Experts say that the lack of base yield and fragmented liquidity have made Bitcoin DeFi a challenging environment to navigate.
In the past year, the namesake 16-year-old blockchain has seen the new arrivals of features such as Ordinals, Runes, and BRC-20 tokens. Even so, developers are undeterred at the sight of a market correction, speaking of a bourgeoning ecosystem ahead.
"There are currently two key factors constraining BTCFi's development, the lack of base yield and the fragmentation of liquidity," SolvBTC's co-founder Ryan Chow told Cointelegraph in an interview. "These factors have led to a significant amount of Bitcoin being left idle, unable to actively participate in the DeFi ecosystem."
As a Bitcoin yield protocol, SolvBTC is currently developing Liquid Yield Tokens that would allow Bitcoin holders to deposit their assets and earn income from DeFi, engaging analogous to liquid staking tokens on the Ethereum blockchain. Launched early this year, the project has since attracted a total value locked of $1.3 billion among 292,000 users.
