Recently, Chainlink Labs Chief Business Officer Johann Eid sat down with Botanix Labs co-founder and COO Alisia Painter to discuss how building DeFi on Bitcoin (BTCFi) can boost the adoption and utility of the world’s oldest and largest cryptocurrency.
Eid distilled Bitcoin’s ability to break the cycle of inflationary fiat currencies.
“People work for money that loses value over time,” he said. “It starts looking like a very bad bargain.”
Created after the 2008 financial crisis, BTC has evolved as a hedge against inflation with no central entity controlling its supply. As global fiat currencies continue to hyperinflate, Eid believes the need for stability and decentralization BTC provides has since increased each year.
Botanix Labs’ Spiderchain is the first fully decentralized Ethereum Virtual Machine (EVM)-equivalent layer-2 network on Bitcoin. Using proof of stake, Spiderchain expands Bitcoin’s utility beyond buying, selling, and holding by bringing the strengths of Ethereum and the EVM to Bitcoin’s ecosystem.
Painter views Chainlink as vital connective tissue for BTCFi. As a member of Chainlink Scale, Spiderchain leverages Chainlink Data Feeds for verifiable onchain data and Cross-Chain Interoperability Protocol (CCIP) as its canonical cross-chain infrastructure.
She described BTC as the “most retail-friendly crypto” which continues to withstand the test of time. Botanix’s layer-2, which does not propose any changes to the Bitcoin base layer, is designed to preserve BTC as a “pristine” currency while satisfying users’ growing appetite to put BTC to work in the most decentralized way possible.
Emphasizing the Ethereum and Bitcoin communities’ similar goals, Eid said building BTCFi on top of the EVM, where the majority of DeFi resides, makes “complete sense.”
“You want to go where developers are,” he explained. “You don’t want to start from scratch, because the goal is not to reinvent DeFi; it’s to see how DeFi can work if it’s built on top of Bitcoin.”
Envisioning the future of BTCFi, he believes the priority should be developing products that are “less niche and more mainstream,” such as BTC payments and savings accounts.
“We don’t have many stable, safe assets in the world; it’s as simple as that,” said Eid. “Every time I look at the news, I get more convinced about Bitcoin. We’re on the brink of a big change in the world, where too much instability has warranted a big need for stability, and I think Bitcoin is extremely well-placed to be a stable beacon in a very unstable world.”