Written by: 0xResearcher
Imagine holding the world’s most valuable digital asset—Bitcoin—but it’s like a gold bar locked in a safe, unable to do anything except appreciate in value. It feels like driving a Ferrari but only being able to circle around a parking lot—exciting yet frustrating.
But this situation is undergoing a complete transformation. In Q3 2025, when we see a project’s community sale oversubscribed by 1400%, attracting 21,340 participants from 132 countries in a frenzy, it’s no longer just a successful fundraising event—it’s a microcosm of the explosive growth of the Bitcoin DeFi ecosystem. The data is even more telling: in 2025, the BTCFi market experienced over 22x growth, with total value locked surging by more than 2000%. Behind these numbers is the full awakening of a sleeping giant.
From the phenomenal performance of Pump Fun to the TGE plans announced by star projects like Linea, Monad, and Berachain, the entire crypto market seems to be on steroids. Among this wave, the most interesting story is that Bitcoin has finally "learned" to do DeFi.
For a long time, Bitcoin was like the venerable elder in the crypto world—respected by all, but always sitting quietly in the corner, rarely joining the younger generation’s games. Ethereum was having a blast with DeFi, spawning countless protocols, while Bitcoin maintained its aloof "I am digital gold, and that’s all" attitude. But now, things are completely different. Technological breakthroughs have finally enabled Bitcoin to participate in the DeFi game, and its entry is nothing short of explosive.
Staking Track: A Gorgeous Transformation from "Lying Flat" to "Earning While Lying Down"
The success of the Babylon protocol is simply breathtaking. Who would have thought that in an opening in October 2024, 24,000 Bitcoins (about $1.5 billion) would flood into staking in just 1 hour and 40 minutes, with the first round of 1,000 Bitcoins snapped up in 74 minutes. It’s reminiscent of scrambling for concert tickets, except this time, everyone is vying for a chance to invest in Bitcoin infrastructure.
Babylon’s core innovation lies in enabling native Bitcoin staking, meaning Bitcoin holders can finally earn yields without losing control of their assets. Simply put, your Bitcoin can "go to work and earn money" while remaining secure. This technological breakthrough is akin to installing a perpetual motion machine in a gold bar—preserving value while also generating returns.
Following closely, Core DAO also launched its own Bitcoin staking solution, introducing Bitcoin’s security into its network via the Satoshi Plus consensus mechanism. Their strategy is even more aggressive, directly airdropping CORE tokens to stakers, attracting a large number of Bitcoin miners. This dual-income model of "mining + staking" has provided miners, who previously could only earn through mining, with a new source of income.
Even more interesting is the flourishing of the liquid staking token (LST) track. This field is like the "arsenal" of Bitcoin DeFi, equipped with all kinds of weapons. Lombard’s LBTC reached $1 billion in TVL in just 92 days, becoming the first Bitcoin LST recognized by blue-chip protocols such as Aave, Spark, and EigenLayer—essentially obtaining a "passport" to the DeFi world.
pumpBTC takes a different approach, focusing on cross-chain liquidity solutions, allowing users to utilize staked Bitcoin across multiple chains. Lorenzo Protocol aims to be the unified liquidity layer for the Bitcoin ecosystem, striving to become the central hub for all Bitcoin DeFi activities. Allo Protocol is even more ambitious, seeking to build a decentralized Bitcoin asset management platform, enabling professional investors to manage Bitcoin portfolios for retail investors.
All these protocols are trying to solve the same core issue: how to let Bitcoin "earn money while lying down" and maintain liquidity. It’s like putting wheels and an engine on a gold bar—able to move and run on its own.
Infrastructure Wars: Equipping Bitcoin with a "Smart Brain"
If staking has taught Bitcoin to "make money," then innovation at the infrastructure level is about giving Bitcoin a "smart brain." The intensity of this technological race is no less than the "browser wars" of the past.
BOB (Build on Bitcoin) may be one of the most ambitious projects in this field. Through BitVM technology, they have accomplished what seemed impossible: perfectly combining Bitcoin’s security with Ethereum’s DeFi capabilities. BOB’s solution is like installing a "translator" for Bitcoin, enabling it to understand and execute complex smart contracts while maintaining its original security features. Currently, BOB has attracted over 30,000 Bitcoins in bridged funds, becoming a key gateway to Bitcoin DeFi.
Arch Labs has chosen a more direct route. They are developing ArchVM, aiming to implement Turing-complete smart contract capabilities directly on Bitcoin’s base layer. It’s like performing a "brain transplant" on Bitcoin, transforming it from a simple value storage tool into a smart platform capable of running complex applications. Although technically challenging, success would fundamentally change Bitcoin’s positioning.
Hemi Network’s solution is even more ingenious. They embed Bitcoin nodes directly into the Ethereum Virtual Machine, creating a hybrid architecture. This design allows developers to leverage both Bitcoin’s security and Ethereum’s programmability, like building a bridge connecting two worlds. Hemi claims to be "the largest programmable layer on Bitcoin"—which may sound boastful, but they have indeed achieved significant technical breakthroughs.
