In light of the recent fragility in the decentralized finance (DeFi) industry, Bitcoin (BTC) maximist and MicroStrategy CEO Michael Saylor thinks that bitcoin and lightning networks could come to the rescue of the DeFi market.
With two major protocols, Terra and Celsius, facing severe difficulties within a month of each other, the DeFi industry is having a difficult time. And in a recent tweet, Sailor suggested that Bitcoin and Lightning could help stabilize the industry.
According to Sayler, Bitcoin provides a “solid moral, financial and technical foundation for DeFi”. He further added that Lightning protocol and BTC tokens will be used to create the next generation of DeFi.
The strong moral, financial and technical foundation for DeFi is #Bitcoin. The next generation of DeFi will be created using the protocol # Electricity⚡️ and #BTC tokens. Https://t.co/5LlNlXkLMt
Michael Saylor June 14, 2022
Sailor was responding to the Bloomberg story on Tuesday (6/14), which highlighted several major concerns in the DeFi sector. Mahin Gupta, founder of Digital Asset Custody Platform Limal, told Bloomberg:
“Everything that happens with Celsius will have serious consequences for the industry. He is an insignificant player and his apparent crash will have ripple effects. “
Celsius Networks suspended withdrawals and other transactions on its platform just a month after the spectacular collapse of Terra Blockchain, which attracted investors with an annual return of around 20%. Terra’s fall was triggered when his stablecoin lost 1-to-1 peg against the US dollar, and Celsius stopped withdrawing money, adding to the loss of cryptocurrency.
As a result, Lightning Networks, CEO of Microstrategy, was excited about Bitcoin’s Layer 2 scalability solution. Accordingly With Sailor, Bitcoin is the future of money and Lightning Protocol will help in the scalability of transactions. He added:
“If you are going to make high-speed payments and transactions, you need a base layer that is ethically sound, financially sound and technically sound. Bitcoin is just that. But then billions and billions of transactions will go to Tier 2 like Lightning.
To date, DeFi applications on the Bitcoin network have not reached the same level of popularity on other blockchains as Ethereum and Solana. However, some who have studied DeFi believe that it can be applied permanently to the Lightning network, Saying That “Stablecoins and fully secured loans against your BTC are appropriate”.
According to the Non-Fungible Token Project (NFT), manufacturers of small Will Lee, BTC and LN can power DeFi and NFTs. He told Cointelegraph that while many new protocols are still in the experimental phase, protocols such as BTC and LN already demonstrate their inherent strengths, adding:
“For anyone looking to get into cryptocurrency, stability is something they want to be sure of. When I realize that the established protocol is in danger, it gives me peace of mind, which also strengthens the overall cryptocurrency ecosystem. With the support of anyone other than BTC, your DeFi or NFT project is sure to have a lot of buyers. ”
According to Ignite’s Eliasgar Merchant, DeFi is “struggling” and everyone is doing everything possible to survive the crypto winter. He cited recent developments in Terra and Celsius as evidence that DeFi, the main purpose of Web3, was failing. According to Merchant, the two most important aspects of building a solid DeFi system are interoperability and scalability. He added that “once the foundation is established, we can focus more on specific protocols to meet our DeFi needs.”
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