Due to the recent exponential growth of BTC, the total value locked on the Bitcoin blockchain has reached $315 million, setting a new all-time high.
The total value locked in Bitcoin has recently reached a new ATH after BTC price touched a new year-to-date high. It is worth noting that the previous ATH was set in November 2021 (at the same time when BTC reached an ATH), when the price of BTC was 60% higher than the current price.
While Bitcoin does not support smart contracts, developers are focusing on using the base layer as a settlement layer. They are pushing complex use cases to higher layers to improve functionality without compromising scalability or security. This has led to the emergence of "locked coins" on the Bitcoin blockchain. Here are the top 7 protocols by TVL (Total Value Locked) on Bitcoin:
- The Lightning Network is a second-layer scaling solution for Bitcoin, designed to enhance scalability and enable faster, cost-effective transactions through off-chain payment channels.
- THORChain is a decentralized liquidity protocol that facilitates cross-chain token swaps, allowing users to trade assets across different blockchains in a trustless manner.
- BiFi is a web3 derivatives protocol that provides decentralized cross-chain liquidity for staked assets.
- Maya Protocol is a decentralized liquidity protocol for exchanging assets across blockchains.
- HOPE Collateral is distributed stablecoin backed by crypto-native reserves.
- BoringDAO is an inter-blockchain hub that enables assets to be transferred across different chains, in a cost-efficient and timely manner.
- Mento is a decentralized and transparent protocol that enables the creation of stable value digital assets.
However, there are some other solutions designed to unleash the full potential of Bitcoin:
- Positioned as a layer-2 sidechain, Liquid Network enhances Bitcoin's security and scalability without altering its base layer. It operates independently with its own ledger and consensus mechanism, enabling quicker transaction settlements and improved confidentiality.
- As a layer-2 solution, Mintlayer facilitates tokenization and secure value transfers on the Bitcoin network. It grants Bitcoin users access to a variety of DeFi applications with tangible value, eliminating the need for wrapped tokens or token bridges.
- RSK serves as a sidechain introducing smart contract functionality to Bitcoin through a two-way peg. This allows the conversion of BTC into rBTC, enabling participation in diverse DeFi applications built on the RSK platform.
- Positioned as a layer-2 smart contract platform, Stacks enhances Bitcoin's capabilities through contracts and decentralized applications. It introduces new features to Bitcoin while maintaining a focus on security.
- Operating as a layer-3 protocol, Taproot Assets empowers users to issue fungible and non-fungible digital assets on the Bitcoin blockchain. These assets can seamlessly transfer to the Lightning Network, leveraging the recent Taproot upgrade for improved asset issuance on the Bitcoin blockchain.