Crypto News – Cardano and Bitcoin to Integrate for Hybrid DeFi Apps – What It Means for Crypto
Crypto News – The upcoming Cardano-Bitcoin bridge, based on the Grail protocol, is set to integrate Bitcoin’s security with DeFi applications. Developed by Emurgo in partnership with BTCOS, this bridge will enable Bitcoin-secured decentralized finance (DeFi) apps on the Cardano network.
Cardano’s DeFi Vision Secured by Bitcoin
In an X post (formerly Twitter), Charles Hoskinson, the founder of Cardano, revealed that this bridge would eventually allow developers to build hybrid Bitcoin-Cardano applications with Bitcoin transactions and fees. Although some Bitcoin users are skeptical about DeFi apps being secured by Bitcoin, the Grail protocol’s documents suggest users will be able to withdraw their Bitcoin from Cardano without relying on validators.
Grail Protocol and Zero-Knowledge Proofs
The Grail protocol is designed using zero-knowledge (ZK) proofs to enhance security and scalability. This approach will allow users to deposit Bitcoin into a layer-2 network without compromising Bitcoin’s security, meaning they can safely withdraw Bitcoin from Cardano even if its nodes are compromised.
Challenges in Developing Hybrid Bitcoin-Cardano Apps
Creating Bitcoin-secured DeFi applications will take time. Hoskinson stated that developers will need to learn Cardano’s Aiken programming language to build these apps from scratch, which is more complex than adapting existing Ethereum apps. The process is expected to be challenging but worth the effort given the size of the Bitcoin market.
OP_CAT: An Alternative for Bitcoin-Secured DeFi
Another potential solution for securing DeFi on Bitcoin is OP_CAT, but it would require a soft fork of Bitcoin’s software. Edan Yago, co-founder of BTCOS, believes Grail offers better security than current Bitcoin pegging systems and doesn’t see OP_CAT as a necessary change.
The Future of Bitcoin-Secured DeFi
The Cardano-Bitcoin bridge and Grail protocol could revolutionize Bitcoin’s role in DeFi, offering enhanced security and new opportunities for decentralized applications. While it will take time to build fully-functional Bitcoin-secured DeFi apps, the project’s long-term potential could unlock significant value for both Cardano and Bitcoin users.
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