Bitcoin L2 DeFi and the Role of BitVM
A new article examines the development of Bitcoin Layer 2 DeFi, arguing that overcollateralized lending aligns more closely with Bitcoin’s technical model than complex application frameworks. It also discusses BitVM as a longer-term avenue for reducing bridge trust assumptions.
crypto-economy.com
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Bitcoin L2 is not a casino: Why overcollateralized lending beats algorithmic credit in DeFi
Teams building on Bitcoin L2 have spent two years running a collective experiment whose results now read clearly. The Ordinals inscription cycle, BRC-20 tokens, and EVM-style application experiments on Bitcoin sidechains generated transient volume and speculative activity but did not produce sustainable product-market fit.