BlockEden published an overview of the emerging BTCFi landscape, examining the race among Bitcoin Layer 2 projects to enable DeFi-style functionality on Bitcoin. The article compares approaches across Babylon, Lightning, Stacks, and hybrid designs, highlighting BitVM-based bridges as a potential path toward trust-minimized Bitcoin DeFi.
Bitcoin's scripting language is intentionally simple. Satoshi Nakamoto prioritized security and decentralization over programmability. This made Bitcoin incredibly robust—no major protocol hack in 15 years—but it also meant that anyone wanting to use BTC in DeFi had to wrap it first.