Top Interop Protocol Wormhole Adds Stacks to Bridge Bitcoin to Multi-Chain DeFi – Crypto News – Crypto News
Connect with us
Top Interop Protocol Wormhole Adds Stacks to Bridge Bitcoin to Multi-Chain DeFi Top Interop Protocol Wormhole Adds Stacks to Bridge Bitcoin to Multi-Chain DeFi

De-fi

Top Interop Protocol Wormhole Adds Stacks to Bridge Bitcoin to Multi-Chain DeFi – Crypto News

Published

4 months ago

on

Bitcoin L2 Stacks is using Wormhole’s infra to bring native Bitcoin liquidity to Solana and Sui.

Wormhole — a blockchain interoperability protocol that secured $225 million in funding at a $2.5 billion valuation from Coinbase Ventures, Multicoin Capital, and Breven Howard — has added support for Stacks, one of the first Layer 2 (L2) networks on Bitcoin.

With the integration, Stacks’ two key assets — sBTC and STX — can now move across other blockchains using Wormhole’s infrastructure, beginning with Solana and Sui, Wormhole said in an announcement on Tuesday, July 1.

The tokens will adopt Wormhole’s Native Token Transfers (NTT) standard, “enabling native issuance across major DeFi ecosystems.”

Wormhole currently has a total value locked (TVL) of $2.5 billion, and daily bridge volumes reaching up to $35.4 million over the past month, according to data from Artemis.

Stacks’ sBTC is a yield-bearing Bitcoin-pegged token designed to let people use BTC in DeFi, while STX is the native utility token of the Stacks network and is used to enable smart contracts, among other functions.

At the time of writing, STX’s market cap is just over $1 billion, down about 80% from over $5 billion in March 2024, per data from CoinGecko.

STX market cap 2020-2025. Source: CoinGecko

With the update, users can now move Stacks-native assets into DeFi apps on other chains, not just Stacks. The assets will use NTT’s so-called “burn-and-mint mode” when deployed on Solana and Sui, meaning no wrapped tokens like Wrapped Bitcoin (wBTC) are involved in the process, per the announcement.

the-defiant
Stacks TVL in DeFi, 2022-2025. Source: DeFiLlama

The latest integration could potentially help revive on-chain activity for Stacks, as data suggests that users may have pulled liquidity following the Q2 2024 hype, when STX reached its all-time high.

Data from DeFiLlama show that the TVL in Stacks has dropped by more than half since April 2024, when it was over $400 million, to about $161.5 million as of press time.

Bitcoin scaling solutions have seen an influx of new players taking market share over the past year. Last June, Stacks was the fourth-largest Bitcoin sidechain by TVL, with about $137 million at the time. Today, at over $161 million, it’s the 11th-largest, with Jeff Garzik’s recently launched Hemi taking the top spot by DeFi TVL, with close to $990 million.

Half-Trillion Dollar Opportunity

Wormhole says that the integration will address the “massive opportunity in Bitcoin’s $2 trillion market cap, which has largely remained on the sidelines of DeFi innovation.”

In early 2024, Pantera Capital, a crypto-focused hedge fund from California, published a report saying that the value locked in Bitcoin DeFi could reach up to $450 billion.

At the time, the hedge fund’s analysts explained that even though Bitcoin hasn’t been used for DeFi as much as Ethereum, building decentralized apps on Bitcoin could be a huge “untapped half-trillion dollar opportunity.”

Related Topics:
Continue Reading

Trending