming ​Sui meme coin market.

The rapid rise of meme coins on the Sui blockchain highlights the power of community-driven projects when they’re paired with innovative technology. Thanks to Sui’s high-speed transactions, low fees and developer-friendly environment, Sui meme coins like MIU, LOFI and HIPPO have found a perfect ecosystem in which to thrive. Each project brings something unique to the table — whether humor, philanthropy, DeFi innovation or pure meme culture — creating a vibrant and diverse ​Sui meme coin landscape.

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7 top Sui meme coins to pay attention to in 2025

Mastercard has partnered with Circle, Paxos, and Nuvei to allow 150 million merchants to accept stablecoin payments. 

Daily top performer — Drift Protocol (DRIFT)

The S&P 500 rose 0.58% for a sixth straight gain as markets await key inflation and GDP data, alongside earnings from Meta and Microsoft. Gold fell 0.60% to $3,323 as a stronger USD and improved risk appetite limited safe-haven demand. Prices remained range-bound, with key levels at $3,260 support and $3,400 resistance. The Coindesk Indices, which tracks the broader crypto market, rose 0.51%, with Bitcoin and Ether up 0.55% and 1.31%, respectively in the past 24 hours. Trade these markets and more with up to 500x leverage on Bybit MT5 using this 

Today's top performer is DRIFT, which surged 28.7% following the introduction of Amplify, Drift's tool for simplified leverage that boosts yields with increased risk.

Drift Protocol (DRIFT), founded in 2021, is a decentralized exchange (DEX) on Solana offering spot trading, perpetuals, and market-making tools. Drift v2 builds on this by improving trading efficiency, security, and user-centric features, incorporating community feedback to enhance the platform. 

 by Drift automates leveraging strategies for higher yields by recursively borrowing against yield-generating assets. It simplifies the process, making leverage accessible with one click. However, risks such as liquidation, changing interest rates, and oracle failures exist. Amplify is designed for users with JLP or SOL LSTs seeking to boost yields with minimal complexity but comes with increased risk.

 with Circle, Paxos, and Nuvei to allow 150 million merchants to accept stablecoin payments. The company aims to make it easier for both merchants and consumers to use stablecoins, promoting blockchain technology's mainstream adoption. Additionally, Mastercard has launched a crypto payments card with MetaMask, enabling self-custodied fund transactions with fast processing speeds. Stablecoin market growth is expected to reach $3.7 trillion by 2030.

Yesterday, Bitcoin spot ETFs saw $43.9 million in net outflows, all from non-GBTC funds, while GBTC recorded zero flows.

, a Layer-1 blockchain focused on AI agents and user-owned IP, is offering a limited-time free ticket to its Summit Series for the next 18 hours. Users can also join the Camp Points Program by completing simple tasks to earn points, which may qualify them for a future $CAMP token airdrop. A minimum of 30 points is required to be eligible. Daily check-ins earn bonus points. VPN use may be needed for access.

Mastercard partners with Circle, Paxos, and Nuvei to enable stablecoin payments for 150 million merchants

Bybit Learn

Bitcoin

Bitcoin's DeFi ecosystem, known as BTCFi, is made up of a variety of projects such as BitVM, Bitlayer, Bitcoin Ordinals and the Runes protocol.

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For years after its introduction in 2009, the 

 (BTC) blockchain remained an environment used exclusively for asset transfers and storage. The rise of 

 (ETH) as an alternative to traditional financial systems in 2017–2018 seemed to ignore Bitcoin, the world's oldest blockchain, and its vast potential. Many at that time assumed that Bitcoin's relevance in the industry would decline, as 

 (DApps) elevated the status of Ethereum. However, it didn't take long for the Bitcoin community to come back with answers, some utilizing sidechains and other 

 solutions, and others leveraging the chain's own native mechanisms.

In the past few years, the ecosystem of apps and decentralized platforms that enable Bitcoin-focused DeFi — or BTCFi, as it's come to be known — has flourished. BTCFi is now a growing world, featuring efficient payment solutions, smart contract sidechains, fungible token protocols and even a technology for issuing Bitcoin-based NFTs. 

The exciting world of BTCFi still lacks the sophistication and programmability muscle of Ethereum's DeFi sector, but it's catching up fast. In this review, we’ll take a closer look at some of the critical apps and platforms that power BTCFi, a sector that leverages the potential of the world's largest crypto asset, the BTC coin. We’ll also discuss the key differences between the emerging BTCFi ecosystem and the established Ethereum DeFi universe.

