Devs to Launch New DeFi and Smart Contract Solution on Bitcoin

The vision of integrating decentralized finance (DeFi) into Bitcoin has long been a challenging goal, primarily due to Bitcoin's lack of native support for smart contracts. However, a new development, OP_NET, aims to bridge this gap by leveraging Bitcoin's Taproot upgrade to introduce smart contracts and other DeFi functionalities to the Bitcoin blockchain.

Launching its testnet on Wednesday, OP_NET utilizes the Tapscript feature from Taproot—an upgrade also responsible for innovations like Ordinals and Runes. OP_NET's co-founder, Chad Master, explains that the project's goal is to create a meta-protocol system that is permissionless and enables the deployment of decentralized applications (dApps) and smart contracts directly on Bitcoin.

“We want to see DeFi fully realized on Bitcoin,” Chad Master told Decrypt. He highlighted that the mainnet is expected to go live by late September. “Our aim is to offer a solution that allows people to use Bitcoin without compromising its security and decentralization or moving it to another blockchain.”

OP_NET employs WebAssembly (WASM), allowing smart contracts to be written in various languages such as AssemblyScript/TypeScript, Rust, Python, and C++. This approach simplifies smart contract development and execution on Bitcoin.

Transactions on OP_NET are identified by the string “BSI” in an arbitrary data field and are sent to unspendable Bitcoin addresses, which are then processed in the OP_NET virtual machine (OP_VM). This virtual machine operates similarly to the Ethereum Virtual Machine, termed here as the Bitcoin Virtual Machine.

Chad Master shared that OP_NET evolved from earlier work on a Bitcoin-based decentralized exchange called MotoSwap. While MotoSwap remains a significant application, the team decided to focus on OP_NET to provide a broader DeFi ecosystem, including lending protocols and stablecoins.

Despite the potential for scams and Ponzi schemes in a permissionless environment, Master emphasized the importance of creating a space for such innovation while maintaining a focus on genuine, constructive applications.

OP_NET also supports fungible (OP_20) and non-fungible tokens (OP_721), mirroring Ethereum’s ERC-20 and ERC-721 standards. By tapping into Bitcoin’s substantial stagnant liquidity, OP_NET aims to offer Bitcoin holders opportunities to generate yield and leverage their assets directly on the Bitcoin blockchain.

Master is optimistic about the future of DeFi on Bitcoin, asserting that decentralized finance should thrive on Bitcoin as much as it does on more programmable blockchains like Ethereum. “Our goal is to bring the same level of expressibility and creativity to Bitcoin that exists on other blockchains,” he concluded.

source: https://decrypt.co/244392/oracle-patent-purchase-defi-education-fund-makerdao