Bitcoin (BTC) Meets Decentralized Finance (DeFi) in FluidTokens' New Aquarium RWA Protocol

FluidTokens isn't usually the first place people look for DeFi innovation. But projects like FluidTokens are beginning to challenge

Cardano isn't usually the first place people look for DeFi innovation. But projects like FluidTokens are beginning to challenge that assumption, focusing on fundamentals like decentralization, fee stability, and long-term scalability.

This vision starts with Aquarium, FluidTokens' system for making Bitcoin usable in Cardano DeFi. It introduces Babel Fees, which allow users to cover transaction costs with any Cardano Native Token—including bridged Bitcoin—without needing ADA. Then there's Midgard, a lightweight roll-up designed to speed up transactions while still relying on Cardano's base-layer security.

In this Q&A, we speak with FluidTokens' CEO, Matteo Coppola, about what they're building behind the scenes—from a new lending protocol to a broader vision that touches Bitcoin, real-world assets, and more.

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BeInCrypto: Building on Cardano is often overlooked in the Ethereum-dominated narrative. What strategic advantages has Cardano offered FluidTokens, beyond the usual talking points around fees and uptime?

Matteo Coppola: Ethereum had the first-to-market advantage in the smart contract economy, and its Account Model was therefore used as the standard for many years. Cardano instead keeps the original Bitcoin architecture, expanding it to allow proper UTXO smart contracts.

Now that the general web3 community is facing the limitations of the Account Model, UTXO-based blockchains can show a better alternative, all properly connected by Cardano.

Cardano offers FluidTokens an always online realistic decentralized environment that can properly bridge assets among UTXO blockchains such as Bitcoin and any Layer 2 that anchors its security to a UTXO Layer 1.

Additionally, Cardano has one of the most vibrant communities, where its numbers are not made by bots and wash trading but by the authentic interest of real people.

FluidTokens has been a leading DeFi ecosystem on Cardano since 2022. It is currently the only ecosystem that has deployed real DeFi protocols on Bitcoin layer-1, so it’s a no-brainer to keep supporting and improving Cardano.

BeInCrypto: The Aquarium Babel fees model introduces a different way of thinking about user incentives. What led you to design it this way, and what kinds of user behavior are you hoping it encourages?

Matteo Coppola: Blockchain is a core part of any Web3 stack—but end users shouldn’t be burdened by the complexities of transaction building or on-chain settlement. The experience should be simple, secure, and smooth.

This is impossible if the user has to own and manage ADA, the native currency that Cardano accepts, to execute transactions. For example, how can an average person know where to buy ADA, how not to get scammed, how to do an annoying KYC on a centralized exchange, how much to buy, and how to send it to their non-custodial wallet? All of this must be avoided if ADA is not necessary in his daily operations.

Aquarium allows users to pay transaction fees with custom tokens, such as stablecoins, in a fully decentralized way. An open market provides ADA to sponsor transaction fees in exchange for a certain amount of another token, allowing supply and demand to be met and simplifying the user experience.

Aquarium will also enable Bitcoin users to execute DeFi operations on Cardano without the need to own any ADA, officially enabling Cardano as a DeFi layer for Bitcoin.

BeInCrypto: Midgard plays a role in FluidTokens' approach to scaling. How does it fit into your broader roadmap for expanding access to DeFi while staying aligned with decentralization?

Matteo Coppola: We are building Midgard in collaboration with Anastasia Labs to solve the Cardano fast-finality and low-fee issues that you inevitably meet when on any properly decentralized blockchain.

On Midgard, our DeFi products can become highly competitive with traditional ones, empowering real-time trading, video game economies, and daily retail payments.

Combined with Aquarium babel fees, the user experience starts to become pretty close to the old traditional system while keeping the most fundamental aspect—decentralization.

BeInCrypto: FluidTokens is rolling out a new lending protocol. Can you walk us through the core idea behind it and what specific problems you’re aiming to solve that other protocols haven't addressed yet?

Matteo Coppola: The new FluidTokens lending protocol has been designed in a highly modular way to accommodate an impressive number of different types of loans. The objective is to apply a different flavor of lending to ensure all user categories find what they are looking for on both the lending and the borrowing sides.

Lenders, whether private