Understanding Decentralized Finance (DeFi)

The launch of Ethereum in 2015 is often considered the starting point for the DeFi industry. For the first time, a popular smart contract–capable blockchain arrived on the scene, opening up opportunities for DeFi solutions such as 

 (DEXs), lending and borrowing protocols, and other crypto-based finance operations. However, it wasn't until 2017–2018 that the DeFi field really took off, with the introduction of pioneering protocols like 

These DApps and their business models were made possible thanks to Ethereum's smart contract functionality, which enabled complex logic and transaction execution capabilities on the blockchain through the 

While early DeFi protocols represented a wide variety of niches, five areas quickly emerged as the most popular and dominant within the overall DeFi ecosystem:

A few years later, another major category — 

 solutions — also became a prominent niche within the DeFi industry.

Bitcoin missed the early DeFi revolution, largely due to its absence of native smart contract capabilities. However, as early as 2018 and 2019, the first solutions aimed at enabling Bitcoin-based DeFi, or BTCFi, began to emerge. Some of these projects revolved around smart contract–capable Layer 2 sidechains linked to the Bitcoin network. Others championed the idea of 

 (e.g., wrapped Bitcoin, or WBTC) that could be transferred to Ethereum and used within this chain's leading protocols, such as AAVE, Curve Finance and Compound for collateral provision, swaps and other popular DeFi transactions.

The BTCFi field received a major boost in November 2021 with the introduction of Bitcoin's 

 upgrade, which introduced the functionality of batching multiple digital signatures for processing. These signatures are used on Bitcoin to verify transactions. Taproot’s practical advantages include significantly improved transaction processing and less bloat on the network. As a result, more complex transactions could be processed in less time and with more modest block space requirements. In turn, the ability to process more transactions in a more complex way led to a flurry of BTCFi activity and the emergence of new projects on the network.

In the past couple of years, newer BTCFi projects — such as BitVM, Bitlayer, Bitcoin Ordinals and the Runes protocol — have further advanced the sector, bringing it much closer to Ethereum's still dominant DeFi capabilities.

Compared to Ethereum's giant DeFi ecosystem, BTCFi is still a small world. However, BTCFi is catching up quickly, despite its somewhat late start. Below are some of the key points that distinguish Bitcoin DeFi from Ethereum DeFi:

Launched in July 2024 by the Lighting Labs team, who also created Lightning Network (which we'll cover shortly), 

 is a protocol built on the Taproot upgrade that enables the issuance and transfer of a wide variety of crypto assets on the Bitcoin blockchain. These assets are stored within 

 (UTXO), and can easily be transferred as part of standard Bitcoin transactions. The protocol stores the metadata off-chain to reduce the load on the Bitcoin network.

While Taproot Assets was originally built to facilitate 

 settlement on Bitcoin, users can now use it to create all kinds of assets on Bitcoin, including both fungible tokens and 

 (NFTs). These assets can easily be transferred as part of regular Bitcoin transactions, and can also be issued and transferred within Lightning Network for low-cost, highly scalable transfers, thereby running little risk of congesting the Bitcoin network.

 is used not only for Taproot Assets transfers, but also for a wide variety of Bitcoin transactions. Launched in 2018 by Lightning Labs, this Layer 2 solution lets users transact much more efficiently and cost-effectively as compared to native Bitcoin transfers. When two transacting parties use Lightning Network, the platform establishes a dedicated one-to-one channel for them for efficient communication. The parties commit to the channel by first bonding an amount of BTC on the underlying Bitcoin blockchain to open the channel. Then, the channel is opened and can be used for transacting, with all of the transactions processed 

The off-chain transaction mode allows Lightning Network to swiftly process a large amount of transfers at low cost, thus avoiding delays and high fees typically associated with the Bitcoin network. In fact, some of the most popular use cases for this solution are for micropayments and high-volume transfers.

Ethereum's DApp functionality has been supported by the blockchain's processing engine — EVM. For years, Bitcoin lacked a processing engine that would support programming logic and smart contracts. This all changed with the introduction of 

BitVM is a computational engine that’s designed to enable Turing-complete programming logic on Bitcoin. This opens up the opportunity to directly create DApps with advanced functionality and logic on the blockchain. While BitVM supports somewhat sophisticated programming logic for Bitcoin, it has one key limitation — the engine natively supports only two-party interactivity.

This limits, to a certain degree, the kind of DApps that can be used with BitVM. Any solutions that require only two-way interactions (e.g., one-to-one payment systems), can work well with the engine. However, more complex DApps, which normally require multi-party transactional ability, can't natively be accommodated by BitVM. Despite this limitation, BitVM is one of the key innovations opening up ways to create functional DApps on Bitcoin.

