Bitcoin's role in decentralized finance (DeFi) is growing, Binance Research analyst Moulik Nagesh reports. The Bitcoin DeFi ecosystem allows users to conduct various financial transactions with the largest cryptocurrency without a third party.
Currently, only 0.8% of BTC tokens is used in DeFi. However, even such a small share of tokens in the ecosystem could provide a major boost to the industry's growth. It could reach $1 trillion in the future, Julian Love of Franklin Templeton Digital Assets believes.
However, this will require the development of the Bitcoin network, namely Layer 2 solutions, which can enhance performance while reducing transaction fees. With the right approach to this issue, the potential of Bitcoin DeFi is huge, Nagesh notes.