Idle Bitcoin, Active Cardano: Pogun’s Plan to Turn BTC Into Productive On-Chain Capital

• Pogun, built by IOG’s Omer Husain, wants to build a credit and liquidity layer for Bitcoin on the Cardano network.
• Its main offering will be an oracle-free, non-margin credit market where collateral can only be at risk through default, not short-term volatility.

Despite Bitcoin being a $1.6 trillion asset, the majority of BTC sits idle in wallets, making it a purely speculative asset. While dozens of platforms have launched to offer BTC-linked DeFi products, none has grabbed a sizable market share. Pogun is launching to change this, tapping the Cardano network as the underlying blockchain layer.

Pogun is built by a team led by Omer Husain, who currently serves as the general manager for Bitcoin DeFi at the Input Output Group (IOG), the entity behind Cardano’s development. 

As Husain notes, every bridge in crypto is built to move Bitcoin to another chain, but few offer utility for this BTC. He believes that BTC “has a destination problem, not a bridge problem.”

Pogun is solving this problem through three different products that work under a single system. The first of these is a non-margin credit market, which Husain says is the first on any Layer 1 network. 

Unlike other on-chain products, Pogun’s offering is modeled on how real-life credit markets work. First, borrowers and lenders negotiate the parameters, which will be enforced by smart contracts. Most importantly, the borrower’s collateral is only at risk if there’s definite defaulting, unlike in similar platforms where short-term volatility can trigger liquidation and result in massive losses. 

Pogun also offers the first secondary debt market on Cardano, where active loan positions will be represented as native assets through transferable bond tokens. It expects to launch this fully on-chain, oracle-free lending market in Q2.

‘Cardano is Built for Bitcoin DeFi’

In the third quarter, Pogun intends to launch a yield dApp that will be deployed on top of the credit market. It says this dApp will open Cardano’s credit infrastructure to liquid capital. On the surface, users will earn returns without any manual negotiation, while in the background, Pogun will match their capital with the live loan book.

In Q4, the platform will launch a trust-minimized bridge, powered by industry leader BitVM. The bridge is designed such that it remains fully secure as long as there exists even one honest operator. 

On why the bridge will launch last, Husain explained:

Pogun believes that Cardano is the ideal network to build Bitcoin DeFi on. Cardano’s EUTXO model borrows heavily from Bitcoin’s UTxO model, sharing a direct architectural lineage. This enables deterministic financial logic, predictable fees and native security. 

Pogun builds on ongoing developments within Cardano targeting Bitcoin DeFi. As we reported last year, founder Charles Hoskinson launched Cardinal, a decentralized finance protocol for Bitcoin users.

Husain commented:

Pogun is seeking 12.3 million ADA from the Cardano treasury to build its platform, worth just over $3 million at current prices. It intends to pay back 20% of its income until the loan is fully repaid, and then 5% moving forward.

ADA trades at $0.2489, gaining slightly to maintain its market cap above $9 billion.

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