Golden Finance News: Charles Hoskinson, the founder of Cardano, recently successfully launched the first Bitcoin DeFi protocol – Cardinal on the Cardano blockchain. This innovative move has opened up a brand-new path for Bitcoin holders to participate in decentralized financial activities within the Cardano ecosystem and marks a new stage in the development of cross-chain DeFi applications.
The Cardinal protocol, leveraging MuSig2 multi-signature technology, has achieved non-custodial cross-chain functionality. This technological breakthrough enables users to directly utilize Bitcoin UTXO (without spending transaction output) to participate in lending and staking operations on the Cardano chain. In the past, there were many limitations in the interaction between Bitcoin and other blockchains, especially in decentralized finance applications. Users often had to achieve cross-chain transfer and use of assets through complex and escrow risky methods. The emergence of the Cardinal protocol has greatly simplified this process. Users no longer need to entrust their Bitcoin assets to third-party institutions to flexibly carry out various DeFi activities within the Cardano ecosystem. This not only enhances the security of funds but also strengthens users’ control over their assets.
It is worth mentioning that the Cardinal protocol also shows good compatibility with Ordinals inscriptions, allowing them to be used as collateral in related financial operations. Ordinals inscriptions, as an innovative application in the Bitcoin ecosystem, have endowed Bitcoin with more diversified functions and values. Cardinal Protocol support for it further expands the application scenarios of Bitcoin in the DeFi field, enriches the types of collateral available to users, and provides users with a more flexible financial operation space.
From the perspective of technical architecture, the technical solution of the Cardinal protocol incorporates the BitVMX off-chain verification system. This system can effectively enhance the efficiency of transaction verification, while reducing the computational pressure and transaction costs on the chain. In the current era of increasingly frequent cross-chain interactions, an efficient verification system is crucial for ensuring the accuracy and timeliness of information exchange between different blockchains. In addition, the Cardinal protocol also has strong compatibility and supports interaction with mainstream public chains such as Ethereum and Solana. This means that the Cardano ecosystem can achieve broader interconnection and interoperability with other blockchain ecosystems. Users can freely allocate assets among multiple blockchains and participate in DeFi projects within different ecosystems, further promoting the circulation and application of crypto assets on a global scale and driving the integrated development of the entire crypto market.
Charles Hoskinson has been committed to promoting the innovative development and application expansion of the Cardano blockchain. The launch of the Cardinal protocol this time is an important milestone in the development history of the Cardano ecosystem. It not only brings a brand-new financial service experience to Cardano users, but also provides new ideas and directions for the expansion of Bitcoin’s application scenarios. With the gradual improvement and promotion of the Cardinal protocol, it is expected to attract more users and developers to enter the Cardano ecosystem, promote the birth and development of various innovative DeFi projects, and inject new vitality into the entire cryptocurrency industry. Subsequently, the market will closely monitor the performance of the Cardinal protocol in practical applications and its profound impact on Cardano and the Bitcoin ecosystem.
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