Cardano announces the integration of the Bitcoin Rollup protocol BitcoinOS, transitioning to become a Bitcoin Layer 2 solution, with the goal of unlocking up to $1.3 trillion in Bitcoin liquidity for its ecosystem. Unlike solutions relying on centralized custodians, Cardano enables users to transfer Bitcoin to its ecosystem without the need for trust through BitcoinOS’s Grail bridge, allowing participation in diverse applications such as DeFi.
Cardano co-founder Charles Hoskinson, an early Bitcoin enthusiast, chose to develop his own Layer 1 blockchain, Cardano, criticizing Bitcoin’s technical limitations in enabling diversified application scenarios. Now, as the attention on awakening dormant Bitcoin liquidity grows, Cardano also announces the integration of the Bitcoin Rollup protocol BitcoinOS, transforming into a Bitcoin Layer 2 solution, aiming to unleash over $1.3 trillion in Bitcoin liquidity for its ecosystem.
Hoskinson describes BitcoinOS’s groundbreaking technology, particularly the successful verification of the first ZK proof on the Bitcoin mainnet at the end of July, providing Bitcoin with “eyes and a brain” to identify and understand activities on other chains. He further explains that this technology allows for trustless interoperability between Bitcoin and other blockchain ecosystems.
Cardano’s integration of BitcoinOS highlights three key points. In their joint statement, Cardano emphasizes that both Cardano and Bitcoin are based on the UTXO transaction model, enhancing compatibility between the two chains and enabling Cardano smart contracts to run directly on the Bitcoin mainnet without the need for bridging.
Additionally, Cardano adopts a layered architecture, prioritizing settlement layer stability and optimizing scalability and flexibility for the computation layer. Cardano states that this design philosophy aligns with the stance of Bitcoin supporters in the block size debate.
Cardano points out that, unlike wrapped versions of Bitcoin like WBTC relying on centralized custodians, Bitcoin users can transfer BTC to the Cardano ecosystem without the need for trust through the BitcoinOS Grail bridge. The official statement from Cardano further explains that after transferring BTC to Cardano, users can participate in over 1,300 protocols on the network, such as exchanging BTC for fiat or other assets on DEXs like SundaeSwap or engaging in decentralized lending through Liqwid. Cardano is optimistic about this demand and notes that the current circulation of WBTC on Ethereum exceeds 147,000 tokens, with a total market value of approximately $9.75 billion, while Cardano’s DeFi ecosystem TVL is only about $225 million, indicating significant growth potential.
Is ADA’s Rise Imminent?
With Cardano’s optimism about the impending renaissance of Bitcoin, it believes that investors brought by Ordinals, BRC-20, and Bitcoin ETFs will not only want to buy Bitcoin but also seek other assets with seemingly higher growth potential. Cardano states that it will play a leading role in the Bitcoin renaissance era, and its native token ADA will also benefit from the rise in its fundamental value, whether through governance participation or gas payments.
ADA Rises Nearly 4%
However, according to CoinGecko data, ADA is currently trading at $0.3488, with a nearly 3.6% increase in the past 24 hours, seemingly driven by the rise in Bitcoin. Currently, the top three highest circulating wrapped Bitcoin tokens are WBTC, BTCB, and SolvBTC. Cardano’s entry into this race with its trustless solution (currently represented by tBTC) may change the existing market landscape, which is worth anticipating.
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