Breaking News: Wormhole and Stacks Collaboration Unlocks Native Bitcoin Liquidity in DeFi
Wormhole Foundation and Bitcoin L2 Labs have announced a groundbreaking collaboration that will revolutionize the way Bitcoin interacts with decentralized finance (DeFi) applications across multiple blockchain networks.
The partnership aims to leverage Wormhole’s interoperability platform and its standard for native token transfers (NTT) to enable native Bitcoin liquidity on DeFi platforms.
Understanding the Collaboration:
Stacks, a Bitcoin Layer 2 solution, is releasing its native stablecoin, Stacked Bitcoin (SBTC), which is backed 1:1 by Bitcoin. This asset enables users to transfer BTC safely and without intermediaries between the Bitcoin Network and other blockchains while maintaining a direct correlation with the original Bitcoin.
Despite its limited capacity launch in just three networks for less than six months, SBTC has already surpassed both Lightning and Liquid networks in total value locked (TVL), exceeding USD 500 million.
The collaborative infrastructure of Wormhole’s NTT and Stacks ensures seamless integration without requiring “wrapped” assets, facilitating smooth liquidity and interoperability. Critical assets like Asymmetric Research and DeFi applications such as Granite and Zest reinforce this infrastructure by ensuring safety and efficiency.
Key Insights and Future Implications:
The collaboration is set to boost Bitcoin’s liquidity, allowing it to be natively used in multiple networks like Solana and Sui. This multichain architecture helps to ensure consistent governance and security, avoiding the usual issues of liquidity fragmentation.
Muneeb Ali, founder of Stacks, highlighted the integration’s potential, emphasizing the technology’s role in unlocking native DeFi applications on multiple blockchain networks, thus enhancing global BTC liquidity. This integration is bolstered by institutions like BlackRock, Global Apollo, and Vaneck, further underscoring its potential for institutional adoption.
Expert Perspectives and Forward-Thinking:
Robinson Burkey, co-founder of Wormhole Foundation, emphasized the importance of this collaboration in enabling digital asset adoption, citing the potential to merge Bitcoin’s security with innovative DeFi multichain solutions. With over $60 billion in multichain volume and nearly $3.5 billion in managed assets, Wormhole’s infrastructure ensures an institutional-grade framework.
This development paves the way for future Bitcoin-centric DeFi applications, positioning SBTC as a decentralized, programmable asset ideal for institutional adoption while maintaining the security and decentralization principles of Bitcoin.
About Stacks and Wormhole:
Stacks is a Layer 2 solution built on top of the Bitcoin blockchain designed to unlock new use cases for Bitcoin by enabling smart contracts. Wormhole is an interoperability protocol that allows the transfer of tokens between blockchains without needing intermediaries.
