The development of Bitcoin-native decentralized finance (DeFi) may include more steps than Bitcoin Runes and BRC-20 tokens.According to Rich Rines, a Core DAO contributor creating Bitcoin DeFi solutions, the motivation behind the creation of Runes and Bitcoin DeFi was to increase the usefulness of the safest blockchain network in the world.Rines shared with Cointelegraph.
“[Bitcoin] started as a peer-to-peer electronic cash system then morphed more into a store value and now protects $1.5 trillion of wealth. We’ve seen over the last one and a half years this desire to add more utility to the underlying Bitcoin through the rise of Ordinals, token protocols like BRC 20s and now Runes.”
On April 20, the day of the Bitcoin halving, Runes, a new system for producing fungible tokens on the Bitcoin network, went live.Runes belong to a larger development movement called Bitcoin DeFi, or BTCFi, which aims to improve the functionality of the Bitcoin network.Although Runes generated a lot of excitement among Bitcoin owners, Rines believes that because BTCFi is a decentralized network, the token standard may just be a step in the right direction.
“Hard to say if [Runes] remains the standard since Bitcoin is so decentralized. We will have to get to some sort of social consensus on some of the standards that win. Market demand and people voting with their dollars will ultimately be what helps coalesce on the final answer.”
Bitcoin Runes made a recovery this week. On April 20, Runes-related transactions accounted for the majority of Bitcoin transactions, or 81.3% of daily BTC transactions, according to Dune Analytics Data.
On April 23, Core Chain introduced the first noncustodial Bitcoin staking product, allowing Bitcoin staking without jeopardizing the network’s security and supporting BTCFi innovation.
According to Rines, noncustodial staking offers Bitcoin holders a risk-free income potential because it doesn’t require the underlying asset to leave their wallet.
“That’s where the noncustodial Bitcoin staking shines, where you take no risk. It’s totally trustless, Bitcoin becomes a yield-producing asset for the first time with those rewards that you can invest it in more Bitcoin, creating a reflexive loop.”
More protocols are in the process of making Bitcoin more useful. The first-ever synthetic US dollar backed by Bitcoin and capable of yield generation was introduced by Hermetica on May 6.With yields as high as 25%, USDh is expected to be released in June and is expected to be a key component in expanding BTCFi’s liquidity and use cases.