 (STX) is a Layer 2 solution that’s capable of hosting fully-fledged smart contract functionality and DApps on Bitcoin, as well as leveraging Bitcoin for security and settlement. This allows DApps hosted on Stacks to utilize the network's smart functionality while benefiting from the security of Bitcoin’s PoW network.

Stacks has its own block validation model, called proof of transfer (PoX). Stacks' blocks are anchored to Bitcoin, with the latter ultimately used for transaction validation. Using its anchor to Bitcoin, Stacks settles all transactions on Bitcoin via periodically transferred batches.

One area in which smart contracts have been used extensively on Ethereum is for NFTs. Due to Bitcoin’s lack of native smart functionality, its environment had been deprived of NFTs up until early 2023. That’s when developer Casey Rodarmor introduced the 

 protocol, a unique way of creating NFT-like assets on Bitcoin without using smart contracts.

 — the smallest unit of a Bitcoin — on the network can be uniquely identified from its position within each mined block. The Ordinals protocol specifies a way to inscribe pieces of data (e.g., text or image) into a uniquely identifiable satoshi, essentially opening up a route to creating Bitcoin-based distinct digital artifacts, such as NFTs.

As of mid-September 2024, the Ordinals protocol remains the primary way to create Bitcoin NFTs. The 

 of these digital artifacts on Bitcoin’s network is approximately 75 million.

 is another innovative technology introduced by Casey Rodarmor for the Bitcoin ecosystem. In the section on Taproot Assets above, we noted how that protocol leverages Bitcoin UTXOs to create tokens. The Runes protocol works similarly at the basic level and is also compatible with Lightning Network. 

Runes establishes a way to create fungible crypto assets on Bitcoin by attaching key token properties to Bitcoin UTXOs. However, there are significant differences between Taproot Assets and Runes. Unlike Taproot Assets, which stores token metadata off-chain, Runes is a purely on-chain solution. It's been lauded as a highly secure and lightweight way to handle fungible crypto assets on the Bitcoin chain.

As of mid-September 2024, there are close to 100,000 Runes tokens in existence, with the leading token, 

 (DOG), having amassed a market cap of around $257 million. The majority of popular Runes tokens are classified as meme coins.

 is a Layer 2 blockchain platform that leverages the BitVM engine described above. It represents the first widely known implementation of BitVM technology. Bitlayer acts as a processing medium that handles transactions and then settles them on the underlying Bitcoin chain. The platform, however, isn't just about BitVM — it also features a high degree of compatibility with the Ethereum ecosystem. Using its Layered Virtual Machine (LVM) technology, Bitlayer makes it easy to port Ethereum-based solutions to the Bitcoin ecosystem.

Programming code written in an EVM-compatible language like Solidity or Vyper easily compiles into a Bitlayer-compliant format, which greatly simplifies DApp porting and communicating between the Ethereum and Bitlayer environments. As such, Bitlayer is among the few platforms that enjoy both 100% EVM compatibility and the much-heralded security of Bitcoin.

Rootstock (RSK) is a Layer 2 solution that combines EVM compatibility with Bitcoin's security protection. With its mainnet launch dating back to January 2018, Rootstock is the oldest Layer 2 sidechain servicing Bitcoin. It features smart contract functionality, and is one of the key ways for developers to launch and operate Bitcoin-linked DApps.

The Rootstock blockchain's primary crypto asset, RBTC, is pegged to BTC at a rate of 1:1. Users can transfer their BTC to Rootstock, which then converts it to RBTC for use within the platform's ecosystem. At any time, users can reclaim their BTC and transfer funds back to Bitcoin. Besides smart contract functionality, what sets Rootstock apart from the native Bitcoin chain is its superior scalability and lower transaction costs. For instance, while the standard block confirmation time on Bitcoin is about 10 minutes, it's just 30 seconds on Rootstock. 

Rootstock’s shorter transaction confirmation time and full EVM compatibility make it an excellent environment for DApps to tap into the potential of the BTC ecosystem. At the same time, the platform has specifically focused its efforts on enabling DeFi use cases and attracting partner projects in the niche of decentralized trading.

Like Rootstock, Liquid Network is another longtimer among Bitcoin Layer 2 platforms. It launched its mainnet in September 2018, and has proven to be among the leading solutions to address Bitcoin's high transaction costs and poor scalability. As with Rootstock, Liquid Network is a Bitcoin sidechain that maintains a BTC-pegged asset, Liquid Bitcoin (L-BTC). Users can swap their BTC for L-BTC and then use the funds within Liquid Network's ecosystem for faster and more reliable asset transfers.

