Bitcoin Ecosystem Liquidity Liberation and New Paradigm Construction

Bitcoin, as the largest and highest-quality pool of funds in the crypto world, is gradually unlocking its potential liquidity value. Recently, the largest on-chain lending protocol in the Bitcoin ecosystem completed a million-dollar financing, indicating that BTC will transition from being merely a store of digital value to a more active financial instrument.

In fact, BTC is gradually extending to richer on-chain structured yield scenarios, forming a unique BTCFi ecosystem. If dormant BTC assets can be efficiently activated and a secure liquidity network is built, it will open up a global DeFi application space for this trillion-dollar asset.

Currently, the total locked value on the Ethereum chain has exceeded $64 billion, a significant increase of nearly 180% compared to the same period last year. In contrast, although Bitcoin's market value and price performance are outstanding, its on-chain ecosystem expansion speed still lags behind Ethereum. However, if BTC's liquidity can be released by 10%, it will create a market of $180 billion. If it can reach a TVL ratio similar to ETH's of approximately 16% (, it is more likely to release about $300 billion in liquidity, driving explosive growth in the BTCFi ecosystem, and even surpassing EVM networks to become the largest on-chain financial ecosystem.

Against this backdrop, a certain lending platform has become the largest lending protocol in the BTC ecosystem, second only to DAI and lisUSD. The platform's TVL has surpassed $2 billion, and the Bitcoin stablecoin it launched exceeded $500 million in locked assets just one week after its launch, setting a record for the fastest TVL growth of any lending protocol in DeFi history.

For BTC holders, activating dormant assets is a necessity, but at the same time, they hope to avoid the risk of principal loss. On-chain lending protocols based on Bitcoin have emerged, providing BTC holders with greater liquidity to participate in other projects within the ecosystem. Some platforms adopt a fixed interest rate lending model, where professional institutions custody the mortgaged Bitcoin while providing an unlimited supply of stablecoins. This model has been recognized by the market.

![Penetrating the Bitcoin Lending Business: A New Paradigm Reconstruction of Trillion-Level Liquidity])https://img-cdn.gateio.im/webp-social/moments-471dce8b90ff315ffafbdd69ba308f81.webp(

From the perspective of stablecoins, on-chain decentralized stablecoins are still dominated by debt-collateralized positions )CDP( stablecoins. CDPs are essentially a stablecoin usage extension built on lending scenarios, creating additional liquidity trading pools for dormant assets. Some platforms have built a complete ecosystem that includes stablecoins, lending protocols, hybrid lending platforms, and more.

These platforms not only solve the long-standing stablecoin issue in the Bitcoin ecosystem but also achieve multi-chain compatibility through cross-chain technology, allowing users to seamlessly operate stablecoins across multiple DeFi ecosystems, indirectly bringing the liquidity of the Bitcoin ecosystem to other chains.

As Bitcoin assets become increasingly active, BTCFi is expected to become a new DeFi asset direction with a scale of hundreds of billions of dollars, serving as a key to building a prosperous on-chain ecosystem. By building diversified financial products and DeFi scenarios centered around BTC, it will redefine BTC's role in the global DeFi space. Whether the deep integration of BTC in the DeFi sector can reach a critical turning point is worth the market's continued attention.

![Penetrating the Bitcoin Lending Business: A New Paradigm Reconstruction of Trillion-Level Liquidity])https://img-cdn.gateio.im/webp-social/moments-fa7fc7f880a828328b3d85483ba1c27d.webp(