Bitcoin Defi is no longer a fringe experiment.
From a new report from ARCH NETWORK, shared with Coindesk, shows that the total value locked (TVL) in Bitcoin-Native Protocols has risen from $ 307 million in January 2024 to $ 6.36 billion by mid-2015-a 20-fold increase driven by loaning apps, stabile-illes.
The data, collected from 125 developers, investors and users in Asia and Africa, sketch a picture of a shifting story away from “digital gold” and to programmable, yielding Bitcoin
.
Lending and loan protocols are the most cited usage protocols, mentioned by 59% of the respondents.
Bitcoin-stuned Stablecoins followed (41%), then Dexs (32%) and Real-World assets such as Tokenized Real Estate (29%). These are not speculative side bets are early signs of product market fit, especially for users who want access to liquidity without selling BTC.
But trust problems continue to exist. 36% still keep their bitcoin in cold storage, with reference to a lack of trust in current Defi platforms. Another 25% avoids Bitcoin Defi due to a highly observed risk, while 60% of all respondents marked smart contract -exploits as the best security problem.
“The true potential of Bitcoin is further than a passive value of value,” wrote Arch -CHATO Matt Mudano in the report. “The next limit is to unlock his liquidity.”
Developers are divided between optimism and frustration. 44% said they build on Bitcoin because of unparalleled security and decentralization, while 43% also mentioned limited smart contract functionality as their biggest pain.
Tooling, composability and documentation were also mentioned as major obstacles.
As a result, many Bitcoin Defi -builders Multichain are also built on Ethereum at 63%, 47% on Solana and 44% on the base.
Nevertheless, almost half say they are planning to become Bitcoin-Native in the long term as a new infrastructure, such as ARCHVM, a Bitcoin-based virtual machine, indigenous smart contracts promises without the need for bridges, packed assets or assumptions.
What is needed to scale up Bitcoin Defi? Respondents say that a better DEV tool (45%), wider layer 2 -acceptance (43%) and deeper liquidity. Security is non-negotiable, and most developers say they will not build unless onchain assets are fully auditable and bridges are hardened.
Despite the challenges, investors look closely.
“If even a fraction of Bitcoin’s $ 2 trillion market capitalization becomes productive,” said Shahan Khoshafian of DPI Capital, “the advantage is huge.”
For now, Bitcoin Defi where Ethereum was in 2019 – niche, raw and full of potential. However, if these builders have the upper hand, BTC is not kept alone. It will be used.
