Cardano announced the integration of the Bitcoin Rollup protocol BitcoinOS, transforming into a Bitcoin L2, with the goal of releasing up to 1.3 trillion US dollars in Bitcoin liquidity for its ecosystem. Unlike solutions that rely on centralized custodians, Cardano’s Grail bridge through BitcoinOS allows users to transfer Bitcoin to the Cardano ecosystem without the need for trust, enabling participation in diverse applications such as DeFi.
Cardano co-founder Charles Hoskinson, one of the early Bitcoin enthusiasts, had previously criticized the limitations of Bitcoin’s technology in diversifying application scenarios, which led to the development of his own Layer 1 blockchain, Cardano.
Now, as the awakening of Bitcoin’s dormant liquidity is increasingly gaining attention, Cardano has announced the integration of the Bitcoin Rollup protocol BitcoinOS, transforming into a Bitcoin L2, aiming to release over 1.3 trillion US dollars in Bitcoin liquidity for its ecosystem.
In an interview, Hoskinson described the breakthrough technology of BitcoinOS, 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 explained that this technology can achieve the interoperability of Bitcoin with other blockchain ecosystems without the need for trust.
Cardano’s integration of BitcoinOS highlights three key points. In their joint statement, Cardano emphasized their transaction model based on the UTXO for compatibility between the two chains, allowing Cardano smart contracts to run directly on the Bitcoin mainnet without the need for bridging. Additionally, Cardano’s layered architecture prioritizes stability in the settlement layer, while optimizing scalability and flexibility for the computation layer. Cardano also pointed out that, unlike wrapped Bitcoin such as WBTC that relies on centralized custodians, Bitcoin users can transfer BTC to the Cardano ecosystem without trust through BitcoinOS Grail bridge. After transferring BTC to Cardano, users can participate in over 1300 protocols on the network, such as exchanging BTC for fiat currency or other assets on DEX like SundaeSwap, or engaging in decentralized lending through Liqwid.
Cardano is optimistic about this demand and notes that the total value locked (TVL) in Cardano’s DeFi ecosystem is approximately 225 million US dollars, with significant growth potential compared to the over 14.7 million WBTC circulating on Ethereum, with a total market value of about 9.75 billion US dollars.
Anticipating a catalyst for ADA’s rise, Cardano believes that investors in the upcoming Bitcoin revival will be interested in assets with seemingly higher growth potential, such as Ordinals, BRC-20, and Bitcoin ETF. Cardano sees itself playing a leading role in the Bitcoin revival era and expects its native token ADA to benefit from the rise, whether through governance participation or gas payments, leading to an increase in its fundamental value.
ADA has risen by nearly 4%. According to CoinGecko data, ADA is currently trading at 0.3488 US dollars, with a 3.6% increase in the past 24 hours, seemingly driven by the rise in Bitcoin.
At present, the three highest circulating wrapped Bitcoin are WBTC, BTCB, and SolvBTC, and Cardano’s entry into this arena with an trustless solution (currently most notably tBTC) may change the existing market landscape, making it worth anticipating.