However, similarities between the two sidechains end here. Unlike Rootstock, Liquid Network has no native smart contract functionality. Its platform is designed primarily to improve the scalability and costs of asset transfers and to issue stablecoin assets. Like Lightning Network, it focuses on payments and transfers. The difference, however, is that Lightning Network is optimized for small or micro transfers, while Liquid Network is more suitable for medium and large asset transfers.

 (BADGER) is a leading DeFi platform that has championed the concept of linking the Bitcoin and Ethereum worlds. Launched on Ethereum, Badger’s key platform leverages wrapped Bitcoin assets, such as 

, across Ethereum's rich ecosystem of DeFi apps. While not a native Bitcoin solution, Badger plays a vital role in expanding the utility of BTC to additional ecosystems beyond the Bitcoin network.

BTC (or rather its wrapped variations) is used on Badger as a form of collateral for DeFi operations. Badger offers a dedicated bridging solution, the Badger Bridge, to easily transfer BTC to the platform wrapped as one of the two popular wrapped tokens — RenBTC or WBTC. These tokens can then be used in various DeFi apps to earn yield or act as collateral. Both of the wrapped Bitcoin tokens supported by Badger are quite popular, although RenBTC is a less prominent player in the field than WBTC. Currently the second-highest-capped wrapped token in the industry, WBTC enjoys vast popularity with a market cap of $8.6 billion.

Bitcoin DeFi apps offer several distinct advantages to traders, developers and project operators. First, there's the security factor — Bitcoin is considered a highly secure environment even by the stringent standards of the blockchain industry. Arguably, Bitcoin has an advantage in this area, compared to Ethereum and most other smart contract chains. Secondly, since BTCFi is a less mature and overcrowded environment than Ethereum DeFi, there are unique opportunities for traders to benefit from its less efficient markets. 

The third advantage is relevant specifically for NFT enthusiasts. Unlike Ethereum NFTs, which store their artwork or other media off-chain while the tokens’ metadata is kept on Ethereum, Bitcoin NFTs — supported by the Ordinals protocol — are stored fully on-chain. All of the metadata and actual media files related to an NFT are kept on Bitcoin. This provides benefits both in terms of security and greater intellectual rights protection.

Finally, BTCFi offers developers and operators a unique benefit: Since BTCFi is an emerging area, there are opportunities to present first-of-its-kind solutions for the ecosystem — something that’s considerably harder to do in the cutthroat world of Ethereum DeFi.

Despite Bitcoin's well-regarded security, BTCFi does have its risks. Some BTCFi solutions rely heavily on off-chain processing, or on the use of sidechains. These environments may not have the same security profile as Bitcoin itself. Secondly, lower liquidity levels may increase losses, due to higher 

Thirdly, the smaller ecosystem of DApps may limit your choice of trading platforms. In addition, the use of wrapped tokens essentially moves your BTC assets to other blockchain ecosystems, which may not be as secure as the Bitcoin chain. There are, of course, also additional transaction costs due to the need to wrap and unwrap tokens.

BTCFi continues to develop and mature, with newer projects like Ordinals and Runes at the forefront of its development. As the BTCFi ecosystem of apps and solutions grows, there will likely be more opportunities in the future for cross-chain transactions and interoperability with other blockchain environments. 

While there are solutions bringing together the worlds of Ethereum and Bitcoin, the BTCFi field has yet to expand to other prominent ecosystems, such as the system of Polkadot (DOT) parachains and the network of Cosmos (ATOM) blockchains. Later in 2024 and in the following few years, we’re likely to see the emergence of such cross-ecosystem solutions as well.

BTCFi is a fast-developing sector, with solutions that leverage smart contract sidechains, wrapped tokens, Taproot upgrade–charged asset management solutions, native Bitcoin NFTs and add-on engines capable of EVM compatibility. The projects we've covered above are some of the most fundamental BTCFi players and true pioneers of this field. 

Naturally, there's still a need for BTCFi to grow larger and offer more diversity and sophistication to traders. This is all happening now, right in front of our eyes. While the current BTCFi ecosystem can’t yet rival that of Ethereum's DeFi, let's not forget one factor that points to its vast potential — the massive funds held in BTC, which still represent well over 50% of the entire crypto market capitalization.

What Is Bitcoin DeFi: The Rise of BTCFi

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