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Cryptocurrency News Articles
Bitcoin Project BOB Maps Out How the Original Blockchain Could Take Over DeFi
Oct 24, 2024 at 10:01 pm
The goal is to create trust-minimized bridges between itself and other layer-1 blockchains, according to the abstract of a new "vision paper" shared with CoinDesk.
A new "vision paper" shared with CoinDesk outlines a design for a "hybrid layer-2" network that could help to position Bitcoin (CRYPTO: BTC) – the oldest and largest blockchain – as the new foundation for decentralized finance (DeFi).
While DeFi is typically more closely associated with newer blockchains like Ethereum (CRYPTO: ETH) and Solana (CRYPTO: SOL), BOB's perspective is that Bitcoin is the center of the crypto universe and may as well be used for DeFi.
"If Bitcoin breaks, then so does our industry as a whole, so we might as well use Bitcoin security for cross-chain DeFi," BOB co-founder Alexei Zamyatin told CoinDesk in a Telegram message.
Zamyatin was a co-author, alongside the closely-watched developer Robin Linus, of a research paper earlier this year that outlined crucial improvements to a proposed system for enabling more programmability on Bitcoin.
Crucially, BOB, which raised $10 million in seed funding in March, harnesses BitVM2, the open-source software that could enable the deployment of smart contracts on Bitcoin.
This technology compresses programs, which are then included and verified in BTC transactions to prevent nefarious use.
The proposed design of the hybrid network would use Bitcoin as an anchor chain, with Ethereum and other layer 1s verifying that BOB has finalized on Bitcoin before accepting withdrawals.
According to BOB, this is practical because of Bitcoin's inherent security and also its simplicity. In essence, it's far easier for other networks to verify Bitcoin than it is to develop a bridge that both Bitcoin and another layer 1 can verify.
Users would be able to deposit and withdraw BTC to and from BOB as long as there is at least one honest node to perform a dispute, the paper states.
This paradigm is then used to create a trust-minimized bridge to Ethereum, which is secured by Bitcoin.
BOB would perform the function of both bundling transactions carried out on other Ethereum and its layer 2s and also verifying their correctness on Bitcoin.
"This design can be extended to the majority of layer-one chains that have smart contacts," the paper adds.
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