Cardano founder Charles Hoskinson has raised eyebrows with his latest remarks on the future of decentralized finance, warning that Bitcoin could overthrow Ethereum as the leader of the sector.
The Cardano founder made this bold assertion in an interview, where he commented on the future of DeFi and the potential role Bitcoin could play in the sector. Despite Ethereum being the hub for DeFi, Hoskinson argued that it is not the ultimate leader in decentralized finance.
Bitcoin is the Sleeping Giant of DeFi
He calls Bitcoin the sleeping giant of DeFi, given that the blockchain network has yet to develop its DeFi ecosystem. Hoskinson suggested that when Bitcoin eventually integrates DeFi capabilities, its total value locked could reach billions of dollars.
In his view, Bitcoin’s TVL will surpass the market cap of Ethereum, which currently stands at $520.78 billion. For context, Ethereum’s TVL stands at $91 billion as of today.
According to him, Bitcoin will attract far more liquidity than Ethereum currently sees in the sector. In addition, Hoskinson predicted that sovereign entities and institutions, including BlackRock, will build on Bitcoin rather than Ethereum.
“Cardano, Not Ethereum, Should Power Bitcoin DeFi”
Further, Hoskinson contended that there is no compelling reason to leverage Ethereum-based solutions to power Bitcoin DeFi. He argues that the inherently adversarial relationship between the two blockchains makes it unlikely for Ethereum to serve as the backbone of Bitcoin’s DeFi ecosystem.
Instead, Hoskinson believes that alternative blockchains, such as Cardano, or Layer-2 solutions, like Stacks, are better positioned to support Bitcoin DeFi.
Hoskinson has consistently maintained that Bitcoin will ultimately take the lead in the DeFi space, surpassing both Ethereum and Solana in the process. He is also working to ensure that Cardano becomes the enabler of Bitcoin’s DeFi solution.
Progress So Far on Bitcoin DeFi
This initiative, which began last year, saw Cardano’s development arm, EMURGO, team up with BitcoinOS to introduce DeFi solutions to the premier blockchain.
Following the partnership, Hoskinson revealed plans to revive the Bitcoin Education Project and also train developers on leveraging Aiken, a Cardano programming language, to build and deploy smart contracts.
The goal is to educate Bitcoin developers on how to utilize Aiken, enabling them to create hybrid applications that bridge the Cardano and Bitcoin ecosystems.
In a February podcast, Hoskinson noted that Cardano’s Babel fees could enable Bitcoin holders to tap into the growing DeFi economy without leaving the Bitcoin ecosystem. He also highlighted the potential role of Cardano’s privacy-focused sidechain, Midnight, in supporting Bitcoin DeFi by allowing users to stake their BTC without having to wrap it.
Further advancing this vision, Cardano’s light wallet, Lace, introduced BTC support earlier this year, allowing users to send, receive, and manage their Bitcoin directly within the platform. This integration also allows users to swap native BTC with other Cardano-based assets.
Interestingly, analysts suggest the project could also benefit Cardano significantly, with some forecasting that enabling Bitcoin DeFi might push ADA’s price above $20
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