Cardano Announces Integration of Bitcoin Rollup Protocol BitcoinOS, Transitioning to Bitcoin L2, Aiming to Release Up to $1.3 Trillion in Bitcoin Liquidity for Its Ecosystem.
Cardano, in contrast to relying on centralized custodians, has announced the integration of the Bitcoin Rollup protocol BitcoinOS to transform into Bitcoin L2, with the goal of releasing over $1.3 trillion in Bitcoin liquidity for its ecosystem. Through BitcoinOS’ Grail bridge, users can transfer Bitcoin to the Cardano ecosystem without the need for trust and participate in various applications such as DeFi.
Cardano’s co-founder, Charles Hoskinson, is one of the early Bitcoin enthusiasts. However, he has criticized the technological limitations of Bitcoin, which hinder the development of diverse application scenarios. Therefore, he chose to develop his own Layer 1 blockchain, which is Cardano.
Now, as the awakening of Bitcoin’s dormant liquidity becomes increasingly important, Cardano has also announced the integration of the Bitcoin Rollup protocol BitcoinOS, transitioning into Bitcoin L2, with the hope of releasing over $1.3 trillion in Bitcoin liquidity for its ecosystem.
Hoskinson described BitcoinOS’ breakthrough technology, especially the successful verification of the first ZK proof on the Bitcoin mainnet at the end of July, providing Bitcoin with “eyes and brains” to identify and understand activities on other chains. He further explained that this technology enables trustless interoperability between Bitcoin and other blockchain ecosystems.
Three Highlights of Cardano’s Integration of BitcoinOS
In their joint statement, Cardano emphasizes that both Cardano and Bitcoin are based on the UTXO transaction model, which enhances compatibility between the two chains and allows Cardano smart contracts to run directly on the Bitcoin mainnet without relying on bridges.
Furthermore, Cardano adopts a layered architecture, prioritizing stability in the settlement layer and optimizing scalability and flexibility in the computation layer. Cardano states that this design philosophy aligns with the position of Bitcoin supporters in the block size debate.
Cardano points out that, unlike wrapped versions of Bitcoin such as WBTC that rely on centralized custodians, Bitcoin users can transfer BTC to the Cardano ecosystem without trust through the BitcoinOS Grail bridge. The official statement from Cardano explains that after transferring BTC to Cardano, users can participate in over 1,300 protocols on the network, such as exchanging BTC for fiat currencies or other assets on DEXs like SundaeSwap or engaging in decentralized lending through Liqwid. Cardano is optimistic about this demand and highlights that the current circulating supply 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 around $225 million, indicating significant growth potential.
Catalyst for ADA’s Bullishness?
Cardano, which is optimistic about Bitcoin’s upcoming revival, believes that the new wave of 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 data from CoinGecko, ADA is currently trading at $0.3488, showing a 3.6% increase in the past 24 hours, seemingly driven by the rise in Bitcoin.
Currently, the top three circulating wrapped Bitcoin tokens are WBTC, BTCB, and SolvBTC. With Cardano’s entry into this race and the introduction of a trustless solution (currently most representative by tBTC), it remains to be seen whether this will change the existing market landscape.
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