As an experienced analyst with a background in cryptocurrencies and blockchain technology, I’ve been closely following the developments in the Bitcoin ecosystem over the past few years. The recent collaboration between Velar and Bitlayer represents an exciting milestone for Bitcoin DeFi and highlights the rapid expansion of its utility beyond being just a store of value or simple peer-to-peer transactions.
Over the past 18 months, Bitcoin, the leading cryptocurrency in terms of market capitalization, has experienced quite an adventure. Its value began the year 2023 at approximately $25,000. Since then, it has significantly increased by more than 165 percent, reaching a valuation of around $66,000 by mid-May 2024.
The price surge of this trailblazing digital currency has been accompanied by a swift increase in its practical applications. Initially known mainly for acting as a store of value and facilitating basic peer-to-peer transactions, it now boasts an increasingly prominent decentralized finance (DeFi) sector. A notable advancement in Bitcoin DeFi came recently when Velas, a leading Bitcoin liquidity protocol, announced a partnership with Bitlayer – a layer 2 network constructed on the BitVM infrastructure – which brings enhanced security for Bitcoin-equivalent transactions while maintaining Turing completeness.
A closer look at the collaboration
Through their partnership, Velar and Bitlayer have brought forth “Velar Artha,” marking the debut of the first perpetual decentralized exchange (PerpDex) on the Bitcoin network. Since its inception, Velar has been committed to unleashing Bitcoin’s full potential by creating an array of advanced tools.
Velar recognizes the complete worth of bitcoin assets in a system built on robust transaction settlement and unmatched security. The founding of Velar Artha on Bitlayer’s EVM-compatible Bitcoin Layer 2 represents Velar’s initial collaboration beyond Stacks and symbolizes a significant step forward as Velar broadens the deployment of its PerpDex to more strategic alliances.
Just like previously stated, Bitlayer marks the initial introduction of a Layer 2 Bitcoin security solution, engineered using BitVM. With its capability to accommodate multiple virtual machines (VMs), it establishes a completely Ethereum Virtual Machine (EVM)-compatible environment. This simplifies the development process for DeFi applications, enabling developers to effectively utilize the extensive tooling associated with Solidity – the native programming language for Ethereum smart contracts – while benefiting from Bitcoin’s unrivaled security.
Returning to the topic of Velar Artha, it’s important to note that perpetual contracts, which offer continuous exposure to trading various crypto assets without a specific expiration date, have gained significant popularity in the decentralized finance (DeFi) sector. However, until now, these instruments have primarily been accessible on non-Bitcoin blockchains. As a DeFi analyst, I’ve observed this trend closely and believe that Velar Artha’s introduction of perpetual contracts on the Bitcoin network is a significant development worth noting.
Through constructing PerpDex on Bitlayer’s foundation, Velar Artha aims to provide investors with access to a multitude of perpetual trading features, all while leveraging Bitcoin’s immense untapped potential in terms of capital value (estimated at billions of dollars), security, and decentralization. This arrangement enables Bitcoin owners to engage in various DeFi initiatives without assuming any custodial responsibilities as expressed by Velar CEO Mithil Thakore.
“Charlie Hu, Bitlayer’s co-founder, and I hold identical views regarding Bitcoin’s capability to serve as the base for a novel financial system. I’m thrilled to collaborate with someone who not only subscribes to this perspective but also amplifies it. Our efforts extend beyond creating products; we are collectively shaping the future of finance on Bitcoin.”
As an analyst, I would express it this way: I share Hu’s perspective that incorporating Velar onto Bitlayer holds immense potential for generating unique advantages within Bitcoin’s burgeoning Decentralized Finance (DeFi) scene. In my view, Bitlayer is eager to collaborate with Velar in delivering their perpetual decentralized exchange (DEX) product, catering to the growing appetite for on-chain perpetual trading among Bitcoin enthusiasts.
The rise of Bitcoin DeFi
As a researcher exploring the evolution of decentralized finance (DeFi), I’ve observed that Bitcoin took a backseat compared to Ethereum and other blockchain networks when it came to DeFi adoption starting around 2020. The primary reason for this was the absence of smart contract functionality on the Bitcoin network. However, recent technological advancements have started to bridge this gap.
As an analyst, I’ve identified another significant factor fueling Bitcoin’s recent expansion: Ordinals, which can be thought of as Bitcoin’s unique take on Non-Fungible Tokens (NFTs), are entirely stored on the blockchain. These Ordinals have opened up new possibilities, such as creating gaming environments and metaverse worlds directly on Bitcoin. Notably, prominent industry players like Animoca’s Darewise Entertainment subsidiary have begun developing various Bitcoin-centric metaverse experiences.
As Bitcoin turns fifteen, it’s becoming increasingly clear that the advancements in the crypto sector will reinforce its foundational role within the broader Bitcoin network. With maturity comes innovation, and these developments are poised to establish a robust ecosystem for Bitcoin.
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2024-05-17 16:06