Cardano has launched Cardinal, the first decentralized financial protocol specially designed for Bitcoin users.
The announcement was made by Cardano (ADA) founder Charles Hoskinson on 9 June via X. Developed by Input Output, the research and development team behind Cardano, Cardinal is Bitcoin (BTC) holders access to Defi services such as credit, deployments and use Lousen.
Cardinal functions by packing Bitcoin, in particular the non -priced transaction outputs. Utxos are Bits Bitcoin who are left of transactions and are used to represent ownership. They are converted into packaged tokens by the protocol, which maintains a 1: 1 PEG with Bitcoin. Users can redeem their wrapped BTC at any time via a safe, fraud -resistant process.
What differently differs from typical packed Bitcoin solutions is the trust-geminimized structure. Instead of being dependent on a central custodian or federal system, Cardinal Musig2 uses a cryptographic system with which several parties can sign transactions together.
This ensures that the original Bitcoin is locked in its native chain and that the system functions safely, even if only one participant is fair.
Another important characteristic is the approach of cardinal for rehypothecation. In traditional finances and some crypto systems, rehypothecation allows preservators to use user activa again, often without full transparency. Cardinal this avoids all control of their assets and at the same time retaining the original Bitcoin.
In addition, the Protocol uses BITVMX, an execution system outside the chain that maintains decentralization and at the same time complex Bitcoin operations is possible. This configuration facilitates safe, simple transfer of assets between the two networks in combination with Cardano smart contracts and the built -in scripping options of Bitcoin.
The project was exhibited during a live demo at the Bitcoin 2025 conference, where IO carried out a Bridgeless BTC-Cardano transfer using BitVMX. The event meant an important step in Cardano’s efforts to become a platform for Bitcoin-Native applications.
Despite the recent progress, Cardano’s Defi -to total value is locked, from a peak of $ 415 million in May to around $ 334 million before 10 June, according to Defillama facts. The team hopes that Cardinal will help bring new liquidity by offering Bitcoin holders more ways to use their assets in a Defi environment, without leaving the Bitcoin ecosystem.