In this infrastructure war, Lombard has chosen a relatively pragmatic yet equally innovative path. As a protocol focused on unlocking Bitcoin liquidity, Lombard provides Bitcoin holders with an "optimal balance" through its LBTC token—enabling staking yields while allowing free use across major DeFi protocols. The success of this strategy is evident from its community sale data: originally aiming to raise $6.75 million, it ultimately received $94.7 million in subscription applications, an oversubscription rate of 1400%. With 21,340 participants from 132 countries flooding in, it was like a massive global gathering of the Bitcoin community.
Interestingly, Lombard’s success is not only reflected in fundraising data but also in its precise strategic positioning. They didn’t try to reinvent the wheel, but focused on being the "connector"—enabling Bitcoin to seamlessly integrate into the existing DeFi ecosystem. LBTC has already been recognized by blue-chip protocols such as Aave, Spark, and EigenLayer, which is equivalent to obtaining a "VIP pass" in the DeFi world.
Stacks has taken another route, leveraging its unique "Proof of Transfer" consensus mechanism to "borrow" Bitcoin’s security for its smart contract platform. DeFi protocols on Stacks, such as ALEX and Arkadiko, have already accumulated a significant user base, proving the viability of this technical path. Recently, Stacks also launched sBTC, aiming to provide a better cross-chain Bitcoin experience while maintaining decentralization.
Most interesting is Rootstock (RSK), a project that has been running for several years, providing smart contract functionality for Bitcoin through sidechain technology. Although not the newest project, RSK’s status in the Bitcoin DeFi field is like that of a "senior elder," offering valuable experience and lessons for newcomers. They have recently launched new scaling solutions, aiming to improve transaction efficiency while maintaining compatibility with the Bitcoin mainnet.
These infrastructure projects are like equipping Bitcoin with various "add-ons" and "plugins," finally allowing this elder to showcase its prowess in the DeFi world. Each project has its own technical path and advantages, but the goal is the same: to unleash Bitcoin’s immense potential in DeFi. Judging by the fervor of Lombard’s community sale, the market is clearly full of anticipation for such innovation.
When you see investors from 132 countries simultaneously saying "yes" to a BTCFi project, it’s no longer a small regional affair, but a global referendum on Bitcoin’s future. From the auroras of Northern Europe to the coconut groves of the equator, from Wall Street cafes to late-night offices in Tokyo, investors worldwide are focused on the same thing: this silent giant is finally about to speak.
The attitude shift on Wall Street is even more intriguing. When traditional financial giants start seriously considering Bitcoin allocation, they’re not just looking to buy and hold—they want professional financial products that generate yields, offer liquidity, and meet compliance requirements. BlackRock and Fidelity’s attention to Bitcoin ETFs is just the first step; next, they’re likely to seek more complex Bitcoin financial products. This is the value of BTCFi infrastructure—it upgrades "digital gold" into "yield-generating gold."
The behavioral changes among retail investors are also interesting. They’ve long grown tired of only being able to "hold the bag" in the secondary market and now want to start on equal footing with institutional investors. This demand has driven fairer, more transparent token distribution mechanisms and explains the explosive popularity of community sales. When ordinary investors realize they can participate in the early stages of infrastructure building, their enthusiasm is fully ignited.
But what we’re seeing now may be just the tip of the iceberg. Compared to the maturity of the Ethereum DeFi ecosystem, Bitcoin DeFi is still like a child just learning to walk. There’s enormous room for innovation in staking mechanisms, liquidity management, yield optimization, and risk management. Moreover, as the regulatory environment becomes clearer, compliant BTCFi products will have even greater room for development.
Most interestingly, the competitive landscape of this track is far from settled, much like the American West during the gold rush—full of opportunities, but also significant risks. Technical paths are still being explored, business models are still being validated, and user habits are still being cultivated. This uncertainty is both a challenge and an opportunity, giving new entrants a chance to overtake incumbents on the curve.
Those projects that can provide full-stack solutions, build a strong community foundation, and gain recognition from mainstream protocols are likely to become the biggest winners in this "gold rush." The key is whether they can strike a balance between technological innovation, user experience, security, and compliance.
Conclusion
Looking ahead, we are very likely to see Bitcoin evolve from "digital gold" into the most important foundational asset within a multi-chain DeFi ecosystem. Infrastructure will become increasingly sophisticated, interoperability between protocols will continue to improve, and ultimately a complete Bitcoin financial ecosystem will emerge. By then, BTCFi products may be as widely accepted by mainstream markets as today’s traditional financial products.
When 21,340 people from 132 countries simultaneously cast a vote of confidence in a project, it’s no longer just an investment—it’s a collective bet on the future of Bitcoin finance. Judging by the current momentum, this bet is likely to yield substantial returns. After all, when the world’s most valuable digital asset finally learns to "work and earn," and is equipped with a "smart brain," who wouldn’t want to be part of this story?
