Key Notes
- Integration enables institutional custody of STX tokens and interaction with Bitcoin-based lending protocols like Zest and Granite.
- Stacks L2 produces blocks in 5 seconds versus Bitcoin’s 10 minutes, reducing slippage risks for DeFi transactions.
- Fireblocks clients gain access to Bitcoin-yielding vaults and BTC-native trading with trillions in potential transaction volume.
Fireblocks announced that it has integrated the Stacks network into its platform, bringing direct access to native Bitcoin DeFi applications and services built on the Stacks L2 Bitcoin platform.
The integration allows Fireblocks users to custody Stacks (STX) tokens, mint and bridge sBTC, and interact with Bitcoin-based lending and swapping protocols directly from the Fireblocks console.
According to a Feb. 4 press release, Fireblocks boasts more than 2,400 institutional clients. This represents a potentially massive influx of high-value investors and traders into the burgeoning Bitcoin DeFi marketplace. Through the integration, these clients will have access to the full suite of dApps and services available via Stacks, including Bitcoin-denominated rewards, Bitcoin-yielding vaults via Hermetica, BTC-backed loans via Zest and Granite, and BTC-native trading and liquidity via Bitflow.
Bridging Institutional-grade Custody and Bitcoin DeFi
This partnership might be viewed as a significant milestone for the Bitcoin Layer 2 (L2) ecosystem. While Bitcoin serves as the flagship blockchain and cryptocurrency (BTC), its adoption by institutional investors and traders focused on DeFi has been what some might deem as long in the making.
Despite the overwhelming popularity of the Bitcoin network, Ethereum is, by most definitions, the most popular blockchain for DeFi. This makes Bitcoin a massive untapped market for DeFi activity as it currently has a market cap of over $1.45 trillion, despite experiencing a months-long low as of Feb. 4.
The vast majority of Bitcoin sits idle in cold storage as a gold-like asset. Part of the reason for this is because it’s generally difficult to code for the Bitcoin network. It uses a non-Turing complete coding language called Script that, essentially, doesn’t allow some of the quality of life features that other blockchains, such as Ethereum, do.
Bitcoin is also relatively slow for the purposes of DeFi transactions. It takes approximately 10 minutes for the network to produce each Bitcoin block. As DeFi transactions typically occur in milliseconds, the longer it takes for a blockchain to record a batch of transactions, the greater the chances for “slippage” in prices to occur.
Stacks is a Layer-2 network built on top of the Bitcoin blockchain. It’s able to produce blocks in around 5 seconds, which makes it much easier to minimize slippage and, based on the amount of DeFi activity built on the network, it remains popular with coders.
Through the integration, Fireblocks users representing trillions in potential transaction volume now have access to Stacks. These institutions can now earn yield on their BTC holdings through lending and staking without selling the underlying asset.
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Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Tristan is a technology journalist and editorial leader with 8 years of experience covering science, deep tech, finance, politics, and business. Before joining Coinspeaker, he wrote for Cointelegraph and TNW.
Tristan Greene on X
Source: https://www.coinspeaker.com/fireblocks-stacks-bitcoin-defi-integration/
