Square CEO Jack Dorsey has disclosed that the company is forming a separate unit that will concentrate on developing Bitcoin-based decentralized banking facilities. The new division will also be creating a “open developer framework with the exclusive purpose of simplifying the creation of non-custodial, permissionless, and decentralized financial services.” In his tweet, Dorsey also stated that “Bitcoin is our main objective.”
Engineer Mike Brock, who earlier headed a team of coders to work on embedding Bitcoin functionality for the Cash App in 2018, was designated the unit’s leader by Dorsey. Brock has worked on open source ventures as part of Red Hat Inc., an enterprise level open source solutions provider.
A company of Square’s size striving to offer simple DeFi solutions on Bitcoin may possibly boost adoption and give Ethereum-based DeFi a run for its money. Bitcoin presently lacks smart contract functionality, making it tough to fight with Ethereum-based DeFi and its compatible ‘Money Legos.’
To launch smart contracts, decentralized finance on Bitcoin requires special framework like bridges and sidechains.
Like our new #Bitcoin hardware wallet, we’re going to do this completely in the open. Open roadmap, open development, and open source. @brockm is leading and building this team, and we have some ideas around the initial platform primitives we want to build.
— jack (@jack) July 15, 2021
Ethereum leads the 100 largest DeFi platforms with respect to locked value (TVL), as per Defi Llama statistics, with AAVE leading the pack with $9.09 billion TVL. Binance also competes with services like Pancake Swap, which is ranked ninth and has $3.76 billion in TVL. The Lightning Network, which holds the position of 103 on DeFi LLama and has a TVL of $58.7 million, is the top ranked Bitcoin-based venture.
Nevertheless, TVL isn’t always the ideal metric for assessing the Lightning Network’s usefulness. In 2021, DeFi on Ethereum has expanded, with the entire DeFi customer base (as defined in context of unique addresses) growing from 1.1 million in January to roughly 3 million in July, as per Dune Analytics data.
Another reason that might assist the spread of BTC-based DeFi, in addition to Square’s current effort, is the Taproot upgrade scheduled for mid-November. Furthermore, the update is said to allow for the use of BTC smart contracts.
On a personal note, I just want to say that I am super excited to return to the world of open source. I cut my professional teeth in open source at @RedHat and excited to prove to the world (again) that great businesses can be built atop of free and open software.
— Mike Brock (@brockm) July 15, 2021
Square’s new business unit complements its other service offerings, which include Cash App, Square Seller, and the Tidal streaming facility, which Dorsey lately hinted might incorporate blockchain tech components like smart contacts and NFTs.
Days from 0 to 1m unique addresses pinging DeFi: 1,080
Days from 1m to 2m unique addresses pinging DeFi: 143
Days from 2m to 3m unique addresses pinging DeFi: 79Dune query h/t @richardchen39 pic.twitter.com/8imKOZKQ3V
— Matt Casto (@mcasto_) July 12, 2021
The Bitcoin DeFi news comes after Dorsey said on Twitter earlier in July that Square will develop its native Bitcoin hardware wallet with aided safekeeping to make things simple for mainstream customers.
